The reports in The Herald-Times of Bloomington and The Indianapolis Star come as Gov. Mitch Daniels continues pushing to eliminate townships as a layer of government.

IBJ reported in 2008 that former Center Township Trustee Carl Drummer’s office collected an average of $6.9 million in the previous seven years—mostly from taxes—to help needy residents, but only $2 million reached the penniless. At the same time, the office built up a surplus fund to a high of $10.4 million and accumulated a $10 million portfolio of mostly vacant properties.

According to The Herald-Times, 133 township trustees failed to comply with a new state law requiring them to file their annual reports electronically.

"The very idea that we think it's OK for a local elected official not to account for our hard-earned money? That's just not democratic," said Marilyn Schultz, a former Indiana state budget director and legislator.

Six-hundred-sixty-six out of the 875 trustees who did report say they used township funds to pay somebody with the same last name, a sign of possible nepotism, the Bloomington paper said. Daniels has described nepotism as a major problem in township government.

Trustees spent $24.2 million in administration to deliver $24.4 million in relief for the poor, or one dollar in administration for each dollar in services provided. Townships also continue accumulating money at a time of tight government budgets, the Star reported. It said townships reported $294 million on hand at the end of 2009, compared with $207 million two years earlier.

Cash balances on hand in 2009 were equal to 80 percent of what townships spent that year, up from 60 percent in 2007, the Indianapolis paper said.

Daniels said the investigation "furnishes new and powerful proof this is a real problem."

On Tuesday and for the fourth straight year, Daniels said in his State of the State address that Indiana should abolish township governments and transfer their duties such as providing poor relief and fire protection to county or city officials.

Daniels described townships as "antique" and "obsolete." The proposal grows out of a 2007 report from a commission created by Daniels and led by former Democratic Gov. Joe Kernan and Indiana Chief Justice Randall Shepard.