The state of Iowa has completed an audit of the City of Casey, after a probable arson destroyed many of the town's financial records in August last year, the night before state auditors were scheduled to visit. Auditor of State Mary Mosiman says nearly $300,000 was misspent in Casey from July 2008 to October 2014.
Using bank statements, invoices, receipts, and records from the city's accounting software vendor, the city recreated a partial financial record. Former City Clerk Dorothy Dillinger admitted to an investigator with the State Fire Marshal's Office that she issued unauthorized checks to herself and also used the city's credit cards for $54,520.33 in personal purchases, including from Amazon.com, Target, Wal-Mart, Petco, Avon, HyVee, Victoria's Secret, and OurTime.com, a dating website.
Additionally Dillinger and public works director John Stolk were not paying utilities at their personal residences. In November 1993, the Casey City Council voted the city employees are not required to pay water and sewer bills, which is illegal in Iowa.
Casey's population is 426, well under the 2,000 required for a yearly audit by state law. The auditor of state became involved after a petition called for a review of the city's financial records.
The audit makes several recommendations, including backing up electronic records at an offsite location and creating a segregation of duties when it comes to payroll, receiving of monthly bank statements, utility reconciliations, and the collection and posting of receipts.
"This [fraud] could happen in a lot of places," says Auditor of State Mosiman. "Have the bank statement sent to a council member or the mayor, making sure a separate pair of eyes is looking at the bank statement...That's one of the easiest ways for oversight to take place, especially in our smallest of government entities."
A 2013 law took effect last year requiring examinations at least once every eight years for all Iowa municipalities, regardless of population. A city examination is smaller in scope than an audit, but still reviews financial transactions, handling of deposits and the taking of minutes at city council meeting.
In a press release the City of Casey says it is, "shocked and saddened by the findings. The audit contains several recommendations for new procedures, several of which have already been implemented. The city intends to put additional procedures in place going forward to avoid a similar situation in the future."