'Gross mismanagement': City of Lindsay forensic audit released by Auditor Cindy Byrd
OKLAHOMA CITY (KFOR) - On Tuesday, Oklahoma State Auditor & Inspector (SA&I) Cindy Byrd released an audit report for The City of Lindsay after District Attorney Greg Mashburn requested an investigation.
According to Byrd’s investigation, the timeframe for the city’s financial records investigated were from July 1, 2019 to June 30, 2022. The The SA&I audit, concluded significant mismanagement and a failure of Lindsay City Council members oversight of expenditures.
“The warning signs were there but no one was looking,” Auditor Byrd said. “Lindsay’s elected leaders have a legal obligation to oversee the City’s finances. Instead, the City’s financial mismanagement was exacerbated by ineffectual leadership that failed to maintain records
and oversee City functions. As a result, Lindsay taxpayers have been shortchanged by hundreds of thousands of dollars.”
Here is the breakdown of the problematic findings released by Auditor Byrd:
Utilities
- The City under-billed commercial customers by approximately $1.5 million. The City expects to recover about 45% ($676,000) of that amount.
- Failures to process utility rate hikes, and collect late fees, resulted in lost revenue of approximately $152,460.
- Two City employees and two City Council members received utility services despite not making payments for periods ranging from four to eight months.
Sales Tax
- Sales tax earmarked for the Lindsay Public Works Authority (LPWA) in the amount of $493,990.16 was improperly retained in the General Fund bank account and not utilized for LPWA restricted purposes as required by law.
Expenditures
- Credit card expenditures in excess of $223,000 per year, many without purchase orders, occurred without any board approval or oversight.
- Eight invoices from the Grand River Dam Authority [GRDA] were paid late, some due to insufficient funds, resulting in late fees totaling $16,319.04.
- Due to missing records, the appropriateness of $34,488.83 in tested purchasing card expenditures could not be verified.
- Lindsay City Manager, Rebecca Niernberger, made inappropriate fuel purchases totaling $531.14 and questionable food purchases totaling $1,789.85. She also improperly obtained $727 worth of fuel for her personal vehicle. The City had no records to support $10,651.87 of Niernberger’s purchasing card expenditures.
- The City also had no records to support $20,156.49 of purchasing card expenditures from Lindsay City Clerk Kathy Hammans.
Audits
- The City’s financial audits were not completed in the statutorily required timeframe. Two audits were filed more than a year late.
- The lack of timely audits hindered the Council’s assessment of the City’s financial status and prevented the City from applying for grant funds.
Auditor Byrd wrapped up the audit indicating The City of Lindsay is now moving towards a brighter future.
“While we found countless examples of deficient oversight, mismanagement, and poor decision-making, we classified less than two-thousand dollars of expenditures as fraudulent,” said Auditor Byrd. “On a very good note, the City of Lindsay is working to resolve the issues we discovered and appears to have turned the corner financially. The City has caught up on its audits and is now fully eligible to apply for grant money.”
Read the full audit here.