06/09/2022 - Jefferson City, Mo.
An audit of the City of Purcell released today by State Auditor Nicole Galloway has identified significant weaknesses that led to the misappropriation of thousands of dollars in taxpayer funds by the former Mayor Pro Tem. The audit, which gave a rating of "poor", was initiated by a petition from residents of the Jasper County city (pop. 318).
"Our audit found a lack of oversight and segregation of duties by the former Board of Aldermen in Purcell that directly contributed to public funds being misappropriated," Auditor Galloway said. "The current Board has their work cut out for them to restore the trust of the residents there, but the audit gives recommendations on each finding for the Board to implement. I urge Board members to quickly move forward with those recommendations."
From Feb. 1, 2021 to April 12, 2021, at least $3,233 was misappropriated or missing from the city, the audit found. During this time, the former Mayor Pro Tem, Nancy Wilson, improperly issued herself four checks totaling $1,988, withdrew $400 in cash from the city bank account, issued a $200 check to a city vendor that she endorsed and deposited into her personal bank account, and issued a $500 check to an individual that was cashed and the proceeds then divided evenly between the individual and Wilson. She also recorded improper adjustments to her utility account and did not bill herself for utility and trash services. Wilson also did not deposit at least $165 in city cash receipts collected during this time.
In May 2021, Wilson was charged with stealing in Jasper County. She entered a guilty plea in January 2022 and was ordered to repay the city $2,588. The State Auditor's Office worked with the Jasper County Sheriff on the matter.
The audit found the former Board of Aldermen did not provide adequate oversight or segregation of duties over financial accounting functions, such as monitoring the city's financial activity, reviewing or comparing checks written to invoices or bank statements, or requiring dual signatures on checks. In addition, the city did not obtain an annual audit of the combined waterworks and sewerage system, as required by state law; and the Mayor and Board members who sign checks and have access to bank accounts were not covered by a bond.
The city is in poor financial condition, with the reconciled bank balance on Dec. 31, 2020 only slightly greater than the city's average monthly expenditures. The Board does not adequately monitor city finances and is not in a position to make financial decisions that could strengthen fund balances. In addition, the city did not prepare complete annual budgets or monitor budgets, file annual financial reports timely, publish semiannual financial statements in compliance with state law, or maintain a street maintenance plan.
The audit recommended that the Board ensure it receives detailed financial data monthly, perform immediate and long-term planning, and closely monitor and take necessary steps to improve the city's financial condition. The report also recommended the preparation of all budgets, reports and financial statements, as required.
Accounting controls and procedures also need improvement, as do utility system controls and procedures. Because the city's procedures for receipting, recording and depositing money are poor, there is no assurance all money collected is properly receipted, recorded and deposited. The city has not established adequate procedures to allocate salaries and wages to various city funds and ensure restricted money in those funds is only used for the intended purposes.
In addition, the city does not always solicit bids or obtain written contracts, city officials could not provide supporting documentation for some disbursements or approval of those disbursements, credit card receipt slips for some purchases were not retained, and city officials did not maintain documentation to support all payroll transactions. The audit also noted concerns with Sunshine Law compliance, Board qualifications and ordinance codification, as well as the city's records management and retention policy, and its lack of maintaining records of capital assets.
A copy of the complete audit can be found here. A follow-up review is planned to evaluate the city's implementation of the audit recommendations.