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O F F I C E O F A U D I T O R O F S T A T E

STATE OF IOWA

State Capitol Building

Des Moines, Iowa 50319-0004

Telephone (515) 281-5834 Facsimile (515) 242-6134

David A. Vaudt, CPA

Auditor of State

NEWS RELEASEContact: David A. Vaudt

515/281-5835or Tami Kusian

FOR RELEASE June 30, 2011 515/281-5834

Auditor of State David A. Vaudt today released a report on a special investigation of

the City of Stockton for the period July 1, 2004 to October 31, 2010. The special

investigation was requested by City officials as a result of concerns identified during

fieldwork for the Citys fiscal year 2010 audit.

Vaudt reported the special investigation identified $65,324.06 of improper and

unsupported disbursements and estimated undeposited collections. The $35,833.39 ofimproper disbursements identified include $24,675.68 of personal purchases made with the

Citys credit card by the former City Clerk, Larry McCoy, $4,294.34 of improper payroll

payments to Mr. McCoy and $1,819.29 of improper payments to Doug DeWitt, a former

Mayor and part time City Works employee. The personal purchases include Mediacom and

Dish Network services provided at Mr. McCoys personal residence, charges from an eye

surgeons office and whiskey purchased at Wal-Mart.

The $14,040.67 of unsupported disbursements identified include $5,544.08 of

purchases made with the Citys credit card, $541.00 of payroll disbursements to Mr. McCoy

and $7,501.92 of payroll disbursements to 2 former Mayors. Vaudt also reported the

unsupported disbursements include $2,614.47 of purchases which include pop, groceries

and flowers.

The estimated $15,450.00 of undeposited collections consist of utility collections. The

estimated undeposited utility collections were calculated by comparing the expected amount

of cash collections to the amount of cash actually deposited for the period of the

investigation. Vaudt reported Mr. McCoy deposited $1,534.87 of cash in the Citys checking

account between January 1, 2006 and July 31, 2010. Of this amount, $1,351.87 was

deposited during March 2010 through July 2010. In contrast, the new City Clerk deposited

$1,543.88 of cash in the Citys checking account between November 1, 2010 and March 31,

2011. Vaudt also reported adequate records for receipts and disbursements were not

available to determine whether additional collections were not properly deposited or

additional amounts were improperly disbursed.

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The report includes recommendations to the City to strengthen the Citys internal

controls, such as improvements to segregation of duties, approving minutes of City Council

meetings and requiring the City Clerk to prepare monthly financial reports. In addition,

Vaudt recommended the City perform reconciliations of utility billings and collections,

maintain supporting documentation for all disbursements, adopt a credit card policy andensure time sheets are completed in accordance with City policy.

Copies of the report have been filed with the Muscatine County Attorneys Office, the

Division of Criminal Investigation and the Attorney Generals Office. A copy of the report is

available for review in the Office of Auditor of State and on the Auditor of States web site at

http://auditor.iowa.gov/specials/1022-0655-BE00.pdf.

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