State-auditor-signA report from the State Auditor details the misuse of thousands of dollars of city money which led to the firing of the Defiance city clerk.

Auditor Mary Mosiman says the city’s bank raised concern’s about a cash withdrawal attempt by former city clerk Kristen Wagner, and that then led to the discovery of other issues.

Mosiman says the city has a daily withdrawal limit of 250 dollars, and attempt was made to withdraw 300 dollars was made in April. “So, the bank notified the mayor. The mayor requested banks statements and that’s when he noticed electronic payments, none of them which should have been able to take place,” Mosiman says. The 37-seven-year-old Wagner was called into the sheriff’s office on April 27th and after an interview was charged with second-degree theft. The city later fired her.

Mosiman says her office was called in to try and track down the money taken by Wagner. “Our investigation identified $10,821 of improper disbursements, and $10.27 of unsupported disbursements,” according to Mosiman. “The improper disbursements were a little over six-thousand dollars to MidAmerican Energy and Verizon Wireless, as well as other vendors,” Mosiman says.

She says the cellphone payments were a second indication that something wasn’t right. “The city does not provide cellphones to its employees — so that was one of the big red flags when city officials became aware of these electronic payments,” Mosiman says. Mosiman says Wagner paid her own utility bills with city funds and also paid for the cellphone of someone in her household. The audit also found $1,600 in cash withdrawals from the city account, and around $1,200 in improper payroll, and $1,700 in late fees, penalties and interest.

Wagner was a part-time city clerk who handled the finances for the small town without much oversight. Mosiman says that’s one of the changes they recommended. “The governing body needs to provide oversight, needs to be looking at the bank statements, needs to be looking at the documentation for the disbursements,” Mosiman says. “I am certain it will take place from this point forward in this particular city, but it is something that every government entity needs to provide on a regular basis.”

Wagner has pleaded not guilty to the theft charge and is scheduled to go on trial January 12th