Audit cites misspending by Coggon power plant superintendent
Fraud able to continue because of lack of oversight, report says
UPDATE: The longtime superintendent of a municipal power plant used its credit cards to buy gas for personal vehicles, tickets to rock concerts and items from companies selling pornography, pet medicine and a supplement for male erectile dysfunction, state auditors said Tuesday.
Superintendent William Edgerly and former secretary Deneen Mangas were able to misspend the plant's money for years because of a lack of oversight by its board of trustees, according to the report by State Auditor David Vaudt.
The report criticized the board for rehiring Edgerly last May with a 23.5 percent annual salary increase. Edgerly had resigned after 22 years on the job in December 2011, shortly after auditors launched a special investigation after finding irregularities during an audit sought by concerned citizens who petitioned for it.
The board was aware that auditors were scrutinizing Edgerly's spending when it rehired him for $65,000 per year, which was far more than what he'd earned months earlier, said deputy state auditor Tami Kusian. The board said the salary was set based on Edgerly's contention that he was previously underpaid compared to municipal plant officials in similar jobs, the report said.
"I'd say it's very unusual," Kusian said of Edgerly's rehiring with a raise during the audit. "In fact, I've never encountered a situation like this."
Coggon Mayor Pro Tem Dan Huber said Edgerly remained on the job as of Tuesday morning, but indicated that might not be for long. He said the city would take "immediate action" related to Edgerly's job and implement the audit's recommendations to improve oversight.
"I believe the whole community is probably troubled by the lack of oversight," Huber said of Coggon, a town of about 750 residents in Linn County, 30 miles north of Cedar Rapids.
Linn County Sheriff Brian Gardner said his office would continue its criminal investigation into the case, which will take time given the lengthy audit report. Any decision about whether to file charges will be made in consultation with the county attorney, he said.
The phone at the light plant, which supplies electricity to residents, rang unanswered Tuesday. Neither Edgerly nor Mangas had a listed home phone number.
Kusian said auditors worked with a Coggon gas station to obtain surveillance footage of a six-week period in 2011 that showed Edgerly using the plant's credit cards to fill up his vehicle and those of his son and girlfriend 8 times. She said she believes it's the first time gas station footage has been used by her office to help document misspending.
Auditors said their conservative estimate was that Edgerly spent about $20,000 improperly buying fuel for personal vehicles over several years. The audit identified another $13,000 of improper personal purchases and $30,000 in unauthorized vacation payouts to Edgerly and Mangas.
Edgerly bought tickets to concerts by the Who, the Scorpions and other entertainment events, records show. He also bought items from Askenzyte.com, which promotes a natural supplement for erectile dysfunction; Webcapades, an adult website; and 1-800-PETMEDS, the audit found.
The audit report said board members were aware of improper spending on the plant's credit cards but never took steps to stop it. Huber said the 5-member board currently has two vacancies that will soon be filled.