Auditor finds problems in Bricelyn
The state auditor’s investigative division will be contacting the city of Bricelyn because of all the financial irregularities which occurred in 2013.
Mike Burkhardt, of Burkhardt & Burkhardt, Ltd in Mankato, presented results of the 2013 audit at a Bricelyn City Council meeting filled with frustrated citizens last Tuesday night.
“We found some serious issues in 2013,” Burkhardt says. “It’s not pretty.”
First, Burkhardt pointed out that “everybody and their brother” have keys to the Bricelyn City Hall building and the city clerk’s office and he knew people would go in without the city clerk even being aware of it.
“It has to stop immediately,” Burkhardt explained. “There should be one key, two at the most. No one should be in that room unless they are with the city clerk.”
The second finding Burkhardt addressed to the City Council was making timely deposits of cash receipts.
“Cash was received and not deposited in a timely basis at all,” Burkhardt says. “One thing only can come from this situation, and it’s called fraud.”
The cause was due to the nature and size of the city. The former mayor conducted business for Bricelyn on his own, which normally would be the responsibility of management. Burkhardt continued with his legal compliance findings by informing the City Council they cannot donate money unless it is to a public service.
“During 2013, the city was unable to provide specific authority to donate $1,000 to a local nonprofit group,” he says.
Bricelyn must ensure the disbursement of public funds will be allowed only for public purpose and limited to those with statutory authority, according to Burkhardt.
Next Burkhardt told the City Council they failed to accept donations totaling $48,000 by council resolution.
“Every time you receive a donation you need to have a resolution accepting that donation,” Burkhardt explains. “The resolution needs to include what it is for and who it is from.”
Burkhardt continued to tell the City Council that during 2013, the city of Bricelyn was unable to provide specific authority for the following disbursements: meals totaling $175 to emergency medical technicians personnel during a weekend training session and lunches for the fire chief totaling $75.
“It is illegal,” he says. “Disbursement of public funds will be allowed only for public purpose.”
Burkhardt also found the city was unable to provide specific authority to pay for three social events totaling $1,262.
“There are state statutes that say you cannot pay for Christmas parties, summer picnics and so on,” Burkhardt says. “You just can’t be doing it.”
The city of Bricelyn was also unable to provide specific authority to pay for expenses totaling $672 relating to fundraising activities of the Bricelyn firemen’s relief association.
“The city cannot pay for fundraising,” he explains. “If the fire relief association wants to have a fundraiser, they need to take it from their general fund. The city paid for all of the pancake breakfast supplies.”
Lastly, during 2013, the city entered into a contract for construction of a fire hall without requiring performance and payment bonds from the contractor and failed to obtain a withholding affidavit from the contractor before making final settlements on the contract.
Burkhardt informed the council they need to ensure the bonds and withholding affidavits are received on all contracts expected to exceed $100,000.
“The council needs to put your heads together, because the state auditor will be contacted,” Burkhardt says. “Most of the receipts we looked up are available for you to view. Things need to change around here.”