To “State Audit”, or not to “State Audit”

That is the question.

During five of the six years Corey Hendrickson spent as Willard’s mayor, he was also quietly stealing the monies and identities of 500 employees of Prime, Inc. By the time police officers removed Mr. Hendrickson under suspicion of theft from Prime’s sprawling facility in Springfield on September 14, 2021, he’d stolen nearly $300,000, taken through more than 1000 separate small transactions.

Sixteen months later, in February 2023, the Springfield Police Department handed the case over to the United States Secret Service in the hope that federal prosecutors would be able to successfully charge Mr. Hendrickson for crimes committed against his “army of victims”.

But during those six years, beginning with his election in April 2015 to the end of his third term in April 2021, Hendrickson, as mayor (and later for an additional year and a half as alderman beginning in April 2022) was considered by many residents to be Willard’s most valued and respected elected official. Even around Prime’s facilities, Corey came to be known by many employees as simply “the Mayor”.

And for nearly nine years, everything in Willard appeared to be okay until, on October 24, 2023, a blinding flash of federal charges against Mr. Hendrickson made it glaringly apparent that it was not.

After the recent revelations, many residents are asking whether Mr. Hendrickson’s ill-gotten gains were limited to his employer, or whether they extended to his position as mayor as well. I don’t know the answer to that. And while I understand the limited access a mayor typically has to city funds, if I were a resident of Willard, I would certainly be asking that question, too.

Despite safeguards to prevent municipal embezzlement, a simple Google search demonstrates that Missouri mayors have been convicted of stealing from city funds on numerous occasions. For just a few examples, see here, here, and here.

What it would take to initiate a state audit

Per their website, the Missouri State Auditor is an “independent watchdog agency” working “to ensure the proper use of public funds and to improve the efficiency and effectiveness of Missouri government by performing audits[.]”

The City of Willard already has its financial statements audited annually by an independent certified public accountant. In recent years, audits have been performed by KPM CPAs & Advisors. On October 23rd, the Board voted to accept a bid from the CPA firm Decker & DeGood for auditing services.

Granted, auditing services performed by a CPA differ in scope from those conducted by the state auditor’s office. For example, a CPA firm, unlike the state auditor, only looks at a city’s financial health, whereas the state auditor also investigates compliance with Sunshine Law and state statute.

To see examples of how the Missouri State Auditor has exposed corruption in political subdivisions around the state, please see this article and this article from The Kansas City Star.

A state audit can be initiated in one of the following three ways, listed by order of difficulty:

#1 - Willard’s Board of Aldermen could request an audit

The simplest way to initiate a state audit is for the Board of Aldermen to request one from the Missouri State Auditor.

If you feel recent events have made it necessary to pursue a state audit, you should email your Ward representatives using the following contact information. To determine which Ward you live in, please see here.

For Ward 1:

Alderwoman Casey Biellier - cmbiellier@gmail.com

Alderman Troy Smith - tsmith@cityofwillard.org

For Ward 2:

Alderman David Keene - dkeene@cityofwillard.org

Alderwoman Joyce Lancaster - jlancaster@cityofwillard.org*

*per Joyce, this email has yet to be activated

For Ward 3:

Alderman Landon Hall - lhall@cityofwillard.org

Alderman Scott Swatosh - sswatosh@cityofwillard.org

#2 - The State Auditor may eventually be able to initiate an audit themselves

In the spring, the Missouri Legislature considered a bill that would have allowed the Missouri State Auditor to initiate an audit without a petition from citizens. Per the Kansas City Star, that legislation didn’t pass before the end of the session.

However, a resident who spoke directly with the Missouri State Auditor’s office reports that the auditor can use bank records to conduct “a preliminary investigation to determine if there is potential for fraud.” If potential fraud is found, “the state auditor will write to the [Board of Aldermen] and recommend they pass a resolution to request an audit.”

On October 31st, the above resident filed a Sunshine Request with the City of Willard, asking that bank records be submitted to the Missouri State Auditor:

#3 - Willard citizens could petition for an audit

If the Board of Aldermen doesn’t agree to a state audit, the last resort is for citizens to use the petition process to initiate an audit on their own.

The number of signatures required to initiate an audit is based on a percentage of Willard voters who cast ballots in the last gubernatorial election—15% to be exact. According to the Greene County Clerk’s office, 2567 Willard voters cast ballots for governor in 2020. 15% of that total would mean that the signatures of 386 registered voters living within the city limits of Willard would be required to automatically trigger a state audit. It’s also prudent to have extra signatures to ensure against any signers that are later disqualified.

For Willard residents, that process would work like this:

• A petition would need to be requested from the Missouri State Auditor here. The requestor isn’t required to be a resident of Willard.

• After the petition is requested, the chief petitioner (defined below) has one year to provide the auditor’s office with the required number of signatures plus extras.

• Those who gather signatures are not required to be Willard residents.

• The individual who submits the petition must live or own property within the city limits of Willard. This individual is know as the “chief petitioner.” Their name becomes public record.

• After the petition is submitted, the Missouri State Auditor’s office works with the Greene County Clerk’s office to verify the eligibility of the signatories. Given the required number of signatures are found to be valid, the petition is added to the list of upcoming audits for future scheduling, but it is often several months before the audit can be scheduled.

• For additional information and an FAQ, please visit the State Auditor’s website here.

Note: The above steps borrow from the reporting of The Kansas City Star.

A state audit is a major pain for city staff, and it wouldn’t come cheap

First, a state audit is embarrassing. In the mind of the public, there is always a stench attached to a state audit, a stench that would pervade City Hall and reflect negatively on staff—and that’s simply not fair. After all, it isn’t their fault that a long-time elected official committed crimes against his outside employer.

Second, ongoing staffing vacancies have likely stretched city staff to the limit as it is. Having to participate in a state audit would induce even more strain. Granted, an audit wouldn’t occur right away, but it would still be an additional burden even once those positions are filled. To use a retail reference, if you’ve ever had to conduct an hours-long overnight inventory, imagine scheduling that inventory during business hours, and then having to complete it while also serving the public and performing your regular duties as well. And then imagine doing it every day for a couple of weeks.

Third, read the valid points made below by an anonymous participant in a post to the new Facebook group City of Willard-Citizen Group. Given the specificity of the recommendations, I would assume the anonymous poster is some past or present member of city staff, perhaps themselves concerned by the objections I raised above.

The poster is correct. A state audit is expensive. Costs vary depending on the size and scope of the entity and the audit, but the cost could be substantial, and the City would be required to bear all of it.

As examples, the 2022 state audit of the City of Belton, pop. 23,116, was expected to exceed $100,000. The 2022 state audit of the City of Town and Country, pop. 11,640, was estimated to cost between $100-$130k. The 2018 state audit of Seymour, pop. 1921, was estimated between $30,000 and $50,000. Though I did not check the final price tags, based on the estimates above, a state audit of the City of Willard would not come cheap.

However, the funds managed by the City Of Willard come from and belong to the taxpayers within its boundaries and beyond. Under the circumstances, it’s understandable that taxpayers would like someone to step in from the state level—even despite the expense—to verify that Mr. Hendrickson’s illegal activities were limited to only his employer, and to clear the air back to some semblance of normalcy.

What might a state audit look at

Per the Missouri State Auditor’s website, “The scope of the audit is partially based on information provided, including concerns from the chief petitioner and citizens.”

The objectives of an audit might include:

• Evaluating the city's internal controls over significant management and financial functions.

• Evaluating the city's compliance with certain legal provisions.

• Evaluate the economy and efficiency of certain management practices and operations, including certain financial transactions.

Per the 2010 audit report (see below), the audit might include “reviewing minutes of meetings, written policies and procedures, financial records, and other pertinent documents; interviewing various personnel of the city, as well as certain external parties; and testing selected transactions.”

The 2010 state audit

The most recent state audit of the City of Willard was performed in December 2010 under former state auditor Susan Montee. It was initiated via petition, but I did not Sunshine the identity of the chief petitioner. The summary is on pages 2-3 here.

Some of what the 2010 audit found:

• Sunshine Law violations, including inadequate open and closed session meeting minutes and discussing business in closed session that should have been discussed in open session

• The Park Fund was in poor financial condition, primarily due to decisions made during financing of the pool

• Inaccurate accounting records and poor budgeting procedures, including the issuing of $81,000 of insufficient checks and failing to submit required annual financial reports to the State Auditor’s office

• A failure to advertise or solicit bids for numerous purchases

• Significant weaknesses in control procedures related to utility system funds

• The mayor occasionally waiving water and sewer fees, and instances where utility service for the mayor and the mayor’s mother were not disconnected when their payments were delinquent

Conclusion

In the space of less than three weeks, Willard residents have watched their former long-time mayor resign his aldermanship on the pathway to prison. They’ve watched their most recent former mayor, a mere two days later, resign hours before his impeachment hearing, declaring that he will run again in April.

Those resignations have dramatically shuffled Willard’s elected government, where now all but one of its six aldermen have less than six months of experience (two have less than a week). The City still does not have a permanent city administrator; it has no planning and zoning director. An election looms less than five months away. And the Board is in the middle of its time-intensive annual budgeting process.

Needless to say, all of the above has compounded and left in its wake a great deal of turmoil that I’m sure is difficult to deal with, and difficult to watch.

Would a state audit make things better? Or would it make things worse?

Is a state audit even necessary? Or, under the circumstances, would it be completely irresponsible not to have one?

I can only tell you this:

I’m glad I’m not on the Board of Aldermen, stuck with having to decide the answers.