March 28, 2024

Audit of tiny Iowa town finds improper pay to city employees

DES MOINES (AP) — A state auditor’s investigation of a tiny western Iowa town has revealed more than $30,000 in improper pay to city employees and more than $75,000 in unpaid taxes, according to a report released Tuesday.

Auditor Mary Mosiman issued the report on the investigation of Pacific Junction that found $31,842 in wrongful disbursements to city officials over a five-year period, from July 1, 2008, through June 30, 2013. It also identified $75,825 in unpaid payroll taxes, including about one-third of that total in penalties and interest.

Concerns from citizens about the frequency and number of payroll checks received by city employees prompted the review. Pacific Junction has a population of approximately 471.

According to the report, City Clerk Kari Williams received nearly $16,000 in unauthorized vacation, sick leave and holiday pay and more than $1,000 in double-counted hours and unidentified payouts. Mosiman reported several instances where Williams issued her own paycheck before processing payroll for other employees, and calculated that Williams worked an average of close to 26 hours each week, making her ineligible for benefits granted to full-time employees — including paid vacation, sick leave and holidays.

A message left with the city clerk’s office seeking comment wasn’t immediately returned Tuesday.

The review also noted nine times Williams combined paid leave hours with regular hours worked for a pay period. An additional $5,370 was improperly distributed to both Williams and Donald Kates, the city’s maintenance supervisor, in the form of vacation payments, as well as $2,616 in sick leave payouts and $1,202 in bonuses.

The improper payouts to Williams and Kates resulted in more than $5,000 incurred for retirement funds.

Mosiman said city officials are working with IRS representatives to address Pacific Junction’s unpaid payroll taxes.

Copies of the report have been filed with the Mills County Attorney’s Office, the Iowa Division of Criminal Investigation and the office of Attorney General Tom Miller.