Full audit sought for Riverside after special investigation finds faults

Several transactions by city staff from July 2006 to December 2012 questioned

Published: January 7 2014 | 6:54 am - Updated: 29 March 2014 | 1:44 am in

Riverside leaders want a full financial audit after a special investigation by the state auditor questioned thousands of dollars worth of financial transactions by city staff from July 2006 to December 2012.

During a regular meeting Monday night, the Riverside City Council approved a motion to request a full audit by the state auditor's office. The state will provide Riverside with a cost estimate, and if approved, the audit will occur in early 2014.

"It will cost a little more, but I think it is well worth the extra effort," councilman Robert Schneider Jr. said.

Monday marked the first time the special investigation has been addressed in an official capacity in this community of about 1,000 people in southeast Iowa. During the meeting, some of the changes that have already been enacted were laid out and the City Council approved additional recommendations.

Riverside City Administrator Rusty Rogerson said he's notified the auditor's office of several of the responses that show the city is taking the audit seriously, such as requiring two signatures on checks, eliminating the petty cash fund and double and triple checking invoices.

Also at the meeting, City Council approved an independent consultant, which was a recommendation in the special investigation, to review the vacation and sick leave accrual and utility reconciliations.

Rogerson was approved to pay the consultant $30 an hour. The full financial audit could cost $8,000 to $10,000, which is more than a $3,000 to $5,000 spot audit, which is required annually for cities with annual revenues of $1 million or more.

The response became necessary after the state auditor's office released a report from a year-long audit in late December.

Among several findings, the investigation released on Dec. 20 detailed $26,756.35 of unauthorized payments by the city into staff’s flexible spending accounts for health care, $24,260 in improper sick leave payouts and $4,900.98 in improper vacation payouts.

The audit also found $274,047 in disbursements paid prior to City Council approval, $32,016.94 that did not have sufficient documentation and $10,289.10 that were paid without City Council approval, although none of these payments were considered improper.

Much of the audit targeted the previous city administration. Washington County Attorney Larry Brock said on Monday that he's contacted the Iowa Division of Criminal Investigation to request additional investigation to determine if charges are warranted, but has not yet heard back.

DCI did not return a message from The Gazette.

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