The city of Dixon is suing its former auditor, Samuel Card of Sterling, for missing what federal authorities say was the misappropriation of millions of dollars by former Comptroller Rita Crundwell.
But could any auditing firm have flagged the problem?
Not likely, said representatives of Wipfli, the auditing firm that the city hired after Crundwell's arrest.
Matt Schueler and Dan Ribordy of Wipfli spoke to the Morrison City Council recently about that city's audit. The firm gave the city a clean bill of health – the usual result for nearly all public bodies.
The city let members of the audience ask the auditors questions.
I asked whether they could have caught a Crundwell-type situation with their Morrison audit.
They said it would be pretty hard to detect such a problem, saying no audit is designed to root out fraud.
That makes one wonder whether the city would prevail in its lawsuit against Card.
If the Wipfli auditors are right, what's a city to do?
While no system is completely foolproof, public bodies have ways to reduce the chances of large-scale fraud:
• Distribute responsibility over finances. No one person should have too much power, as was the case in Dixon. For instance, auditors recommend that more than one person should sign checks. Government watchdog groups suggest that public bodies create an environment where lower-ranking employees can air concerns.
• Post as much financial information as possible on the Internet, including budgets, bank statements, purchase orders, you name it. That allows more constituents to serve as watchdogs in the comfort of their homes. As we know in the newspaper business, the more eyes, the better. We catch more errors that way.
• Elect people with a knowledge of finances. No degrees are needed – just a comfort in reading financial statements and budgets. It helps to be a numbers person.
• Elected officials should serve as active watchdogs. Too often, our elected officials want to go along to get along. They avoid offending anyone. Sure, folks such as Lee County Board member John Ferrone, R-Dixon, anger some when they publicly question the budgets for departments such as the coroner, but that's their job. Do we really want them to be cheerleaders?
Sauk Valley Media reporter David Giuliani covers the Whiteside and Lee county governments, Morrison and other smaller communities. He can be reached at dgiuliani@saukvalley or at 800-798-4085, ext. 525.