Former Eldridge City Clerk Denise Benson used more than $76,000 of city funds for personal purchases over the course of six years, an investigation by the state Auditor's Office found.
Released Thursday, the report found Benson charged more than $40,000 worth of personal purchases to the city's credit cards between 2017 and 2022, buying items such as a seven-piece wild horses queen bed comforter set, a karaoke machine, women's swimwear, horse brushes and hemp gummies.
During that time, another $16,500 of city funds was paid to Benson's personal credit card bill, an additional $16,000 paid other vendors via check or online payment and about $1,100 in unauthorized payroll was issued to Benson, the investigation showed.
The Auditor's Office also found $8,700 of "unsupported disbursements" made from the city's credit cards and checking account, and the office said it couldn't determine whether that money was used for city operations or Benson's personal use because of a lack of "adequate documentation."
People are also reading…
Copies of the report were filed with the Scott County Sheriff's Office, Iowa Division of Criminal Investigation, the Scott County Attorney's Office and the Attorney General's Office, according to the report.
Dan Furlong, a lieutenant with the Scott County Sheriff's Office, wrote in an email that the office is investigating Benson "based off a financial crime."
State and federal court records indicate no charges have been filed as of Thursday, and County Attorney Kelly Cunningham said the office is not involved at this stage.
'A lack of appropriate oversight'
The city did not follow recommendations from a March 2022 report, Auditor Rob Sand wrote in the report, which "included recommendations to segregate duties, reconcile ending cash and investments, and implement a purchasing policy."
A "lack of appropriate oversight and the failure to ensure implementation of adequate internal controls permitted an employee to exercise too much control over the operations of the city," the report found.
Eldridge city officials requested the special investigation after then-City Administrator Tony Rupe discovered inconsistencies in the city's credit card bills. City officials put Benson on leave in early October, and the City Council voted to fire her a few weeks later.
Benson was hired first as the city's billing clerk in May 1992, according to the investigation, and was promoted to city clerk in January 2003. As city clerk, Benson was responsible for making certain purchases and keeping records of the city's bank accounts, disbursements and credit cards, as well as preparing City Council meeting minutes and financial reports, including monthly bank reconciliation.
Benson, as city clerk, would receive bills, invoices and credit card statements for the city. Those were supposed to be included in the monthly bill listing for City Council approval.
However, Benson would toss out the mailed credit card statements and instead print statements from the city's online portal without her own credit card transactions on the printout provided to the council, according to city officials cited in the report.
According to the report, an unnamed city official questioned Benson about credit card charges not reported to the City Council that appeared to be for personal items. She replied that she "used the wrong card and was going to pay the city back," the report stated.
On Oct. 3, a city official asked Benson again about her use of the city's credit card, according to the report. Benson "stated she did not have a personal credit card and was using the city's credit card but was reimbursing the city for all personal purchases," according to the investigation.
City officials asked Benson for documentation of the reimbursements, but none was provided, and the city official was unable to find any reimbursements issued to the city, according to the report.
The next day, Benson was placed on administrative leave, and the City Council fired her Oct. 26.
What was purchased?
Improper Amazon purchases alone made by Benson totaled $27,639 over close to six years, according to the report. Those included clothing, beauty products, games for children, dog and horse products, such as Corona Ointment for Horses and Tough-1 Nylon Draft Halter, according to the report.
Although Benson said she reimbursed the city for those purchases, the Auditor's Office reviewed Benson's bank accounts and city records and was "unable to locate any instances where Ms. Benson reimbursed the city for personal purchases."
Benson also bought blinds, canvas prints, boat bunk boards, sports gear, equine supplies and garden stones using PayPal, charging the city close to $1,900 between 2017 and 2022.
Benson also used the city's credit card for about $1,000 worth of purchases from Menards and gas stations unrelated to city business.
Another 33 purchases on the city's credit cards at restaurants, retail stores and online vendors, including Kohls, Duluth Trading Co. and restaurants, totaled $11,600.
Another 19 electronic payments to non-city credit cards and bank accounts from the city's coffers totaled $32,648.
Benson, who had control over the payroll, also overpaid herself by about $1,100, the report found. Benson recorded 30 hours for a Committee of the Whole meeting, which, according to city officials should have been one hour only.
Eldridge 'did not provide sufficient oversight'
The Auditor's Office was critical of the city for not keeping careful watch over financial transactions.
Benson had control over receipts, purchases, utility billing, payroll, cash, bank accounts and reporting, which provided few opportunities to identify irregularities or errors.
The report found the city failed to compare the bill listings to supporting documentation and checks, require original, itemized receipts for all disbursements, properly review payroll before paying employees, review bank and credit card statements, and request and review all bank reconciliations.
Echoing recommendations from the March 2022 audit, the investigation recommended for Eldridge to separate financial duties to avoid one person having control over the city's transactions.
The Auditor's Office acknowledged "segregation of duties is difficult with a limited number of staff." However, the duties Benson handled "should be segregated between other city employees."
"In addition, the mayor, City Council members, and city administrator should review financial records, perform reconciliations and examine supporting documentation for accounting records on a periodic basis."
The Office also emphasized bank statements should be reviewed by an official who doesn't collect or disburse City funds and include the date of the review and the person's signature.
Eldridge also doesn't have a policy in place for credit card transactions, the Auditor's Office found, and it recommended that the city should make sure purchases are supported by receipts and invoices.
Eldridge Mayor Frank King said he was shocked to see the number of items Benson purchased after signing an agreement in 2018 that if she used the city's credit card for personal use, "it will be grounds for immediate termination."
"She did all of this and was trusted by the employees and citizens," King said. "She signed that agreement and did all these credit card purchases knowing that she signed that form."
Council members knew little about the details of the city's credit card transactions. It was just before the city discovered Benson's purchases that council members learned city employees had individual credit cards, King said.
After Benson's purchases were discovered, King said, the council now includes an itemized credit card statement in council packets, rather than just a sum total. Department heads also now authorize credit card purchases city employees make, he said.
King added that the council recently hired a new city administrator, Nevada Lemke, and is in the process of hiring a new city clerk to replace Benson. With the new staff, King said, the city would develop more robust systems to keep the city finances accountable.
"Policies have changed and there now is double- and triple-checking done," King said.
Read the report here: