A special audit into city finances targeting alleged improprieties on the part of Mayor Mike Allison and retired City Administrator Howard Partington has found that nothing improper had taken place, Interim City Administrator George Kolb reported Wednesday.

It was on Sept. 5 that the City Council approved an agreed-upon procedures audit to investigate alleged improper behavior Partington and Allison, including a bonus check from Allison to Partington. Councilman Dana Dawson first proposed the audit at that meeting.

But, “I have no evidence to support the claim that Mayor Allison issued a city check in the amount of $10,000 as a bonus to former City Administrator Partington,” Kolb said in a news released issued Wednesday morning. “I have no evidence of any collusion on the part of staff to facilitate any such action. Therefore, I would recommend no further action on this matter.

“After reviewing the documents and the actions of City Council and especially the mayor, I found nothing unusual or out of the ordinary to question or pursue,” Kold said.

Looking into things

After the audit was approved, Dawson and fellow Councilman Brock McPherson were asked by City Attorney Bob Suelter and City Clerk/Finance Director Shawna Schafer to be included in the conversation to give guidance on what exactly they were wanting. On Oct. 12, this committee met with auditors from Adams, Brown, Beran & Ball to discuss the audit plan and to identify the objectives of the audit and the process to get there.

At the meeting, a specific charge was ascertained and agreed upon, Kolb said. It was alleged that Allison in 2004 signed a city check for $10,000 as a bonus to Partington. It was further alleged that the City Council had passed a resolution authorizing the mayor to make such payments in the future. 

After discussion, it was agreed by the committee, staff and the auditors would make this the focus of the investigation. In addition, city staff would look through payroll records to see if such payment had been made and the auditors’ role was to assist in such search if needed, and to determine if there were any suspicious irregularities.

No other accusations of impropriety were presented for discussion or investigation, Kolb said.

Adequate checks, balances in place

“After a thorough examination of the payroll records from years 2005-2017, there was no evidence to support the allegations raised,” he said. There is no evidence that a check for $10,000 was ever issued by anyone, including the mayor or City Council, or any collusion by staff.

In addition to reviewing payroll records, investigators examined the minutes of council meetings during the period in question. There is ample evidence that Partington was granted a 457 deferral, paid by the city, equivalent to 10 percent of his current salary.

The 457 plan is a type of nonqualified, tax advantaged deferred-compensation retirement plan that is available for governmental and certain non-governmental employers. The employer provides the plan and the employee defers compensation into it on a pre-tax basis.

Kolb said they also looked at the checks and balances of the check writing process. The mayor, City Council, city administrator or any other staff member cannot sign or issue checks on their own, and the authority to issue checks for payment rest in the finance function of the city. 

The authority to approve payments rests with City Council either through the budget or special actions, Kolb said. The city administrator and department heads can approve payments as authorized by City Council. However, no check writing authority has been granted to any of those officials. 

Kolb said the auditors have attested that the process and procedures for requesting and issuing checks has the proper safeguards and securities required for our operations. In 2004 and 2005, the auditors issued audit reports expressing no findings that would suggest that an expenditure of that size was inappropriately made. 

Although the audit is not required or expected to find fraud, an expenditure this size would most likely be looked at.

It is common throughout the city management profession and among cities throughout the country, for cities to pay into deferred compensation programs for their manager/administrator, Kolb said.