Auditor-logoA special investigation by the state auditor’s office has found the city clerk in a small western Iowa town made more than than $230,000 in improper payments over a five-year period. State Auditor Mary Mosiman says elected officials in the city of Neola asked for the review after a banker told the mayor the clerk had cashed in a CD, so the city’s bank account wouldn’t be overdrawn.

“This is a city with a population of just over 800,” Mosiman says. “That’s not a lot of people to cover this amount of money. Their sources of revenue are the utility accounts, so this does impact not only the individuals involved, but the entire community.”

Auditors found former Neola City Clerk Deb Schierbrock used the city’s bank account to pay for $10,000 worth of concrete work at her sister’s home. There were no documents to explain another $94,000 worth of spending. Payments were made to convenience stores for gas and other items, plus Schierbrock used city money at restaurants and retail stores like Sam’s Club and Walmart, but there are no records to show whether she was buying things for the city or for herself.

“That is one of the charges to a city is that they are to maintain proper documentation so every expenditure can be verified that it is for a public purpose and not for a personal use,” Mosiman says.

The state auditor says Neola’s city clerk paid herself too much overtime and didn’t make payments to the Iowa Public Employees Retirement System on time, endangering pensions for the other full-time city employee and a former part-timer. Mosiman says Schierbrock also altered 11 utility accounts for the family’s grocery store in Neola, her own home and her sister’s house.

“They were not being penalized for paying late on their accounts or they were having their account adjusted to owe less than they actually did owe,” Mosiman says.

Auditors estimate those 11 family accounts underpaid by nearly $56,000 over the five year period. Mosiman says cities like Neola that have just one employee handling all financial transactions need to have someone else, like the mayor, sign off on all the spending.

“We have been working with the city throughout this investigation and they have made some very good improvements, so we do think that they are going to be in a better place soon,” Mosiman says. “They have been very responsive to all of our recommendations and I know they are doing their very best to make sure that this does not happen again in their city.”

The auditor’s report has been turned over to the Iowa Division of Criminal Investigation, the Pottawattamie County Attorney and the Iowa Attorney General. Neola is located just off Interstate-80, about 20 miles northeast of Council Bluffs.