SBOA report alleges misconduct by Galloways

Cheryl and Wayne Galloway

CLOVERDALE — A report by the Indiana State Board of Accounts (SBOA) has alleged overcompensation and mismanagement by former Cloverdale Clerk-Treasurer Cheryl Galloway and her husband Wayne, Cloverdale’s former town manager and building inspector.

Stating that it covers activity in the period between January 2019 and March 2020, the report outlines its allegations in terms of misconduct with management of payrolls and salary expectations.

The report first notes in its background that Mr. Galloway was hired as the Cloverdale town manager in May 2015. He was later named the town’s interim building inspector in August 2017.

The report also states that the Cloverdale Town Council met in executive session on March 17, 2020 to discuss alleged misconduct of Mr. Galloway. It says that then-Town Attorney Daniel Hofmann issued a letter to Galloway to, “memorialize the Town Council’s decision terminating your employment.” The letter directed Galloway to vacate his office on March 27, 2020.

This has been contested by the Galloways, who have put forward that Wayne’s termination was illegally decided on in a closed session. The council publicly announced his termination during a public meeting held on April 14, 2020.

The report provides that Mr. Galloway’s approved salary as the building inspector was $13,256 in 2017, $20,000 in 2018 and then $20,000 in 2019. The council then approved the rate at $40,000 for 2020. It was stated then that this was meant to help attract a committed employee.

The report argues, however, that Mr. Galloway was never named the building inspector or approved to receive the $40,000. It states that Clerk-Treasurer Galloway reported to the council in March 2020 that her husband was receiving $20,000. While this was confirmed, Mr. Galloway’s payroll indicated the $40,000 instead.

The report notes that in 2020, Mr. Galloway’s salary as the town manager was $1,856 per pay and $769.23 per pay as the building inspector. This totaled to $2,625.23. However, his building inspector pay was allegedly changed to $1,538 per pay, totaling $3,364 per pay for the first seven pay periods in 2020.

For a payroll ending on April 5, 2020 and paid out on April 10, 2020, Mr. Galloway was paid for a partial pay period and compensated for unused vacation and sick hours. The report provides that only unused vacation hours can be paid when an employee quits.

The SBOA requested that the couple reimburse the town $9,119.27 for the alleged overcompensation. The agency also requested that they reimburse the state $5,600.25 for special investigation costs, including an initial investigation by the Indiana State Police. Additionally, it provides that the final paycheck issued to Mr. Galloway for $3,424 was returned to the town and voided.

The report puts forward that the town council, “did not always review the detail of the payroll claims before approving them.” Additionally, it has been charged that Mr. Galloway did not duly segregate his duties as the town manager, the building inspector and doing payroll.

The report also provides that Mr. Galloway’s time cards were not approved during the period in question, or that there were not proper internal controls in place to keep town records and property secure.

The report notes that its contents were discussed in February 2021 with Clerk-Treasurer Kelly Maners, council members Rick Dearwester and Gary Bennington and Town Attorney Richard Shagley. Likewise, the Galloways and attorney Mark Waterfill were shown the report early in March.