A special investigation by the state auditor’s office has identified nearly $331,000 worth of “improper” financial transactions by the former city clerk in a small town in the southwest corner Iowa.
Riverton is in Fremont County. According to the last census about 300 people live in the community. Auditors were called in to review the city’s accounts after concerns were raised about City Clerk Carol Jennings. State Auditor Mary Mosiman says Riverton’s mayor went searching through a dumpster after getting a tip that Jennings was throwing away city documents.
“The documents that he found in the dumpster included bank statements, carbon copies of checks and deposit slips,” Moseman says, “and as he and the other city officials went through the information that he found…they could tell that personal payments using the city’s funds had been made from the city’s bank accounts.”
After that discovery, Jennings was quickly suspended, then fired in February of 2015. Auditors reviewed seven years’ worth of city accounts. They learned Jennings opened two bank accounts and diverted at least $33,000 worth of city money into those accounts. City officials had no idea these accounts existed.
“She opened up at least one of these bank accounts by providing the bank with a copy of minutes from a city council meeting which appeared to authorize her to open such an account,” Moseman says.
Auditors found city council minutes on a city computer and got a copy from a city council member, showing that wasn’t the case and Jennings had altered the documents presented to the bank. Jennings made another $32,000 worth of purchases at places like Wal-Mart and Sam’s Club with city money, but the receipts weren’t kept to show if she was shopping for herself or the city.
“We actually went through minutes from the city council’s meetings held in 2012, 2013 and 2014 and we did not identify any instances in which the city officials approved Wal-Mart or Sam’s Club purchases,” Moseman says.
In addition, one of the cards used for buying things at Sam’s Club actually belonged to the city clerk’s sister. Nearly $150,000 worth of city money from things like utility payments were not deposited in the City’s bank accounts during the seven years Jennings handled Riverton’s books. Moseman says auditors found even more irregularities.
“She would ask for reimbursement to things that city clerks typically do, like conferences and trainings, but we did verify with the conference sponsors and determined in at least one case, she had registered for one conference with city funds, then cancelled the registration and then she deposited the refund check to her personal bank account,” Moseman says.
Copies of the report on how Jennings handled Riverton’s finances are now in the hands of state and local prosecutors and law enforcement agencies.