JEFFERSON CITY, MO – An audit of the city of Coffey released today by State Auditor Nicole Galloway shows more than $60,000 missing from the small northwest Missouri town. According to the audit, over a period of almost two years the former city clerk failed to make deposits, received improper payroll payments, and falsified board minutes and various financial reports. Coffey, located in Daviess County, has a population of 166 (2010 census).
“My audit found a pattern of missing deposits, suspicious checks, and falsified minutes and financial reports, along with what can only be described as a shell game of moving money between various city accounts in order to avoid detection,” Auditor Galloway said. “All of this was compounded by minimal, and often non-existent, oversight by city officials.”
As Coffey city clerk from September 2015 to August 2017, Mary L. Browning was solely responsible for the financial accounting functions and records of the city. She was terminated on August 2 of last year. The audit found that during her employment, Browning did not deposit almost $34,000 in utility payments, including $2,645 she credited to her own utility account.
In addition to the missing deposits, improper payroll checks totaling $24,634 were written to Browning from the city’s water and sewer bank accounts; payroll records also indicate she was overpaid an additional $1,556 because she entered in a different number of hours on the payroll report than what was recorded on her timesheets. Although city payroll checks require the signatures of both the mayor and the city clerk, members of the city’s Board of Aldermen indicated to the Auditor’s Office that the former mayor often signed blank checks in advance.
As part of the scheme, Browning created false meeting minutes to make it appear the Board of Aldermen authorized her making a withdrawal and deposit between accounts. Over the course of her employment, Browning made numerous transactions between the city’s nine checking accounts and a savings account. She also prepared false financial statements for the city that significantly over-stated the balances in the city’s accounts.
The audit cites lax oversight by both the Mayor and the Board of Aldermen, which at the time included Browning’s husband. Alderman Browning voted to approve a pay raise to his wife, a violation of Missouri law, and also approved paying bills at many meetings that included improper payroll checks and regular payroll checks to his wife. In addition, there was a lack of safeguards through basic accounting controls and procedures, including the city’s failure to obtain annual audits as required.
A bank official contacted a Board member last August regarding suspicious activity on city bank accounts. After terminating the city clerk once this information came to light, the Board asked local law enforcement for assistance.
The Daviess County Prosecuting Attorney subsequently requested an investigation by the State Auditor’s Office. After an initial investigation by her office, Auditor Galloway determined further investigation through an audit was warranted. The Board of Aldermen then passed an ordinance formally requesting and authorizing the audit, the results of which were announced today.
“Particularly for a town this size, the amount of missing money we discovered can have a direct impact on the services available to residents,” the Auditor said. “This is a serious breach of public trust at the expense of citizens. In addition to the recommendations the audit gives to city officials to help them work to restore that trust, I’ve provided information from the audit to appropriate law enforcement agencies to determine further action.”
Auditor Galloway has turned the report results over to local, state and federal law enforcement authorities and says her staff stands ready to assist prosecutors in any way possible. The full report on the city of Coffey, which received an overall rating of poor, can be found here.
SOURCE: news provided by AUDITOR.MO.GOV