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.