Auditor of State Rob Sand today (Tuesday) released a report on a special investigation of the City of Silver City for the period May 1, 2017 through April 30, 2021. A copy of the full, 150 page report is available at https://www.auditor.iowa.gov/reports/file/69320/embed. The special investigation was requested by City officials as a result of concerns regarding certain financial transactions processed by the former City Clerk, Artema Gray, and covered the period May 1, 2017, through April 30, 2021.

Sand reported the special investigation identified $61,730.26 of improper disbursements, $3,499.51 of unsupported disbursements, and $1,555.00 of undeposited fundraising collections.
The improper disbursements identified includes $42,210.26 of personal purchases made with the City’s credit card. The improper disbursements identified also include $10,880.22 of unauthorized payroll issued to Ms. Gray and related payroll costs, $2,006.49 of unauthorized reimbursements issued to Ms. Gray, and $545.00 of payments for Ms. Gray’s personal CenturyLink bills. Sand also reported the improper disbursements identified includes interest late fees, and penalties to IPERS, the Department of Revenue, the Internal Revenue Service, and credit card payments.

The $3,499.51 of unsupported disbursements identified includes $2,672.64 of purchases made with the City’s credit cards and $261.95 of reimbursements issued to Ms. Gray. Sand reported it was not possible to determine the propriety of these credit card charges and disbursements because they were not supported by documentation sufficient to determine if they were for City operations or personal in nature.

Sand also reported $1,555.00 of undeposited fundraising collections were identified by comparing the amount which should have been collected to amount deposited in the City’s bank account. It was not possible to determine if additional funds were improperly disbursed or if any additional collections were not properly deposited during the period reviewed because adequate records were not available.

In addition, Sand reported City officials did not implement policies or procedures to address the recommendations included in a report released in May 2018 for the fiscal year ended June 30, 2017. The report included recommendations to segregate duties, perform bank reconciliations, ensure disbursements were properly supported by sufficient documentation, adhere to established credit card policies, and reconcile collections to deposits.

As was recommended in the earlier report, Sand again recommended City officials implement procedures to ensure the City’s internal controls are strengthened, including properly segregating duties, performing independent reviews of bank reconciliations, and ensuring all disbursements are properly supported, approved, and paid in a timely manner.