More training, oversight in small towns

By The Gazette Editorial Board

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Everybody may know everybody in Iowa's smallest towns, but residents may not have a clue how the town's funds are being spent, or in a growing number of cases, misspent.

The number of small towns with populations under 700 where public funds have been embezzled for unlawful private uses is rising. Towns such as Stockton and Alburnett are typical, where tens of thousands of dollars were stolen over a period of years by a city official who is supposed to be minding the books.

Between 1995 and 2005, the state auditor's office conducted seven special audits to investigate missing small town funds. But since 2006, the state has conducted 32 such special audits.

Maybe it's the lousy economy. Or, it's possible folks are paying more attention and reporting problems. But the main culprits appear to be a combination of lax oversight and small-town trust.

In most small towns, a single official, usually a city clerk, is the only set of eyes watching municipal finances. Elected officials generally defer to the clerk's judgment. After all, many have been on the job for years. In Iowa, while larger towns are required to have periodic audits, towns with populations below 700 people have no audit requirement at all. Citizens or elected officials can request a review, if they see a problem. Too often, they don't.

So what can be done?

State Auditor Dave Vaudt has repeatedly asked the Legislature to place stricter audit or oversight limits on small towns. But we think new audit requirements are not the best idea, mainly because it would place a costly burden on communities with already very small budgets. Theft is a risk, but draining public resources to cover the cost of an annual state auditing mandate is a certainty.

Instead, we agree with an approach advocated by the Iowa League of Cities. The League says small-town elected officials should receive training on how to oversee municipal finances. Trained city councils and mayors should increase the number of people who monitor municipal finances, making it tougher to steal undetected.

Training would be a far less expensive way to improve oversight. And if one of those elected officials smelled trouble, they can still call in the auditor's office to take a look.

Elected officials in small towns should be more than passive rubber stamps when it comes to finances, even if they trust their clerk and the budgets they're approving aren't large. They should get training and get more involved in oversight.

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