Missouri auditor finds $160K missing from Dunklin County Sewer District

(The Center Square) – More than $160,000 went missing or was misappropriated from a sewer district in southeast Missouri and its board president violated the state constitution by hiring his wife as a bookkeeper, according to a state audit.

A 58-page report by Republican Missouri Auditor Scott Fitzpatrick gave the Dunklin County Sewer District a rating of “poor,” the lowest possible, in an audit released on Tuesday. The rating states the entity needs to significantly improve operations. The rating also means many findings require management’s immediate attention.

“This is a clear and egregious violation of the public’s trust as taxpayer dollars were mismanaged by the individuals who were entrusted with the responsibility of overseeing the operation of the sewer district,” Fitzpatrick said in a statement. “My office will continue to work with law enforcement to ensure justice is served. I want to thank the City of Malden for allowing us to conduct the audit and for working to restore public trust in the district by taking the recommended steps to ensure proper oversight and protection of taxpayer dollars.”

Malden requested the audit and Fitzpatrick recommended the city continue to work with law enforcement regarding criminal prosecution of the missing and misappropriated funds.

Dunklin County has a population of 27,406 in its 541 square miles, according to the U.S. Census Bureau.

The audit found the husband-and-wife team of Korey and Jennifer Adams mismanaged the sewer district for years.

At least $62,579 was found to be missing or misappropriated from the district and an additional amount of $98,096 was found missing between Jan. 1, 2017 and March 5, 2021, according to the audit. Payroll overpayments of $54,049 were made to the bookkeeper, unsupported payments of $4,567 were made to the board president and bookkeeper and $3,063 in sewer services weren’t paid by the president and bookkeeper.

An estimated $98,096 in sewer security deposits and sewer receipts weren’t deposited by the bookkeeper. A review of personal bank accounts of Adams and his wife found cash deposits of $29,146.

The 35th Judicial Circuit placed the sewer district in receivership and named Malden as the receiver on March 5, 2021. During that month, the auditor received concerns about the sewer district from its whistleblower hotline.

The Missouri Constitution states any public official who “names or appoints to public office or employment any relative within the fourth degree” shall forfeit their office. The constitution also states discussions and decisions concerning situations of potential nepotism should be completely documented to reassure the public of no improper benefits. State law mandates no elected official shall favorably act on any matter designed to provide a special monetary benefit to the official or their spouse.

The sewer district reorganized in 2012 to be governed by a five-member board of trustees. However, two board vacancies weren’t filled from Jan. 1, 2017, to November 2020 and the three remaining members acted as the decision making body.

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