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After audit of Parma last year discovered over $115K was misappropriated, follow-up report from Galloway says city is making progress on audit’s recommendations

  

Auditor’s Office assisting law enforcement as three former officials in Missouri Bootheel town, including the mayor and city clerk, face criminal charges

JEFFERSON CITY, Mo. — A report from State Auditor Nicole Galloway says progress is being made in the city of Parma after an audit last year discovered more than $115,000 was misappropriated through payroll overpayments and improper payments and purchases. The audit, which also found that meeting minutes and financial reports were falsified to conceal the misappropriations, led to criminal charges against the former mayor, former city clerk and former water supervisor of the small southeast Missouri town.

Because the audit gave a rating of “poor” — the lowest possible — the Auditor’s Office conducted a follow-up review to measure the progress the city has made.

“There was a serious betrayal of public trust in Parma, and it will take time and a great deal of effort to undo that,” Auditor Galloway said. “This follow-up report shows city officials are moving in the right direction to restore the trust of citizens in local government. I encourage them to continue their work, and my office’s Public Corruption and Fraud Division also will continue working with law enforcement officials as they pursue the criminal charges.”

The 2020 audit found that from April 14, 2015, through April 16, 2019, at least $115,582 was misappropriated from the city. The misappropriations included payroll overpayments and/or improper payments to the mayor, the city clerk, and to city officials and others who were related to the mayor or the city clerk. The mayor and city clerk made improper purchases using prepaid debit cards and the city’s Walmart credit card, including gift cards, appliances, furniture and electronic equipment.

The mayor and city clerk also falsified Board of Aldermen meeting minutes and financial reports. The city clerk falsified cash balances of some bank accounts on financial reports; most of the inaccurate financial reports prepared for the board were reviewed and signed by the mayor. The city clerk also did not timely file and remit various payroll taxes. As a result, the city was assessed over $114,000 in past due taxes, interest and penalties.

The follow-up report found that the Parma Board of Aldermen had implemented 12 of the audit’s 26 recommendations. Those included ensuring that account balances are properly funded and maintained, monitoring and reducing transfers between bank accounts, and ensuring the transfers are legal. The city is also refraining from entering into business transactions with relatives unless the transactions are properly bid.

Another 12 of the recommendations are in progress, including working with law enforcement officials on the criminal prosecution. The city is also working to ensure better oversight of city spending and accounting duties. The Board of Aldermen has partially implemented the other two recommendations.

A copy of the complete follow-up report can be found here.