05/04/2021
A
report from State Auditor Nicole Galloway says progress is being made in the
city of Parma after an audit last
year discovered more than $115,000 was misappropriated through payroll
overpayments and improper payments and purchases. The audit, which also found
that meeting minutes and financial reports were falsified to conceal the
misappropriations, led to criminal
charges against the former mayor, former city clerk
and former water supervisor of the small southeast Missouri town.
Because
the audit gave a rating of "poor" — the lowest possible — the
Auditor's Office conducted a follow-up review to measure the progress the city
has made.
"There
was a serious betrayal of public trust in Parma, and it will take time and a
great deal of effort to undo that," Auditor Galloway said. "This
follow-up report shows city officials are moving in the right direction to
restore the trust of citizens in local government. I encourage them to continue
their work, and my office's Public Corruption and Fraud Division also will
continue working with law enforcement officials as they pursue the criminal
charges."
The
2020 audit found that from April 14, 2015, through April 16, 2019, at least
$115,582 was misappropriated from the city. The misappropriations included
payroll overpayments and/or improper payments to the mayor, the city clerk, and
to city officials and others who were related to the mayor or the city clerk.
The mayor and city clerk made improper purchases using prepaid debit cards and
the city's Walmart credit card, including gift cards, appliances, furniture and
electronic equipment.
The
mayor and city clerk also falsified Board of Aldermen meeting minutes and
financial reports. The city clerk falsified cash balances of some bank accounts
on financial reports; most of the inaccurate financial reports prepared for the
board were reviewed and signed by the mayor. The city clerk also did not timely
file and remit various payroll taxes. As a result, the city was assessed over
$114,000 in past due taxes, interest and penalties.
The
follow-up report found that the Parma Board of Aldermen had implemented 12 of
the audit's 26 recommendations. Those included ensuring that account balances
are properly funded and maintained, monitoring and reducing transfers between
bank accounts, and ensuring the transfers are legal. The city is also
refraining from entering into business transactions with relatives unless the
transactions are properly bid.
Another
12 of the recommendations are in progress, including working with law
enforcement officials on the criminal prosecution. The city is also working to
ensure better oversight of city spending and accounting duties. The Board of
Aldermen has partially implemented the other two recommendations.
A
copy of the complete follow-up report can be found here.