The State Auditor released a report today on the special investigation of the financial operations of West Liberty. Deputy State Auditor, Warren Jenkins, says it was hard to figure out what was going on with the city operations because of there was no paper trail to follow.
“We found that simply because of inadequate records, we could not tell whether all of the ambulance billings that should have been received were actually collected. Whether what was collected was actually deposited. A similar situation with citations issued by the police department,” Jenkins says.
He says they also had trouble getting a handle on the utility billing, which suffered from the same poor record keeping. But one big error did stand out in the utility bills. “We did find in the case of the electric utility, that an incorrect rate had been entered into the utility system, which had the effect of increasing the bills paid by the electric customers by about 260-thousand dollars over a seven-month period that ended in January of this year,” according to Jenkins.
Jenkins says that billing error led to each electric customer paying around 100 dollars more than they should have. The special investigation covered the period from July of 2010 to January of 2014 and was requested after concerns were raised about former city administrative secretary, Marivel “Mari” Pearson. She was responsible for collecting and recording collections for utilities, ambulance calls, fines, park and recreation fees, and other miscellaneous revenue.
The audit found Pearson was not happy when a new billing system was installed and said she “became hostile” when questioned about discrepancies in utility payments by customers. It also said that Pearson would sometimes open the utility payment box and prepare a deposit before other city employees had a chance. Some customers paid their utility bills with cash. Pearson was fired in November of 2013.
Jenkins says getting information was not easy. “They did not have all the records that we would have recommended, particularly reconciliations where you can tie from one month to the next, some individual records were not available,” Jenkins says. “Unfortunately this is the situation that we find in many small entities.”
He says they do know how the electric billing went wrong. “We did find that the city manager at the time was the one who was basically responsible for the incorrect electric rate being used. But essentially, the lack of adequate records was simply the responsibility of those who should have been maintaining and preparing the records, and those who were supervising them,” Jenkins says. Jenkins says the report makes several recommendations on how West Liberty can improve its operations. He says there is now a new city manager in place. Copies of the report were sent to the Muscatine County Attorney, Attorney General and DCI.
Find out more about the audit here: West Liberty investigation PDF