State releases audit of city of Fairfield

FAIRFIELD - The State Auditor of Iowa released its audit of the city of Fairfield on Feb. 25.

The audit covers the fiscal year ending June 30, 2019. It contained a host recommended improvements to bookkeeping, disbursements and how the budget is handled. Fairfield City Administrator Aaron Kooiker said the recommendations were routine – the sort the state gives the city every year – and that the city will comply with them to the best of its ability.

For some of the state's recommendations, Kooiker said he disagreed with the auditor's assessment about the propriety of certain disbursements. For instance, the audit called into question the appropriateness of spending public money on an employee holiday party totaling almost $1,700. Auditor Rob Sand's report states that the city should document how this spending serves a 'public purpose” before authorizing any further payments.

The city has updated its public purpose statement to cover holiday parties. However, the state was not fully satisfied with it.

'While the city has adopted a policy, the policy does not clearly document how the public benefits from such disbursements,” the audit states. 'The city should document the public benefit prior to authorizing further payments.”

Kooiker said he understands the state's position, but he and other Fairfield officials see nothing wrong in throwing a holiday party for the city's employees.

'We've done an employee recognition lunch ever year for a number of years,” he said. 'Part of the public benefit is having good employee morale. Our intent is to recognize employees for doing a good job.”

The Union asked Kooiker what happens when the state and city disagree on the propriety of a disbursement. In theory, if the state felt the violation was serious enough, it could withhold property tax money from the city. But it doesn't appear that this holiday party or any other suggested changes are serious enough to warrant that.

'Nothing in the audit is a serious thing. None of this is scandalous,” Kooiker said. 'If the state were going to withhold money, you'd see the state auditor come to the city, and I've never seen that happen.”

The audit also touched on a couple of disbursements that could be considered a conflict of interest, because they involve the city doing business with a contractor who is also a city employee or related to a city employee. The two cases mentioned in the audit were the city's hiring of Mark Brown to perform about $10,000 worth of tree trimming, when he is also an employee of the fire department; and the other where the city hired Estle Construction to perform a $12,000 repair, when the wife of the contractor is city employee Denise Estle.

The audit stated, 'Transactions with Brown Tree Service do not appear to represent a conflict of interest since they were entered into through competitive bidding in accordance with Chapter 362.5(3)(d) of the Code of Iowa. Recommendation; the City should consult legal counsel regarding the transaction with Estle Construction.”

Kooiker said he didn't see a conflict of interest in either case. He said the city hires the best people for the job, and in a city the size of Fairfield, at least somebody is going to be related to a city staffer.

'We'll continue to do business to make sure things get done in a timely fashion with whomever we can work with,” he said. 'A lot of small towns run into this. We can't refrain from doing business just because [the contractor] is related to somebody.”

The audit asked the city to amend its budget during the year if it was going to have a cost overrun on a particular item. Kooiker said the city will amend its budget twice a year if needed to ensure its complying with this request. Another recommendation was to segregate money-handling duties more, so that the person who makes a purchase is different from the person who reviews and approves it. Kooiker said the city tries to segregate duties as much as possible, but it's difficult given staffing limitations to segregate the duties as much as the auditor wants.