State needs better system to detect fraud

Unfortunately, their actions don’t measure up to their words.

The city of Dixon is in the midst of a financial scandal caused by the failure of its oversight system to detect fraud – the “misappropriation” of $30 million over 6 years, according to an investigator with the FBI.

Rita Crundwell, who was fired Monday as city comptroller after her arrest last week on a federal wire fraud charge, is suspected of perpetrating the theft.

Illinois city governments rely on private CPA firms that are paid to conduct audits of spending. State government accepts that system. In Dixon’s case, it didn’t work.

How many more “Dixons” are out there – units of government with lax checks and balances where money handlers can make off with the taxpayers’ money?

We may never know.

The situation cries out for a new and better system – a statewide system – to root out fraud and waste in the spending of public money.

Indiana has such a system.

The State Board of Accounts conducts audits of cities, as well as towns, counties, schools, townships, libraries, universities and other entities.

Consider its mission statement, as posted on its website:

“… [T]o impart to the citizens of the State of Indiana complete confidence in the integrity and financial accountability of state and local governments; to ensure that these institutions are operating efficiently in compliance with applicable statutes.”

The State Board of Accounts employs certified public accountants who conduct audits every year for municipalities with populations larger than 5,000, and every other year for smaller communities.

Those auditors enjoy much greater independence from the municipalities they audit, and greater authority to dig deeply, than do private auditing firms in Illinois.

The audits are posted online for all to see.

The State Board of Accounts also is required to conduct annual training for city financial officers.

With a system like that, a Dixon-style case of financial fraud would be much harder, if not impossible, to perpetrate.

Dixon residents are not the only people in this state who would like to have “complete confidence in the integrity and financial accountability” of city government – or any unit of local government, for that matter.