The City of Lindsay lost more than $1 million in subsidies and underbilled commercial customers by approximately $1.5 million during a three-year period in which elected leaders failed to provide adequate oversight while city management made poor financial decisions, according to the state of Oklahoma. accounting and inspectorate firm
The agency released those findings, along with several other financial missteps, this week in a forensic audit report on the town of about 2,800 in Garvin County, about 60 miles south of Oklahoma City.
District Attorney Greg Mashburn requested the investigation. Auditors looked at Lindsay’s financials from July 1, 2019 to June 30, 2022.
State Auditor and Inspector Cindy Byrd said in the report that there were “clear warning signs,” such as excessive spending on ticket purchases, the improper use of limited resources and undetected accrual of late fees.
“The warning signs were there, but no one was looking,” Byrd said in a news release. “Lindsay’s elected leaders have a legal obligation to oversee the city’s finances. Instead, the city’s financial mismanagement was exacerbated by ineffective leadership that failed to keep records and oversee city functions. As a result, Lindsay taxpayers have been shortchanged hundreds of thousands of dollars.”
More: State auditor reports Oklahoma city leaders overpaid themselves and wrote blank checks
The inability to obtain timely audits may cost Lindsay more than $1 million in grant funds.
The inability to maintain a functioning utility program has also cost the city more than $1 million, according to the report. The city expects to recover about $676,000 of that amount.
Auditors also found that failure to process utility rate increases and collection of arrears resulted in a loss of revenue of approximately $152,460.
The sales tax, earmarked for the Lindsay Public Works Authority in the amount of $493,990.16, was improperly withheld from the General Fund’s bank account and not used for LPWA-restricted purposes as required by law, the report said.
Auditors found that credit card expenses exceeded $223,000 per year, many of which were without purchase orders or any board approval or oversight.
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Eight Grand River Dam Authority invoices were paid late, some due to insufficient funds, resulting in late fees totaling $16,319.04.
The appropriateness of more than $34,000 in purchase card expenditures could not be verified, auditors found. That included more than $10,600 in expenses from former City Manager Rebecca Niernberger, and more than $20,100 from former City Clerk Kathy Hammans, according to the report.
