(Cumberland) Auditor of State Rob Sand today released a report on a special investigation of the City of Cumberland for the period January 1, 2014 through June 30, 2021. The special investigation was requested by City officials as a result of concerns regarding certain financial transactions processed by the former City Clerk, Grace Thomsen.
Sand reported the special investigation identified $58,532.27 of improper disbursements, $30,214.56 of undeposited, uncollected, and/or unbilled utility charges and fees, and $3,308.60 of unsupported disbursements. However, because City records were not sufficiently maintained, it was not possible to determine if additional undeposited, uncollected, and/or unbilled utility transactions existed or if additional amounts were improperly disbursed.
Sand reported the $58,532.27 improper disbursements identified includes:
- $26,877.58 of payroll related late fees and interest to Internal Revenue Service, IPERS, Department of Revenue, and Wellmark Blue Cross Blue Shield.
- $18,837.17 of unauthorized payroll and reimbursements issued to Ms. Thomsen.
- $10,207.80 of unauthorized payroll and reimbursements issued to other City officials and employees.
- $971.86 of improper disbursements to other vendors, and
- $1,637.86 of late fees and finance charges to other vendors.
Sand also reported the total undeposited, uncollected, and/or unbilled utility charges identified includes:
- $4,248.70 of undeposited and/or uncollected payments for the utility account held by Ms. Thomsen and her spouse,
- $2,325.20 of unbilled utility charges for the utility account held by Ms. Thomsen and her spouse,
- $17,993.57 of undeposited collections for other selected utility accounts held by City residents,
- $3,767.09 of unbilled utility charges and late fees for other selected utility accounts held by City residents.
- $1,180.00 of undeposited miscellaneous collections, and
- $700.00 of cash withheld from deposit.
The $3,308.60 of unsupported disbursements identified is composed of transactions for which the City could not provide supporting documentation, including reimbursements to Ms. Thomsen and other City employees and purchases made to other vendors.
During an interview, Ms. Thomsen admitted she had either not billed or not paid her utilities until March 2021. In addition, Sand reported several credit memos were processed on various resident accounts to adjust the account balances for payments which had been posted but subsequently deleted.
Sand recommended City officials implement procedures to ensure the City’s internal controls are strengthened, including segregation of duties, performing utility reconciliations, reviewing timesheets and/or calendars for payroll, and ensuring all disbursements are properly supported, approved, and paid in a timely manner.
Copies of the report have been filed with the Cass County Sheriff’s Office, the Iowa Division of Criminal Investigation, the Cass County Attorney’s Office, and the Iowa Attorney General’s Office. A copy of the report is available for review on the Auditor of State’s website at Special Interest Reports.
