Editor’s note: This is the second of a 5 part series taking a detailed look at the recently released audit for the town of Mannsville, spanning from July 11, 2011 through Dec. 31, 2015. Part 1 of this series is available at Ardmoreite.com.

The audit of the town of Mannsville by Oklahoma State Auditor and Inspector Gary Jones was released last week after a citizens petition request for an audit of town financial records.
The 119-page report provided to The Ardmoreite on Thursday, SA&I released the following findings in reviewing the “possible misappropriation of funds in utility collections/payment:”

The report states that:
•  Shonda Barnes did not appear to effectively execute the statutory duties of town treasurer in the collection and depositing of utility billing revenue.
The audit reports that though several town employees did process utility billing, the responsibility of such belonged to Barnes who represented herself to SA&I staff as the “Town Manager” and signed documents as the “City Manager.” Mayor Don Colbert stated to SA&I staff that  Barnes was the town “General Manager” and that “everything that comes through the town comes through Shonda (Barnes).”

• We(SA&I) were unable to locate computer generated receipts or billing stubs to support all tested utility transactions. Utility records were not properly maintained and customer postings were not sustained by appropriate supporting documentation.
The report states that although SA&I staff observed both receipting processes used for collection, the town was unable to provide printed receipts or billing stubs to support all utility transactions. It was also noted that receipts had been deleted or removed from the utility system. Copies of some of these receipts were found at City Hall, documenting a receipt had once existed and a transaction had occurred. An explanation as to why receipts were issued then deleted was not provided to SA&I staff.

• Utility payments posted to customer accounts, per the posting journals, did not agree with collections deposited in the Mannsville Public Works Authority bank account. There appeared to be at least $6,900 in payments posted to customer accounts that were not deposited.
The report states that payments posted to customer accounts per the monthly posting journals were compared to deposits made to the Mannsville Public Works Bank Account for the period of July 1, 2013 through June 30, 2014.  as well as the months of October and September, 2014 and July and August, 2015. Monthly totals were reconciled to back deposits with the records showing that at least $6,900 was reported collected and posted but not deposited into the MPWA account.

• Some utility payments were deposited, but were not posted to customer’s utility accounts as a payment, instead, credit adjustments were applied to the accounts without documented justification or explanation.
The audit states that “credit adjustments should only be applied to a customer’s account when there is a legitimate error in the amount due, collected or posted. A credit adjustment made in lieu of an actual payment can indicate a possible misappropriation of funds has occurred.” One incident provided showed an MPWA customer made a payment of $18 on their utility account dated March 6, 2014. The check was deposited in the MPWA account but was never posted to the customer’s account. Instead, a credit adjustment was made to the account on May 5, 2014 to replace the unrecorded check and subsequent late fee. The original check was never accounted for in the customer’s account history.

• We(SA&I) noted more than $3,400 in questionable credit adjustments posted to customer utility accounts without proper supporting documentation or approval.
The report states that when a credit adjustment is made that is not valid, an account can be credited, or reduced, even when a payment has been made, allowing for a possible misappropriation of the actual funds collected.
An example provided showed a billing stub reflecting a cash payment of $91.19 that was never received on the account, yet the customer’s account history reflects that a corresponding credit adjustment had been made on the account instead of the cash payment. The audit notes that “Not posting the payment as cash removes the accountability of $90.19 of cash collected resulting in cash that does not have to be accounted for.”

• Some collections initially receipted and recorded as cash were subsequently posted to customer accounts as check payments. The cash receipts were deleted from the system and the posted check payments could not be traced back to the deposit source, resulting in funds allegedly received but not deposited.
The report states “We (SA&I) noted some payments were recorded on customer accounts as check payments, although corresponding receipts, daily posting journals and billing stubs reflected cash had been received. The posted checks could not be traced back to bank deposit sources, indicating that a check transition had not actually occurred.”
An example provided showed that a MWPA customer made a $200 cash payment on March 5, 2014. On March 7, 2014, a $200 check was posted to the customer’s account. A $200 check from this customer could not be located in the deposit sources received by the bank.

• A receipt and posted utility transaction was deleted from the system or was altered after the fact.
The audit provided copies of a receipt issued for a $50 check payment posted March 3, 2014. The check was then deposited on March 5, 2014. The audit goes on to say that the $50 check payment was reflected as receipted and posted but was not reflected in the customer’s account history. A $87.24 check from the same customer was recorded in the account history on March 11, 2014, yet a check from the customer for $87.24 could not be located in bank deposit sources.

• Utility revenue deposits were not made daily as required by statute. Customer payments were held for days, and in some instances weeks.
The report noted that delays in re-posting varied, often exceeding four or five days between deposits and in at least one instance only one deposit was recorded for an entire month of collections.

• Internal controls over the processing and reconciling of utility collections, postings and deposits were inadequate.
The report states that “the town did not utilize unique computer user ID’s or passwords which created a lack of accountability for transactions entered… cash was not properly stored… Funds were not secured throughout the business day and all employees operated from the same cash drawer… Transactions entered could be changed or deleted without secondary approval… Daily reconciliation of funds collected and deposited were not always properly documented.

• It appears that Tina Bryant, former water clerk, received at least $418.80 of improper credit adjustments to her personal utility billing account.
The report states that “A questionable credit adjustment of $170.92 was posted to the account of Tina Bryant in April 2013. The account had been in delinquent status since August 2012 and was not paid in full until August 2013. No penalties were recorded during this period of non-payment.”
The report goes on to document other instances where Bryant’s account was credited without the accompanying documentation.
The report adds that “The questionable payments were reportedly discovered in January 2014 with Bryant resigning her position as water clerk in February 2014. Before ending her employment, Bryant re-paid $247.88 of the questionable postings.”