From City Council

An Update to Our Residents From City Council

City Council is committed to representing and protecting the interests of Hilliard residents. We believe residents must be able to trust their elected officials and local government. Transparency is an important part of ensuring that trust.

When City Council learned in November 2017 of the theft of significant City funds by a long-term employee, we promised our community we would do three things:

  • determine what happened
  • hold those responsible for the theft accountable
  • take all necessary steps to safeguard against such theft of public funds happening in the future

We have made significant progress toward achieving these goals while being as responsible as possible to our taxpayers.

This web page is an update to our community on the steps we have taken to meet these promises and what is expected as we move forward.

Our Promises to the Community

In November 2017, City Council was notified that a theft of funds by long-time City employee Heather Ernst had been discovered as a result of an investigation by Hilliard Division of Police and the State Auditor’s Office.

Accusations about the theft by a previously trusted and valued employee was a tremendous shock to City Council and the Administration.

We promised our community we would ensure all possible actions were taken to determine what happened. We believe that promise has been kept and that a clear picture of what happened has been presented.

While HPD and the Auditor of State began working with the Franklin County Prosecuting Attorney’s Office to determine all facts for the criminal case, the City hired special legal counsel and an independent auditing firm (Schneider Downs) to perform a comprehensive forensic audit on City finances, policies and practices.

Thanks to these firms, we determined how Ms. Ernst was able to steal from Hilliard for many years and how much was taken. Weaknesses in existing City policies and practices were identified and corrective actions initiated.

The City also performed its own review of cash-handling processes and researched best practices used elsewhere. The State Auditor’s Office conducted a comprehensive review of all internal financial controls and procedures to ensure full accountability of all public dollars in every City department.

City Council also hired outside legal counsel, Scott Scriven LLP, to perform an independent investigation of how the City handled the Ernst investigation. As a result of that work, Council was satisfied that HPD’s investigation had been performed in a thorough and appropriate manner.

We have held those responsible for wrongful conduct accountable and will continue to do so.

Heather Ernst

Council and the City cooperated fully with the investigation and prosecution of Ms. Ernst. We asked the judge to send her to prison and to require restitution for her crime, which she admitted with a guilty plea.

To date, we have received approximately $200,000 in restitution.

On Jan. 27, 2020, City Council approved Resolution 20-R-12, a settlement agreement with Ms. Ernst to close the civil case in consideration of Ms. Ernst agreeing to pay $350,000 to the City.  She was credited approximately $162,000 from her Ohio Public Employees Retirement System pension that already has been recovered and approximately $40,000 in personal assets belonging to Ms. Ernst and her husband, Moses Ernst. Those assets will be turned over to Hilliard soon.

Ernst will be required to pay the remaining balance – approximately $148,000 – from any future earnings and assets. As part of the agreement, Ernst will be required to continually disclose any future earnings and assets to the City of Hilliard and to provide the City access to her personal financial records until the remaining money is repaid.

Moses Ernst is also a party to the settlement, but neither this settlement nor the original criminal findings against Ms. Ernst place culpability for the thefts on him.

Clark, Schaefer & Hackett Co. (Civil Suit)

We also believe partial blame for the theft lies with the City’s former auditing firm (Clark, Schaefer & Hackett Co.), which we believe did not adequately identify material weaknesses in the City’s cash-handling policies that could have prevented the theft of significant funds by Ms. Ernst. For that reason, Council filed a civil suit against Clark, Schaefer & Hackett Co. on Oct. 2, 2019, for breach of contract and negligence.

During the 10-year period that Clark, Schaefer & Hackett Co. served as the City’s auditing firm, the City paid $343,500 for its services. We are seeking in excess of $1 million in damages.

The civil lawsuit currently has an initial court date in October 2020.

As mentioned earlier, numerous changes in policies and procedures have been implemented to ensure greater controls are in place that will prevent future theft by City employees.

Implementation of improvements is ongoing. These recommendations were included in audit reports from the forensic auditing firm Schneider Downs. We are convinced that the City is in a much better position to prevent such illegal activities moving forward.

We have changed the way Hilliard does business, have tightened our financial controls, and have implemented new policies to safeguard against such a theft from occurring again.

The City will continue working to identify and implement additional changes to ensure we are keeping this promise to the community.

City Council recognizes that the theft of funds by Ms. Ernst and the subsequent (and ongoing) legal matters have not been the City of Hilliard’s most shining moment.

We remain committed to earning back our community’s trust. To that end, we have taken tremendous strides toward fulfilling our promises to our community.

Through our own investigations, as well as work by the State Auditor and Franklin County Prosecutor, we believe we have largely determined what happened and how it happened.

We have worked through the court system to ensure that those who were responsible for these thefts have been held accountable, both criminally and in the civil cases. This work continues with the civil suit filed Oct. 2 against the City’s former auditing firm.

And we have taken necessary steps to safeguard against such theft of public funds in the future. Audits have identified areas for improvement that are being implemented through policy and practice. Council continues working with the Administration to ensure additional changes are put in place.

City Council will continue to keep the community updated on the status of our efforts, as well as the civil suit proceedings, as we work together with the City Administration to ensure taxpayer funds are secure in the future.

Additional Information

In order to determine what happened, hold those responsible for the theft accountable, and safeguard against such theft of public funds happening in the future, City Council felt it prudent and necessary to engage the services of independent outside legal and financial auditing counsel. We could not have kept our promise to our residents without that investment.


As of Oct. 1, 2019, the City of Hilliard has spent $248,324 on fees directly associated with the investigation and legal services related to the Ernst case. These funds break down as follows:

Agency: Taft, Stettinus

  • Expenses: $42,752
  • For: Legal services in a civil lawsuit
  • Time frame: 2018

Agency: Peterson Conners LLP

  • Expenses: $56,434
  • For: Legal services in the civil lawsuit
  • Time frame: 2018-19

Agency: Lane, Alton & Horst

  • Expenses:  $139,358
  • For: Legal services in the criminal and civil cases
  • Time frame: 2018-19

Agency: Scott Scriven LLP

  • Expenses:  $7,830
  • For: Legal services (review of the Hilliard Police Department’s initial investigation)
  • Time frame: 2019

Agency: Robert Gray Palmer

  • Expenses:  $1,950
  • For: Services related to civil lawsuit
  • Time frame: 2019

Auditing Fees

In addition to the fees listed above (and specifically tied to the investigation of and legal action against Ms. Ernst), the City incurred $216,102 in costs for forensic auditing services from the firm of Schneider Downs. This work was performed to identifies areas that needed to be corrected or improved in City policy and practices.

Agency: Schneider Downs

  • Expenses:  $216,102
  • For: Auditing services
  • Time frame: 2018-19

Restitution and Recovery

As of Jan. 27, 2020, the City of Hilliard has received approximately $200,000 from Ms. Ernst from her government pension and personal assets. She has committed to restitution of $350,000. To ensure this repayment, she has agreed to allow the City of Hilliard to monitor her finances to ensure future income of assets are turned over to the City, until that amount is repaid.

City Council also has filed a civil suit against former auditing firm Clark, Schaefer & Hackett Co. on Oct. 2, 2019, for breach of contract and negligence. That suit seeks $1 million from the firm. Future legal fees for this lawsuit have been capped at an additional $20,000.

City Council also has received an additional $199,000 from the City’s insurance provider for insurance that covers loss of funds tied to the theft.

City Council also has heard that interested residents would like a better understanding of what occurred and when during the Ernst investigation.

The City of Hilliard is a public agency. We strive to be as transparent as possible. Because the Ernst matter was still being investigated and the civil suit is still working its way through the courts, there was some information we were not able to provide to the community. But we want to give our community as much information as we can to ensure you are aware of what we have done and continue to do to ensure accountability.

The following timeline includes highlights of the Ernst matter and the steps the City took to determine what happened, hold those responsible for the theft accountable, and take all necessary steps to safeguard against such theft of public funds happening in the future.

Before 2017: Ms. Ernst is entrusted by former-City finance department director Michelle Underwood with collecting daily funds from the pool cash registers, reconciling those funds, and depositing them in a local bank. At a date that cannot be confirmed with 100% certainty, she began stealing cash funds by not depositing all cash received at the registers.

2012: Ms. Ernst is promoted to Deputy Director of Recreation and Parks, a position in which she oversaw operations of both City pools. She continues collecting and reconciling pool funds.

2012-2017: Between 2012 and 2017, Ms. Ernst steals at least $540,000 in cash assets from the City by not depositing all the cash received at the registers. She deposits some of these funds in her personal bank account and uses other funds to pay cash for various purchases and expenses.

2015-2016: Hilliard Police Department is informed of potential irregularities in Ms. Ernst’s personal bank deposits. In an initial investigation, no evidence is discovered to proceed with charges. A second investigation, started because of additional information provided to HPD in 2016, uncovers sufficient evidence that theft of funds occurred to bring charges against Ms. Ernst. HPD requests assistance in the investigation from the Ohio Bureau of Criminal Investigation, which declined due to the limited amount of available information at the time. HPD opts to continue the investigation.

2017: HPD contacts the Ohio Department of Taxation for assistance with the investigation. Taxation is able to collect taxes on some deposits Ms. Ernst made into her personal accounts but had not reported on her income taxes. HPD receives copies of Taxation’s investigation, which indicate Ms. Ernst had filed a false affidavit about the amount of funds deposited in her personal accounts. HPD determines it will continue its investigation.

The HPD investigation identifies a mismatch between the cash registers and deposits.

Nov. 1, 2017: Ms. Ernst resigns her position as City of Hilliard Deputy Director of Parks and Recreation. Council members are notified that an investigation of the theft was underway due to a potential loss of cash. Council members request a briefing from Chief of Police Robert Fisher and (now former) Law Director Tracy Bradford at the Nov. 20, 2017 Council meeting. A representative of Ohio Auditor of State Dave Yost’s office also briefed Council on that office’s parallel investigative work.

Nov. 21, 2017: The City of Hilliard publicly announces that HPD is working jointly with the State Auditor’s Office on an investigation. Council releases a separate news release on this date. The City asks that independent forensic accountants be employed to assist in the investigation. The City begins its own review of its own cash-handling processes and best practices used elsewhere. Members of City Council request that the State Auditor’s Office conduct a comprehensive review of all internal financial controls and procedures to ensure the full accountability of all public dollars in every City department.

December 2017: Law Director Bradford informs Council that it would be a conflict of interest for her to represent both Council and the City administration in this matter. Council begins reviewing options for representation.

Dec. 11, 2017: Council announces the hiring of its own special counsel.

Dec. 22, 2017: Chief Fisher notifies Council that Ms. Ernst has been charged with felony theft in office following the department’s thorough investigation and that the case would proceed to grand jury.

March 1, 2018: Ms. Ernst is indicted by Franklin County Grand Jury on eight felony counts (one count of theft, one count of theft in office, two counts of tampering with records and four counts of filing incomplete, false and fraudulent tax returns.) The investigation established that Ms. Ernst stole at least $540,000 from the City’s pools. The case is moved to Franklin County Court of Common Pleas.

March 16, 2018: Arraignment is held for Ms. Ernst. City Council announces that a civil suit has also been filed against Ms. Ernst, enabling the court to freeze her assets. Law Director Bradford announces that the firm of Taft, Stettinius and Hollister LLP has been hired as special counsel to represent the City in the civil lawsuit.

August 2018: City Council ends its agreement for services with Taft, Stettinius and Hollister LLP.

Sept. 18, 2018: Hilliard City Council hires Peterson Connors LLP to serve as the City’s representative in its civil lawsuit, as well as Lane Alton law firm to perform work tied to the recovery of the missing funds.

Oct. 3, 2018: Ms. Ernst pleads guilty to felony charges of theft in office, a felony of the third degree, and attempted tampering with records, a felony of the fourth degree.

Nov. 2, 2018: Hilliard recovers $100,000 in insurance proceeds related to Ms. Ernst’s theft.

Nov. 16, 2018: Ms. Ernst is sentenced to one year in prison followed by three years of community control. She is ordered to pay restitution of $271,898.

Dec. 6, 2018: Hilliard recovers $162,081.59 as partial restitution from Ms. Ernst.

January-March 2019: Investigation of possible involvement of the thefts by Ms. Ernst’s husband; Ms. Ernst’s assets, accounts, and ability to pay restitution are performed 

January 2019: Investigation of asset transfers by Ms. Ernst is performed

Jan. 2, 2019: Ms. Ernst begins her one-year term of incarceration with the Ohio Department of Rehabilitation and Correction.

January – September 2019: Hilliard investigates several additional possible sources of recovery of additional funds. The City also implements changes to its practices and policies.

March 8, 2019: Depositions taken of former City employees Alex Drake and Steve Mazer by attorneys with Lane Alton

March 18, 2019: City’s opposition made by attorneys with Lane Alton to judge’s consideration of Ms. Ernst’s desire for transitional control (i.e., “early release.”)

March 29, 2019: Examination of Ms. Ernst under oath by attorneys with Lane Alton

March – May 2019: Examination of collateral source recovery from Clark Schaeffer (engagement of Clarus Partners)

April 26, 2019: Examination of Ms. Ernst’s husband under oath by attorneys with Lane Alton

June – October 2019: Investigation by attorneys with Lane Alton of collateral recovery sources, including scope of public bond applications and examination of insurance loss coverages

September 13, 2019: Confidential mediation held with Clark Schaeffer

Oct. 2, 2019: Attorneys representing Hilliard City Council file a civil suit in Franklin County Common Pleas Court against the City’s former auditing firm, alleging breach of contract and negligence that led to theft by Ms. Ernst. The suit alleges that during 10 years of audits of City finances and practices, the firm of Clark, Schaefer & Hackett Co. failed to identify material weaknesses in the City’s cash-handling policies that could have prevented the theft of significant funds by Ms. Ernst over a period of several years. City Council caps the amount of additional legal fees it will pay for this suit at $20,000.

Jan. 27, 2020: City Council approves Resolution 20-R-12, settling the Ernst civil suit with the agreement that Ms. Ernst will pay the City $350,000 (including funds already received from her pension and personal assets.) As part of the agreement, the City may review Ms. Ernst’s personal financial information until such time as the $350,000 has been paid in full. The City also announced it had received $199,000 from its insurance company for coverage for theft of funds.

As part of the City’s commitment to safeguarding against future incidents, it contracted with auditing firm Schneider Downs. The reports of these audits can be found at the following links:

Initial report (Sept. 8, 2018)

Final report, including responses by the City Administration

Final forensic audit (10-28-2019): Cover LetterExhibit A | Exhibit B | Exhibit C | Exhibit D | Exhibit E | Exhibit F | Exhibit G | Exhibit H | Exhibit I | Exhibit J | Exhibit K | Exhibit L | Exhibit M | Exhibit N | Exhibit O | Exhibit P | Exhibit Q | Exhibit R |