HBPW gets forensic audit results

By Hannibal Courier-Post
Posted: Mar. 25, 2020 10:12 am

HANNIBAL | After approximately one-half year a team of forensic auditors has wrapped up its review of the Hannibal Board of Public Works' financial processes and accounting.

According to a media release issued by the HBPW the forensic analysis identified areas where the utility needed to make changes to help ensure that similar issues identified by the auditors do not occur again. The HBPW said in the release that “improvements” have already been made based on recommendations from Brown Smith Wallace, a CPA and business advisory firm from the St. Louis area that was hired last August by the HBPW to conduct the investigation.

According to HBPW Board member Stephan Franke, the utility has not delayed in implementing policy changes.

“The HBPW made significant changes to our policies months before receiving the forensic analysis results. In August 2019 the credit card policy was strengthened and in September the travel and purchase policies were as well,” he said. “In the time since then we've hired a new general manager (Ken Reasoner) who is a (certified public accountant) and started his career in the Missouri auditor's office.

“I have every confidence that we will live up to our responsibilities to serve our customers and do everything in our power to make sure this doesn't happen again. Mr. Reasoner will be a huge asset and we will continue to review and revise our policies as necessary in perpetuity.”

Reportedly, the forensic analysis covered operational expenditures totaling roughly $240 million, spanning 5 1/2 years and approximately 40,000 individual transactions.

According to the 41-page report the forensic analysis found that $12,408 was potentially improperly charged on HBPW-issued credit cards for personal purchases.

The HBPW noted in the media release that the “vast majority” of the improper charges were incurred by utility personnel who are no longer employed by the HBPW.

Current employees' personal spending amounted to $867. While all those expenditures were deemed “accidental in nature,” disciplinary measures were taken, according to the HBPW media release. The HBPW added that after a thorough review, there is no reason to believe that any of its current employees purposely spent utility funds on personal purchases.

The utility reports that an independent, internal oversight process was recently implemented to review all transactions and verify purchasing policy guidelines have been followed and to ensure all invoices and receipts are properly archived in the accounting system.

In August 2019, the HBPW implemented changes to its credit card policy to clarify when credit use is appropriate, which individuals have a critical business need for a credit card and what documentation should be obtained when a credit card is used. The new credit card policy has reduced the number of cards in circulation and added a multilevel review process to reduce the chance of inappropriate spending in the future.

The HBPW Board decided to bring in independent forensic auditors after one HBPW employee voiced concerns about the board's financial processes in July of last year. The allegations prompted a pair of independent investigations. One was undertaken by the Hannibal Police Department. The other was conducted by Jackson Lewis, the HBPW's long-time labor and employment counsel.

Both of those investigations were completed last year.

Last August it was reported that the personnel investigation conducted by HPD did not result in the recommendation that criminal charges be filed against anyone.



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