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Special State Audit Finds Improper Disbursements By Former Fire Officials

By Staff | Mar 23, 2010

A special investigation into the financial affairs of the Rodman Fire Department and Park and Recreation Department has uncovered several “improper and unsupported” disbursements, according to a release by Iowa State Auditor David A. Vaudt. The special audit, covering a period of time from Jan. 1, 2006 through Sept. 30, 2009, was requested by the City of Rodman as a result of concerns raised over the finances of the fire department.

According to Vaudt’s report, the City’s concerns came from checks being issued for cash and the purchases of fire equipment from a company, which employed the former Rodman Fire Chief, Paul Hunter. Additionally, concerns over the Park and Recreation Department’s disbursements were also raised. Those disbursements were overseen by Paul Hunter and his wife, Anita Hunter, who was also secretary/treasurer of the Rodman Fire Department.

 “The special investigation identified $5,006.67 of improper and unsupported disbursements,” Vaudt noted. “The improper disbursements of $4,687.80 include $713.98 of checks issued to cash, a $300 cash withdrawal, $2,510.23 of equipment and supplies purchased from Alex Air Apparatus, $159.32 of payments to other vendors and $1,004.27 of reimbursements to Mr. Hunter. Mr. Hunter was employed by Alex Air Apparatus at the time of the purchases.”

Vaudt went on to note that unsupported disbursement of $318.87 included $242.31 of reimbursements to Mr. Hunter, a $16.56 payment to Wal-Mart and a check payable to cash in the amount of $60.00

The audit report also noted that Paul Hunter obtained three grants to purchase equipment for the fire department and made those purchases without approval of the city council. Those three grants totaled some $116,119.77, with approximately 86 percent of those grant proceeds being used to purchase equipment from Hunter’s employer, Alex Air Apparatus.

“For the $108,072.54 of purchases the City made from Alex Air Apparatus, Mr. Hunter received $11,757,43 in commissions.” The report states, “Mr. Hunter deposited a $2,629,88 commission check to the Fire Department’s account, but withheld $429.88 from the check in cash. It is not known why he deposited his commission payment to the Fire Department’s account.”

Vaudt also reported that the Fire Department funds were used to purchase $318.39 of alcoholic beverages, which may not meet the test of public purpose. Vaudt also reported adequate records for receipts were not available to determine if all donations and fundraiser proceeds were properly deposited.

The actual investigation began on Sept. 9, 2009, when then-Mayor Georgia Elbert contacted the Iowa Department of Criminal Investigation regarding the concerns of the city, which included the issuance of checks for sums of cash from the Fire Department’s checking account and the purchases of fire equipment from Alex Air Apparatus. These transactions occurred during the period Mr. Hunter was the Rodman Fire Chief or Assistant Fire Chief, and Ms. Hunter was responsible for the Fire Department’s bank accounts.

In September 2009, Paul Hunter resigned his position with the Fire Department, and while her term did not expire until December 2009, Anita Hunter, who was a member of the Rodman City Council, stopped attending council meetings, according to the Mayor. On Sept. 21, 2009, Mayor Elbert requested the Auditor of State to conduct an investigation into the Rodman Fire Department and the Rodman Park and Recreation Department.

The state audit report reviewed the findings of the investigation by the audit team, which was headed by Melissa J. Knoll-Speer, Senior Auditor, and Annette K. Campbell, CPA, Director. The report made several recommendations to strengthen the city’s internal controls, including segregation of duties, reconciliation of bank statements by an independent person and establishment of formal accounting records to account for receipts and disbursements.

The state auditor’s report has been forwarded to the Palo Alto County Attorney’s Office, The Iowa Division of Criminal Investigation, Palo Alto County Sheriff’s Office and the Iowa Attorney General’s Office for further review. A full copy of the audit report is available for review by going to the Auditor of State’s website at: