SBOA Audit Report Findings For LMU & The City Of Lawrenceburg

Thursday, March 26th, 2020 7:32am

By City of Lawrenceburg, press release

As a result of the SBOA’s findings, the City has already taken significant measures and is continuing to implement corrective actions.

(Lawrenceburg, Ind.) - The Indiana State Board of Accounts (“SBOA”), with the cooperation of City officials and at the City’s request, recently completed its audit of Lawrenceburg Municipal Utilities (“LMU”) and the City of Lawrenceburg. The audit analyzed LMU’s finances for the years 2017 and 2018. The SBOA has now published its findings in a report that can be found at www.in.gov/sboa.

The SBOA documented several improprieties including: the LMU director signing contracts without approval or delegation of authority; failure to report the income and expenses of LMU’s fiber optic fund; failure to document a loan from the electric utility to LMU’s fiber optic project; lack of proper documentation of Whiskey City Rodeo ticket and merchandise sales; poor internal controls over the financial reporting for the LMU fiber optic fund and Whiskey City Rodeo; offering employees payroll deductions for certain items without a written policy in place; the LMU director submitting reimbursements without adequate supporting documentation; issues regarding the use of the LMU director’s credit card; failure of the LMU director to keep timesheets for hours worked; instances of nepotism by the LMU director; over and under-billing by LMU; LMU operating the Whiskey City Rodeo without statutory authority; and LMU operating the Whiskey City Rodeo at a loss which was then effectively passed on to rate payers.

The City is thankful for the SBOA’s diligent work in documenting these improprieties— some of which were the basis for the City requesting the SBOA audit. As a result of the SBOA’s findings, the City has already taken significant measures and is continuing to implement corrective actions.

The Utility Service Board terminated LMU superintendent Olin Clawson on January 2nd, 2020, before the SBOA shared its findings.

In response to the audit findings of the Indiana State Board of Accounts, the City has taken and will continue to take significant measures of corrective action. Some of the corrective measures to date include:

  • Formally demanding LMU deliver records of all financial transactions and employee records to the Clerk-Treasurer and amending Lawrenceburg’s AFRs for 2017 and 2018 in Gateway
  • Creating a written policy for payroll deductions
  • Cancelling the Whiskey City Rodeo
  • Removing the fiber optic project from LMU jurisdiction
  • Ordering LMU to immediately stop spending rate funds on the fiber project
  • Ordering LMU to immediately stop spending rate funds on the Whiskey City Rodeo
  • Discharging employees hired in violation of nepotism law
  • Drafting legislation to limit the contracting and spending authority of the utility director
  • Revising the LMU charter and legislative structure, focusing on finances, management, and internal controls
  • Initiating collection of under-billed accounts

The City of Lawrenceburg will continue to work independently and with SBOA and all appropriate agencies to remedy the improprieties the SBOA documented. To the fullest extent possible under the law, the City is committed to seeking recovery of improperly spent funds and to ensuring that anyone found to have engaged in wrongdoing or misuse of funds is held accountable.

LMU Audit

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