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State audit: More than $1.7 million in City of Hartshorne utility payments missing

The audit cites failures by several city officials to "perform their fiduciary duties," resulting in an "extensive loss of funds for the citizens of Hartshorne," according to the audit documents. (File)

A state audit has found evidence of multiple City of Hartshorne officials misappropriating and misusing citizens' money, according to the Office of the State Auditor and Inspector.

The state auditor's office says a group of citizens in Hartshorne petitioned for a special audit after they became disgruntled with the city council. The citizens alleged that the council members were not responding to the citizens' concerns, so the auditor's office was asked to conduct a review of the city's financial activity between July 1, 2015, and Aug. 31, 2016. The scope of the audit was expanded in the process to include financial activity beyond those dates.

Misappropriations

The audit cites failures by several city officials to "perform their fiduciary duties," resulting in an "extensive loss of funds for the citizens of Hartshorne," according to the audit documents. The biggest revelation in the audit: More than $1.7 million in citizens' utility payments are missing.

Former City Treasurer Shirley Day, who retired Sept. 1, 2016, failed to "effectively execute her duties as the City Treasurer in the collection, recording, and depositing of utility billing revenue," according to the audit. The auditor's office says the missing utility payments were posted to customer accounts but were not deposited by the city between July 2009 and 2016.

The audit claims that more than $18,000 in court fines were misappropriated under former City Court Clerk Dawn Dunkin between November 2015 and May 2016. After Dunkin retired in August, cash deposits for the court increased more than $2,000 per month, according to the audit.

Improper compensation, personal charges

Dunkin is also accused of charging more than $80,000 in personal expenditures to a city credit card.

The audit also claims that the city's elected officials were paid higher salaries than were provided by city ordinance. City of Hartshorne and Public Works Authority employees also routinely received their paychecks early -- sometimes, up to two weeks before the end of the pay period, according to the audit.

Former City Council member John Beauchamp is accused of receiving more than $6,700 of improper compensation from the Public Works Authority. Another PWA employee issued the checks to Beauchamp, according to the audit.

Fire Chief David Mass is accused of receiving nearly $4,000 in improper payments through a contract between his personally owned company and the city, the audit says.

Public meeting violations

The city is also accused of multiple violations of the Open Meeting Act and Open Records Act. In June 2016, City Council members reportedly discussed items in a meeting that had not been previously posted on an agenda.

Dunkin, the former city court clerk, is also accused of falsifying minutes for a meeting in August 2015. The minutes reflected approval of a contract that was never approved by the council, according to the audit.

It's not yet clear if any arrests are expected in relation to any of the claims.

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