Audit initiated to assist law enforcement; charges filed against former clerk earlier this year
JEFFERSON CITY, Mo (Nov. 27, 2018) Missouri State Auditor Nicole Galloway today released an audit of the City of Greenville, which found more than $160,000 missing from city funds. The audit was initiated as a part of a law enforcement investigation, which resulted in criminal charges filed by the Attorney General’s Office this summer. Greenville is located in Wayne County in southeast Missouri.
The report details improper payroll and other payments, improperly cashed checks and missing cash over a more than two year period. The activity occurred while former city clerk, Pam Birmingham, performed the financial accounting functions.
“In Greenville, there has been a serious violation of the public’s trust, and they deserve answers,” said Auditor Galloway. “Our forensic accounting expertise provided those details and also aided law enforcement during the criminal investigation. My office remains ready to assist moving forward to ensure accountability.”
Nearly $70,000 collected for utility and municipal court payments were not deposited in city bank accounts from Jan. 1, 2014 through April 14, 2016, and only $2 in cash was deposited into city utility accounts during this period.
Additionally, $39,000 in checks issued from various city accounts and made payable to the City of Greenville were improperly cashed, endorsed or negotiated by the former clerk. The former clerk provided falsified records to the board to conceal almost $26,000 of the improper payments and make it appear some of the checks were appropriate. There were also frequent transfers between banks accounts in an effort to conceal account shortages.
Auditor’s identified approximately $44,000 in overpayments on checks issued to the former City Clerk and cash withdrawals made for the payment of wages that were inconsistent with timesheets and past city records and practices. The former clerk received an increased rate of pay without documented approval from the board of aldermen and received excess compensation when she appeared to have been out of state and not at work. Other improper payments to the former clerk included $3,000 in improper uniform allowances and $5,000 in reimbursement checks and cash withdrawals with no supporting documentation.
A criminal investigation revealed the former city clerk deposited many of the checks written to herself from the city, cash, and other unrelated checks into a personal bank account and spent $62,416 from this account on various personal items.
Concerns about the former clerk were first identified by the city in 2016 and resulted in action to terminate her employment. The Missouri State Highway Patrol investigated and turned over evidence to the Attorney General’s Office, which requested the forensic auditing expertise of the State Auditor’s Office. As a result, the city formally requested the audit in March 2018.
The report also detailed lack of oversight by the city, which allowed the fraudulent activity to take place and continue undetected. The report includes recommendations to improve oversight of accounting functions, documentation of financial transactions and record keeping processes.
The complete audit report of the City of Greenville, which received an overall rating of poor, is available online here.