State Auditor Mary Mosiman says she doesn’t see much of an impact from a 3-year old state law that was designed to crack down on embezzlement in Iowa’s small towns. The state auditor is now conducting surprise inspections for 600 small towns once every eight years.
“I’m gonna say we haven’t seen any reduction. When people want to commit fraud they figure out a way to try and do it,” Mosiman says. The law was passed because of an increase in small town embezzlement and a general lack of oversight. Mosiman says doing the checks and then publicizing it when they find something wrong has helped in some ways.
“We’ll put out a fraud (report) on a small city and we’ll get calls from another city to walk through procedures with them — so there is some benefit,” according to Mosiman. She says the threat of surprise inspections is sometimes not enough to stop someone.
“There are some frauds that have been taking place for a decade or longer. So, once they get involved in it it is hard for them to turn back,” Mosiman explains. The auditor says a handful of towns have received a second follow-up visit. She says some small cities are surprised that the state is taking their bookkeeping practices seriously.