Braman audit reveals lack of oversight; town clerk controlled "almost all" finances
Around the same time the Town of Braman's expenses got out of hand, one of the town's certificates of deposit was cashed in without the governing board's approval, and a lack of supervision over the former town clerk enabled her to have control over almost all aspects of the town's finances, including her own pay.
Those are some of the findings detailed in the town's 2017 – 2018 and 2018 – 2019 year-end audits, both of which were completed months after they were due.
After nearly a year of controversy over Braman's finances, the Braman Board of Trustees voted unanimously April 1 to send findings from those audits to Kay County District Attorney Brian Hermanson so that he may consider filing charges against former town clerk Sandra Barrows. Trustees alleged that Barrows misappropriated municipal funds, and independent auditor Kimberlye R. Mayer outlined some of the financial issues she discovered in a letter to board members.
The Journal-Tribune filed an open records request on April 8 for the letter from Mayer, who was appointed as the town's independent auditor in June 2019 after former mayor Marvin Allen Sandbek uncovered a number of financial irregularities. Mayer said that Barrows had control over the town's general ledger as well as the town's utility billing and payment systems. Mayer also found that utility payments were not reconciled with the town's accounting program, and reported that Barrows oversaw most of the town's accounting procedures.
Since Barrows took over as town clerk, expenses for her office have increased, the 2018 – 2019 budget summary shows. In the 2015 – 2016 fiscal year, trustees budgeted $34,846 for that office. That figure rose to $42,200 in 2016 – 2017, then to $51,977 in 2017 – 2018.
In 2018 – 2019, the total amount was $51,500. Of that, $40,000 was for personnel expenses. The town budgeted $10,000 for “Other Services and Charges,” $1,400 for office materials and supplies, and $100 for internet service.
Payment records for Barrows show where some of the money from the “Other Services and Charges” account went. On 10 different occasions, Mayer said, Barrows was paid for mowing and cleaning. The Journal-Tribune obtained an invoice dated March 26, 2019, showing that Barrows was paid $500 for cleaning the town's office. That money came from the “Other Services and Charges” account.
Mayer could not determine whether all of the checks Barrows received for mowing and cleaning were approved by the board. In six instances, Mayer could not find record of the board approving the checks. In four instances, she found that those checks were not put before the board. Mayer said Barrows prepared the lists of checks trustees were supposed to approve during meetings.
Those weren't the only payments called into question. Barrows' salary was increased without the approval of the town board, and town employees received Christmas bonuses in 2017 that were not recorded as part of their payroll, Mayer said. Mayer also reported that the town's payroll summary and payroll tax documents did not match during 2017.
Mayer said a lack of supervision over Barrows allowed for a misappropriation of funds.
“Because there was little to no oversight, this employee was in a position to manage all aspects of the utility billing process including billing, receiving, depositing and recording payments in both the utility program and the accounting program,” Mayer said. “The list of checks to be approved at the board meetings is also prepared by the same employee. The lack of oversight over the accounting and utility process enabled a misappropriation of the Town's funds.”
That lack of supervision contributed to another problem: Incorrect recordings of expenses. Mayer said she found “numerous” instances when expenditures were not correctly written down in the town's accounts payable account, which left municipal expenses “understated.”
“When invoices are entered into the accounts payable account, the expenditure is recorded in the expense accounts,” Mayer said. “There were numerous times that the invoices were not entered into the accounts payable, only the checks. These errors resulted in expenses being understated.”
In the same letter regarding the audits, Mayer said one of town's certificates of deposit was cashed in without the board's approval.
Other financial transactions never got the board's rubber-stamp. Mayer found that several purchases were made at Walmart with the town's credit card, but the amounts of the purchases were not accurately recorded. Some of the items “had no documentation as to a municipal purpose,” Mayer said.
In her audit of the town's 2017 – 2018 fiscal year, Mayer reportedly found duplicated financial transactions, voided and missing transactions, and other uncorrected financial errors totaling more than $10,000. She said those problems persisted in the next fiscal year.
The town's 2017 – 2018 audit should have been completed by June 30, 2018, but it wasn't finished until August 2019. The town's 2018 – 2019 audit wasn't approved by the board until April 1, 2020.
During the town board's April 24, 2019 meeting, then-trustee James Lunn said he believed Barrows was unable to provide correct information to the town's auditor in a timely manner. But it's unclear whether the town even legally had one. In their 2018 – 2019 budget summary, trustees budgeted no money for an auditor for the year. They budgeted $100 for the town's attorney for the entire year.
Lunn said he took some responsibility for not having completed the audits on time.
“I don't believe she didn't not provide certain information to auditors, I believe that she was not able to get all the required information out because of not having access to it within that office, or not having access to adjusted numbers,” Lunn said. “For one thing, she was not an accountant, OK? I take responsibility for some of this, too, because I should have been up here making sure that it was pushed through. That's basically all I have to say about that.”
In the past, Braman has established agreed upon procedures with an auditor instead of conducting full financial audits. By establishing those procedures, the town was able to choose which financial records an auditor would and would not examine.
Because the town's last two audits were not completed on time, the town lost out on grant money that officials hoped to use to rebuild a major waterline along Bender Rd. To be eligible for the grant, the town had to submit two completed financial audits to the Northern Oklahoma Development Authority, which oversaw the grant, Sandbek said during a June 2019 meeting. That's when he urged the town board to appoint Mayer as an independent auditor. But as the town struggled to complete those audits, the deadline for the grant passed.
Braman's finances have been a point of controversy since April 2019, when political newcomer Sandbek was elected to the board by a mere four votes, beating out longtime mayor Michael Barton. While voters in the town of roughly 200 residents do elect their trustees, it's up to the board to appoint one of its own members as mayor. Sandbek was appointed mayor in a heated April 16 meeting. Barrows walked out of the meeting and resigned the following day. The town's only other paid employee, the utility superintendent, retired May 6.
Sandbek said Barrows failed to turn over computer passwords and other financial information when she quit. Trustees were eventually able to regain access to that information, but they found that some financial records were missing, Sandbek alleged.
Sandbek resigned in August, saying in a public letter that he underestimated how severe the town's problems were.
The board appointed Lunn as the town's acting mayor after Sandbek resigned. Lunn still holds that office.
Barrows could not be reached for comment for this story.
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