Former Arcadia Clerk Used Town Funds to Pay Retirement Account Contributions

The former clerk of Arcadia appears to have used $5,961 in town funds to pay her employee contribution to the Municipal Employees Retirement System (MERS) and overstated the employee portion of payroll contributions to her retirement account in reports she filed with MERS, the Legislative Auditor said in a report released today.

Under state law, all eligible town employees must join MERS and contribute a percentage of their pay to the retirement plan. At the time of the audit, the required contribution was 5% of salary. A review of the records showed that the former clerk, who handled the town’s payroll, did not withhold all of the 5% from her own paycheck between 2009 and 2014; instead, she used town funds to make up the difference. The clerk resigned in August 2014 and then withdrew the employee share of her MERS account – $9,062 – of which $5,961 was more than she contributed.

The investigative audit of the town’s finances also found that officials could not provide receipts for $14,538 in credit card purchases. Auditors found that between December 2013 and September 2015, town employees made 327 purchases using the town credit card totaling $58,160. Receipts could not be located for 133 of the transactions, totaling $14,538. By not maintaining the records for all credit card purchases, town employees may have violated state law.

The audit report noted as well that members of the Town Council may have violated state law by performing an official act of ratification regarding a legal matter. The ratification was not properly advertised on the council’s meeting agenda, added to the agenda during the meeting, or included in the minutes of the meeting, as required by the state’s open meetings law.

The audit was conducted after several complaints to the Legislative Auditor’s office alleging mismanagement of town funds, the state auditor said.

Town officials said they will look at pursuing legal action to recover the money taken by the former clerk, implement new policies for credit card purchases, and pay close attention to the requirements of the open meetings law.