More than $160,000 missing from the city of Greenville's funds were detailed in an audit report released Tuesday by Missouri State Auditor Nicole Galloway.
The audit was initiated as a part of a law enforcement investigation after the board of aldermen identified concerns regarding the former city clerk's job performance in 2016.
The Missouri State Highway Patrol investigated and turned over evidence to the Attorney General's Office, which requested the forensic auditing expertise of the State Auditor's Office. As a result, the city formally requested the audit in March 2018.
On July 18, 2018, the Attorney General's Office filed felony criminal charges in the Wayne County Circuit Court against former City Clerk Pamela S. Birmingham.
She began employment with the city in June 2008 and was terminated from her position as city clerk on April 14, 2016.
Birmingham, of Silva, turned herself in at the Wayne County Sheriff's Office July 18 after a warrant was issued on felony charges of receiving stolen property, more than $250,000, and forgery, more than $70,000. She was released the same day on bond and waived her formal arraignment Aug. 9.
The audit report released Tuesday details improper payroll and other payments, improperly cashed checks and missing cash over more than a two-year period.
"In Greenville, there has been a serious violation of the public's trust, and they deserve answers," State Auditor Nicole Galloway said. "Our forensic accounting expertise provided those details and also aided law enforcement during the criminal investigation. My office remains ready to assist moving forward to ensure accountability."
The range of the audit included, but was not necessarily limited to the period from January 1, 2014, through April 15, 2016.
"Based on the timing and amounts of improper payments and monies missing during the audit period, it is likely there are additional improper payments and monies missing during periods prior to January 2014," Galloway's report included.
According to the audit report, nearly $70,000 collected for utility and municipal court payments were not deposited in city bank accounts from Jan. 1, 2014 through April 14, 2016, and only $2 in cash was deposited into city utility accounts during this period.
Additionally, allegedly $39,000 in checks issued from various city accounts and made payable to the city of Greenville were improperly cashed, endorsed or negotiated by the former clerk.
Birmingham allegedly provided falsified records to the board during monthly meetings to conceal almost $26,000 of the improper payments and make it appear some of the checks were appropriate. There were also frequent transfers between bank's accounts in an effort to conceal account shortages.
Auditor's identified approximately $44,000 in alleged overpayments on checks issued to Birmingham and cash withdrawals made for the payment of wages that were inconsistent with time sheets and past city records and practices.
Birmingham allegedly received an increased rate of pay without documented approval from the board of aldermen and received excess pay when she appeared to have been out of state and not at work.
Other alleged improper payments to the former clerk included $3,000 in improper uniform allowances and $5,000 in reimbursement checks and cash withdrawals with no supporting documentation.
Auditors pointed out final paychecks issued to Birmingham appeared questionable and are included in the estimated amounts overpaid.
"According to board members, on Thursday, April 14, 2016, the former city clerk was terminated, but was allowed to continue working the remainder of the day," the report said. "The former city clerk issued herself two final paychecks totaling $1,399 that were signed by herself and former Mayor (Fred) Bennett."
The audit report went on to say all other checks issued to Birmingham during 2016 were only signed by herself.
"Check number 3668 was issued for 32 hours of work (eight hours a day April 11 through April 14, 2016), and one sick day," the report detailed. "However, the former city clerk was terminated on April 14, 2016, and would not have been entitled to take a sick day on April 15, 2016, which resulted in an overpayment of $80. Check number 3671 was also issued to the former city clerk for 'three weeks/one sick day' in the amount of $1,042. No supporting documentation was retained to explain the purpose and amount of this check, resulting in an overpayment of $1,042."
The city of Greenville has promised to adopt personnel policies addressing overtime, holidays, vacation and sick leave, benefits, clothing allowances, and hours of work as well as personnel files for all employees.
"A criminal investigation revealed the former city clerk deposited many of the checks written to herself from the city, cash and other unrelated checks into a personal bank account and spent $62,416 from this account on various personal items," according to the audit.
The report also detailed lack of oversight by the city of Greenville, which allowed the fraudulent activity to take place and continue undetected. The report went on to provide recommendations to improve oversight of accounting functions, documentation of financial transactions and record keeping processes.
"The lack of segregation of duties and adequate controls, and the absence of proper oversight, as discussed in the remainder of this report, resulted in the overpayments, improper payments, improperly negotiated city checks, falsified records and missing receipts going undetected for a significant period of time," the audit conclusion reported. "The unusual nature and lack of supporting documentation for various cash withdrawals and checks written, should have caused suspicion and alerted the board to the misappropriation. It is apparent city financial activity was not adequately monitored by the board."
Moving forward, officials reported to auditors the city of Greenville "will continue to work with law enforcement officials regarding criminal prosecution and seek restitution as best we can."
Following the incident, a member of the city's board of aldermen documents the review of time sheets, reviews bank statements and all canceled checks and will then document the review on the bank statements.
Dual signatures are now required on all checks, signature authority is limited to three board members and the city clerk does not sign any checks.
The complete audit report of the city of Greenville, which received an overall rating of poor, is available online at https://app.auditor.mo.gov/Repository/Press/2018120938086.pdf