Auditor Galloway discovers money is missing, city funds were misused in Glasgow

Whistleblower tip led to request to audit by city; thousands went missing or were misused under watch of former city administrator
September 27, 2018

JEFFERSON CITY, Mo (Sept. 27, 2018) Thousands of dollars are missing, city funds were used to pay a personal credit card and firearms are unaccounted for according to an audit of Glasgow released by State Auditor Nicole Galloway. The suspicious activity took place under the supervision of a former city administrator, Kevin Atwood, who was responsible for many of the city's accounting functions. Glasgow is a city located in Chariton and Howard counties.

"There should be no tolerance for public officials who abuse their position for their personal gain," Auditor Galloway said. "In this case, these issues came to light because a whistleblower came forward to report wrongdoing. The tip resulted in the discovery of missing funds and improper use of city resources."

Atwood became the city's police chief in 2004, a position he continued to hold after being appointed as city administrator in 2013. In the fall of 2017, the State Auditor's Whistleblower Hotline received a tip related to credit card purchases and firearm inventory concerns. Information was referred to the Department of Public Safety and the Howard County Prosecuting Attorney. Based on that information, the prosecuting attorney requested an investigation by the Highway Patrol. In October, the Board of Aldermen suspended the city administrator, who then submitted his resignation. The city formally requested an audit in December 2017.

The audit found missing cash totaling more than $4,000. Approximately $3,200 went missing from bulk water sales. According to records, over nearly four years, an estimated 608,000 gallons were distributed by an automatic distribution system. While this should have resulted in $3,800 in funds, records indicate only $552 was received by the city. The former city administrator was the only employee with access to the funds at this time. Additionally, a check was written to the former city administrator for $1,050 for a "drug buy," but there is no evidence that such a buy took place.

The audit also found the former city administrator directed city staff to pay his personal credit card bills. Of the $5,500 paid by the city, nearly $4,000 of the charges were improper or personal in nature. This included online purchases from Amazon and video game subscriptions. The city recouped some of the funds, but $2,700 has yet to be repaid.

The audit also questioned the cost effectiveness of phone lines, smart phones and a tablet computer purchased by the former city administrator and brought forward concerns that the former city administrator may have used city fuel for his personal vehicle.

Additional concerns were identified within the city's clothing allowance program. Under the program, the city would purchase both work-related and personal items for employees, and allow the employees to reimburse the city through their clothing allowance and payroll deductions. This included allowing employees working for the police department to purchase firearms. Poor record keeping made it difficult to determine what was actually purchased and whether the item was purchased for personal or official use. The former city administrator purchased eight firearms over a four year period through this program and several other officers of the city used the program to purchase firearms. At least three firearms purchased by the city are not in inventory, were not reimbursed by an officer through the program and are considered missing.

The audit recommended better oversight of city funds, improved record keeping and fuel usage processes and checks and balances in financial practices. The city indicated officials are working to implement the recommendations.

Auditor Galloway said the report has been provided to local, state and federal law enforcement and that her office stands ready to assist in any investigation. The full report, which received an overall rating of poor, is available here.

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