Editor’s note: This is the ninth and final installment of the series taking a detailed look at the recently released audit for the town of Mannsville, spanning from July 11, 2011 through Dec. 31, 2015. Previous parts of the series are available at Ardmoreite.com.
The audit for the town of Mannsville addressed a number of concerns presented by members of the Mannsville community. During the process, Oklahoma State Auditor and Inspector office auditors found additional issues that were not included in the initial citizens’ petition for the audit.
Other issues identified during the audit process deemed significant enough to include in the final report include.
• At least $947 of public funds were utilized by the town to establish an unauthorized petty cash fund established as an inmate commissary fund.
Per a memo dated July 19, 2012, a petty cash fund was established with the proceeds of scrap metal sales. The audit notes that town funds being diverted and used for an inmate commissary fund and not used for the operation of the municipality appears to be a violation of statutes. Additionally, the audit states that the Oklahoma Department of Corrections guidelines and rules prohibits inmates from receiving anything of value and prohibits project supervisors from giving anything of value to an inmate worker.
• Scrap metal obtained from MPWA property was sold with no evidence to support that the $2,466.88 in proceeds was deposited into the MPWA or town bank account.
The audit states that between June 14, 2012 and July 30, 2015, more than $2,466.88 worth of scrap metal was sold to a scrap metal vendor located in Ardmore. Records reflect that Shonda Barnes, town treasurer, and a former inmate worker used a “City of Mannsville” truck to transport and sell the metal. Proceeds from the sale were issued in the form of cash and two checks. No evidence was found indicating that the checks were deposited into a town or Mannsville Power and Water Authority bank account and accountability for the cash could not be determined.
• The Mannsville Volunteer Fire Department maintains a bank account outside of the authority of the town. All the financial activity of the department was not reported to, or approved, by the board.
The audit states that Mannsville Fire Chief Derek Gray said the account was used as a fundraising account. Auditors found deposits on the account from the town and the Oklahoma Department of Agriculture, which appeared to be non-fundraising sources. Discrepancies were also noted in the withdrawals and purchases made from the account, including a withdrawal of $2,000 for air conditioning for the town’s new fire station, though the invoice for the purchase was for $1,792.88 with the remaining funds “not appearing to have been redeposited back into the account and no additional supporting documentation being included.”
• The town has not received an independent audit for 5 years which resulted in the loss of $7,898.83 in gas tax revenue.
The audit reports that state law requires that the town, as well as the authority, have an annual financial statement audit or agreed-upon procedure engagement performed by an independent certified public accountant. The last independent audit for the town was for the fiscal year ending July 30, 2011. According to the audit, the independent CPA firm Rahhal Henderson Johnson PLC, who filed the FY2011 report, resigned from the agreed-upon procedure agreement with the town in a letter dated March 2, 2015. The audit states “per an official of the firm, they had been unable to get sufficient records to perform the engagement.”
• Barnes signed for a $254.54 cash withdrawal from the MPWA bank account. No supporting documentation could be provided for the transaction.
Per the audit, Barnes could not recall the purpose for the withdrawal from the account or the disposition of the cash, No supporting documentation was provided for the transaction.
• A ‘management representation letter’ presented to Barnes for signature from town officials was not returned to SA&I.
The audit states that due to a lack of cooperation and an absence of documentation the management representation letter, a letter signed by all elected town officials, was requested by auditors. The audit states that the letter was presented to Barnes but never returned.