OKLAHOMA CITY (KFOR) – On Tuesday, Oklahoma State Auditor and Inspector (SA&I) Cindy Byrd released an audit report for the city of Lindsay after District Attorney Greg Mashburn requested an investigation.

According to Byrd’s investigation, the time frame for city financial records investigated was from July 1, 2019 to June 30, 2022. The SA&I audit concluded significant mismanagement and failure to oversee expenditures by Lindsay City Council members.

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“The warning signs were there, but no one was looking,” Auditor Byrd said. “Lindsay’s elected leaders have a legal duty to oversee the city’s finances. Instead, the city’s financial mismanagement was exacerbated by inefficient management that failed to keep records.
and supervise the functions of the city. As a result, Lindsay taxpayers were hit with hundreds of thousands of dollars.”

Here’s the breakdown of the problematic findings released by Auditor Byrd:

Utilities

• The city underbilled commercial customers by about $1.5 million. The city expects to recover about 45 percent ($676,000) of that amount.

• Failures to process utility rate increases and collect late fees resulted in approximately $152,460 in lost revenue.

• Two city employees and two City Council members received utility service, although they did not make payments for periods ranging from four to eight months.

Sales tax

• Sales tax allocated to the Lindsay Public Works Authority (LPWA) in the amount of $493,990.16 was improperly withheld in the General Fund bank account and was not used for LPWA restricted purposes as required by law.

Expenses

• Credit card spending in excess of $223,000 per year, much without purchase orders, occurred without board approval or oversight.

• Eight invoices from the Grand River Dam Authority (GRDA) were paid late, some due to insufficient funds, resulting in late fees totaling $16,319.04.

• Due to missing records, the accuracy of $34,488.83 in tested acquisition card spending could not be verified.

• Lindsay City Manager Rebecca Niernberger made improper fuel purchases totaling $531.14 and questionable food purchases totaling $1,789.85. She also improperly obtained $727 worth of fuel for her personal vehicle. The city had no records supporting $10,651.87 of Niernberger’s purchase card expenses.

• The city also had no records to support $20,156.49 in acquisition card spending from Lindsay City Clerk Kathy Hammans.

audits

• The city’s financial audits were not completed within the time required by law. Two audits were submitted more than a year late.

• The lack of timely audits prevented the Council from assessing the city’s financial condition and prevented the city from applying for grant funds.

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Auditor Byrd concluded the audit indicating that the City of Lindsay is now moving toward a brighter future.

“Although we found countless examples of poor oversight, poor management and poor decision making, we classified less than two thousand dollars in expenses as fraudulent,” Auditor Byrd said. “On a very good note, the city of Lindsay is working to address the issues we uncovered and appears to have turned the corner financially. The city has caught up on its audits and is now fully eligible to apply for grant money.”

Read the full audit Here.

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