OKLAHOMA CITY – House Bill 1058 proposes reforms of municipal auditing procedures to deter abuse of municipal credit/debit cards and failure to deposit utility receipts, shenanigans that were uncovered in Hartshorne, Bennington and Lone Wolf.
For example, a state audit of Hartshorne municipal records for July 1, 2015, through Aug. 31, 2016, revealed that:
Ÿ between July 2014 and July 2016, $617,590 in utility payments were posted to customer accounts “but were not deposited” by former City Treasurer Shirley Day, then-State Auditor Gary Jones reported.
Ÿ from November 2015 through May 16, “it appears that at least $18,004 in court fines were misappropriated,” the state audit found.
Ÿ the town’s former city clerk, Meredith Dawn Dunkin, charged at least $80,083 in personal expenditures with the city’s Visa credit card.
Dunkin, who retired in August 2016, pleaded guilty in Muskogee’s Eastern District federal court in 2020 to stealing $80,000 from the City of Hartshorne between 2013 and 2016 via use of the city-issued credit card. She was sentenced to nine months in prison and ordered to pay $80,083 in restitution to the Pittsburg County town of 1,900 residents.
Former Hartshorne City Treasurer Shirley Day was charged in the Eastern District federal court with obtaining more than $10,000 in benefits under a federal program “involving a grant, contract, subsidy, loan, guarantee, insurance, or other federal assistance” from 2009 through 2016 “by fraud, embezzlement, and otherwise without authority…”
Day, 71, signed an agreement on April 30, 2021, to plead guilty and pay restitution, but she died on Aug. 10, 2021, without having been sentenced.
An investigative audit of the Town of Bennington, a Bryan County town of approximately 375 residents, found that court fund revenue was not deposited daily, and receipts were not issued for most citation payments. Over a three-month period, at least $5,180 in court fund revenue “could not be traced to bank deposits,” state auditors reported.
Similarly, utility payments were not deposited daily, as mandated by state law. During a three-month period in 2016, a little over $720 in utility payments were not deposited, auditors learned.
In addition, the clerk-treasurer made 33 unauthorized expenditures totaling $1,619 from the town’s court fund by using an unapproved bank debit card during an 80-day period in 2017. Purchases were made with the card at Lowe’s, Walmart, Dollar General, several convenience stores, Arby’s, McDonald’s, an auto parts store and other businesses.
After Bennington’s board of trustees “became aware that the debit card was being used” they canceled it, auditors wrote.
In yet another blunder, the Town of Bennington and its Public Works Authority failed to report and remit payroll taxes, which resulted in at least $118,000 in unpaid taxes, penalties, fines and interest. As of January 2022, the town and the PWA still owed more than $101,000 of that debt.
A state audit of the Town of Lone Wolf revealed that $22,743 in town funds were spent from January 2012 through December 2017 with a town debit card, “with no evidence that the transactions were ever presented to or approved by” the Public Works Authority or the Board of Trustees.
Those included purchases at International House of Pancakes, Sonic, McDonald’s and Arby’s, as well as expenditures at CJ’s Corner, Walmart, Staples, Dollar Tree, PayPal and Cellular Outfit.
The former office manager in Lone Wolf’s Town Hall told auditors she kept the card in her desk drawer “and there was no log used to track the control of the card or the purchases made.”
In the absence of a log, receipts or purchase orders “it could not be determined who was responsible for these questionable expenditures,” State Auditor Cindy Byrd lamented.
The Town of Lone Wolf provides water, sewer and trash collection services to approximately 175 customers, auditors reported.
During a three-year period, $159,661.62 in cash payments were posted to customer accounts in the Kiowa County town’s utility billing system but $157,629.92 in cash was deposited in the town’s PWA bank account – leaving $2,031.70 unaccounted for.
Because of the town’s lack of properly receipting and recording utility payments, “it could not be verified that these funds were ever deposited,” auditors reported.
Since utility billing records and reports were not properly maintained, “it was not possible to account for all utility revenue,” State Auditor Byrd wrote.
Several customer “histories” in the utility billing system “appeared to have been altered or were missing information,” with “substantial time gaps” between billings and postings. In one case a customer’s payment was not logged for four months, and the gap in another customer’s account was seven months, records show.
The Jack Brown utility software that Lone Wolf uses for its PWA billings allows users to “delete, manipulate, and otherwise modify customer data used in the utility-billing process,” Byrd said.
Lone Wolf town records were “disorganized, incomplete, and sometimes missing,” Byrd wrote.
Neither the former office manager, Margrett Mae Horton, nor the former town clerk/treasurer, Bonnie Charlene Keesee, “deposited money daily as required” by law. Keesee relied on Horton to make the deposits, and Horton “received, recorded, and deposited utility payments only two to six times per month,” the State Auditor reported.
Because of sloppy bookkeeping, the lack of daily deposits “resulted in bank overdraft fees totaling $7,247 and created an overall lack of accountability for utility revenue.” Ultimately that cost was reduced to $3,972 because in 2017 the town requested and received from BancFirst a refund of $3,275 in overdraft fees.
Keesee and Horton both have been charged in Kiowa County District Court with embezzlement.