Auditor of State Mary Mosiman today (Thursday) released a report on a special investigation of the City of Kimballton for the period May 1st, 2014 through August 31st, 2017. The special investigation was requested by City officials as a result of concerns regarding certain financial transactions processed by the former City Clerk, Tammy Thompson. Mosiman reported the special investigation identified $89,939.12 of undeposited collections and improper and unsupported disbursements.

Mosiman also reported $37,137.63 of the undeposited utility collections was identified by comparing utility collections recorded in the City’s utility accounting system to amounts deposited to the City’s bank accounts between May 1, 2014 and August 31, 2017. The remaining undeposited utility collections identified are composed of $1,353.82 of improper adjustments recorded in the City’s utility accounting system. There were no explanations for the adjustments and they were not approved by the City Council.

The $42,431.08 of improper disbursements identified includes $24,375.15 of checks which were issued to or redeemed for cash, $12,223.80 of unauthorized payroll costs and reimbursement checks to Ms. Thompson, and $5,577.26 of improper purchases on the City’s credit card. The $8,936.59 of unsupported disbursements identified includes $3,333.55 of unsupported purchases on the City’s credit card at Walmart, Sam’s Club, and Amazon and $5,439.80 of checks issued from the City’s checking and Library accounts to individuals and vendors for which the City could not locate supporting documentation.

Mosiman also reported it was not possible to determine if additional amounts were improperly disbursed or if additional collections were not properly deposited because adequate documentation was not available. In addition, Mosiman reported City officials did not implement policies or procedures to address the recommendations included in the previously released “Agreed-upon Procedures Report” for the period July 1, 2013 through June 30, 2014 and the “Report on the Status of Findings and Recommendations” for the period December 1, 2015 through May 31, 2016. Both reports included recommendations to segregate duties, perform utility reconciliations, perform an independent review of bank statements, and ensure all disbursements are properly supported and approved.

Mosiman again recommended City officials implement procedures to ensure the City’s internal controls are strengthened, including segregation of duties, performing utility reconciliations, performing independent review of bank statements, and ensuring all disbursements are properly supported, approved, and paid in a timely manner. Copies of the report have been filed with the Audubon County Sheriff’s Office, the Iowa Division of Criminal Investigation, the Audubon County Attorney’s Office, and the Iowa Attorney General’s Office. A copy of the report is available for review in the Office of Auditor of State and on the Auditor of State’s web site at https://www.auditor.iowa.gov/reports/audit-reports/.