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

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download