OFFICE OF AUDITOR OF STATE - Iowa
OFFICE OF AUDITOR OF STATE
STATE OF IOWA
David A. Vaudt, CPA
Auditor of State
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834
Facsimile (515) 242-6134
NEWS RELEASE
FOR RELEASE
Contact: David Vaudt
515/281-5835
or Tami Kusian
515/281-5834
March 19, 2010
Auditor of State David Vaudt today released a report on a special investigation of the City of
New Albin for the period January 1, 2006 through July 31, 2009. The special investigation was
requested by City officials after the former City Clerk, Stephanie Ahles, submitted a resignation
letter which stated, in part, ¡°over the past year and a half, I have been embezzling funds from the
City.¡± The letter also stated she had ordered personal items from certain vendors.
Vaudt reported the special investigation identified $32,735.08 of improper and unsupported
disbursements. Vaudt also reported it was not possible to determine if there were undeposited
collections because of the nature of the records available at the City.
The $29,811.64 of improper disbursements consisted of $27,250.48 of personal items
purchased from vendors such as Dell, Sears, Home Depot, LTD Commodities and several office
supply companies. The personal items purchased include household items, home improvement
items, lawn ornaments and electronics.
Specifically, 9 digital cameras, 4 camcorders, 2
computers, a high definition television, a digital voice recorder, a pearl and white sapphire pendant
and tools were identified. With the exception of $1,092.10, all improper purchases were paid for
with City funds. The remaining improper disbursements include $1,908.57 of reimbursements to
Ms. Ahles, $236.08 of payroll and reimbursements to Christopher Ahles, the husband of the
former Clerk, and $300.00 of checks issued to cash.
The
unsupported
disbursements
of
$2,923.44
include
$1,226.22
in
payroll
and
reimbursements to Mr. Ahles and $1,527.00 in payments to Ms. Ahles and her sister for cleaning
at the Senior Apartments.
Vaudt also reported the procedures identified approximately $139,600.00 of property taxes
not levied because the City Clerk¡¯s duties were not properly performed by Ms. Ahles.
Because
property taxes were not levied, City officials sent pledge cards to residents and asked for donations
in lieu of their property taxes.
By mid-December, the City had collected approximately
$140,000.00 of donations.
The report also includes recommendations to strengthen the City of New Albin¡¯s internal
controls and overall operations, such as improvements to segregation of duties, maintaining proper
supporting documentation for disbursements and ensuring utility billings, collections and
delinquencies are reconciled each month.
In addition, Vaudt recommended disbursements be
approved by the Council, minutes be properly signed in accordance with the Code of Iowa and the
Council review charge accounts.
Copies of the report have been filed with the Allamakee County Attorney¡¯s Office, the
Attorney General¡¯s Office and the Division of Criminal Investigation.
A copy of the report is available for review in the Office of Auditor of State and on Auditor of
State¡¯s web sit at .
###
REPORT ON SPECIAL INVESTIGATION
OF THE
CITY OF NEW ALBIN
FOR THE PERIOD
JANUARY 1, 2006 THROUGH JULY 31, 2009
0922-0012-BE00
Table of Contents
Page
Auditor of State¡¯s Report
3-4
Investigative Summary:
Background Information
Detailed Findings
Recommended Control Procedures
5-6
6-22
23-24
Exhibits:
Summary of Findings
Dell Account Activity
Home Depot Account Activity
Lowe¡¯s Account Activity
Purchases from LTD Commodities
Purchases from Office Depot
Purchases from Quill
Purchases from Reliable Office Supplies
Purchases from Sears
Purchases from Sam¡¯s Club
Reimbursements to Stephanie Ahles
Payments to Christopher Ahles
Payments for Cleaning
Petty Cash Reimbursements
Exhibit
A
B
C
D
E
F
G
H
I
J
K
L
M
N
Staff
27
28-35
36-41
42-47
48-53
54-69
70-89
90-103
104-109
111
112-115
116-119
121
122-129
130
Appendices:
Copy of Stephanie Ahles¡¯ Resignation Letter
Copy of Example Check Stub and Supporting Documentation
Copy of Personal Check from Stephanie Ahles for Computer
Copy of Testimonial by Stephanie Ahles on Home Depot Website
Copy of Invoice with Notation of Reimbursement by Stephanie Ahles
Copy of Invoice for Cleaning Senior Apartments
2
Appendix
1
132
2
133-137
3
138
4
139
5
140
6
141
OFFICE OF AUDITOR OF STATE
STATE OF IOWA
State Capitol Building
Des Moines, Iowa 50319-0004
Telephone (515) 281-5834
David A. Vaudt, CPA
Auditor of State
Facsimile (515) 242-6134
Auditor of State¡¯s Report
To the Honorable Mayor and
Members of the City Council:
As a result of the alleged improprieties regarding certain disbursements and at your
request, we conducted a special investigation of the City of New Albin. We have applied
certain tests and procedures to selected financial transactions of the City for the period
January 1, 2006 through July 31, 2009. Based on a review of relevant information and
discussions with City officials, Council members and staff, we performed the following
procedures:
(1)
Evaluated internal controls to determine whether adequate policies and
procedures were in place and operating effectively.
(2)
Reviewed the activity in the bank accounts held by the City to identify any
unusual activity. We also examined redeemed checks, images of checks, deposit
slips and related documents for propriety.
(3)
Scanned all disbursements from the City¡¯s accounts for reasonableness. We
also examined documentation for certain disbursements to determine if they
were appropriate, properly approved and supported by adequate documentation.
(4) Obtained and reviewed statements and invoices for activity related to credit card
or other charge accounts established in the City¡¯s name to determine the
propriety of activity.
(5) Reviewed payroll disbursements to determine if:
? all disbursements were authorized and supported by timesheets,
? transactions recorded in the payroll journal agreed with actual payroll
checks distributed,
? the net pay and withholdings were properly calculated and
? withholdings for taxes and retirement contributions were properly
remitted.
(6)
Examined all reimbursements made to the former City Clerk and her husband
to determine if payments were properly approved and supported.
(7)
Examined deposits to the City¡¯s bank accounts to determine the source, purpose
and propriety of each deposit and to determine deposits were made intact.
(8)
Confirmed payments to the City by the State of Iowa and Allamakee County to
determine whether they were properly deposited to the City¡¯s accounts.
(9)
Reviewed the utility system billing and collection records to determine
collections were properly accounted for and deposited.
3
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