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State Auditor’s office finds mismanagement of funds in citizen-initiated audit of City of Sturgeon

Posted on Thursday, December 19, 2019 at 10:12 pm

December 17, State Auditor Nicole Galloway released an audit of the City of Sturgeon. The citizen-petition initiated audit,  was signed by 167 Sturgeon residents, who asked the auditor’s office to conduct an independent review of the city’s financial practices. The report, which highlighted concerns in several areas, gave a rating of fair and made recommendations to the city to address those concerns.

City Clerk Donna Tracy and Mayor Danny Joiner review the Sturgeon's audit.

City Clerk Donna Tracy and former Mayor Danny Joiner review Sturgeon’s previous audit in March 2019.

The City of Sturgeon will have to pay for the audit. An auditor’s office spokesman said the final cost will be between $15,000 and $35,000.

“Audits can make recommendations to help government officials take steps to better serve their constituents more effectively and efficiently,” Galloway said in her news release. “I encourage the Sturgeon Board of Aldermen to use this audit as a means to improve their financial and other practices.”

For more than 50 years, the city of Sturgeon has maintained a perpetual care cemetery fund for Mt. Horeb Cemetery, with the interest from the fund to be used for its preservation, care, upkeep and adornment. The audit found the city improperly transferred two certificates of deposit from the cemetery fund to the general revenue fund, dropping the cemetery fund balance from $177,000 at the end of fiscal year 2018 to $95,000 at the end of fiscal year 2019.

The audit alleges city officials also improperly spent from the principal of the cemetery fund and commingled cemetery fund assets with other city funds. The audit recommended that city officials ensure the cemetery fund is reimbursed for money inappropriately deposited and credited to the general revenue fund, that only interest income is disbursed from the fund, and that cemetery fund assets are kept separate from other funds.

The audit also found that the city’s budget, financial reporting and accounting records are in need of improvement, including an incomplete city budget, inaccurate accounting records, and inadequate financial statements submitted to the Auditor’s Office. Other accounting controls and procedures also need improvement, the audit said, and the city needs to strengthen its compliance with the Sunshine Law.

For more, see next week’s edition of the Centralia Fireside Guard.