state audit
Pauls Valley's city government is under audit after citizens requested the state look into its finances. (Wikipedia)

A special audit of the City of Pauls Valley will take about six months to complete and could cost the city government thousands of dollars, State Auditor Cindy Byrd said.

The audit comes after a successful petition drive in the town collected signatures from 374 residents requesting an audit to determine if sales tax revenue has been used for its designated purposes. Of the signatures submitted, 317 were determined to be valid, enough to trigger the audit.

The petition effort stemmed from questions about the circumstances behind the closing of the Pauls Valley Regional Medical Center in 2018. A group of citizens has claimed that the closure was caused by irregular financial activity and that former hospital employees are still owed money.

The petition asks auditors to determine if financing arrangements have been properly managed and to review documents related to the city’s hospital and ambulance service. Reviews of payments to certain personnel and the city’s relationship with nursing home facilities across the state have also been requested.

A lengthy process

Byrd said the state audit, which will be funded by the City of Pauls Valley, could cost as much as $50,000 but that the total could increase. She said the cost is in line with similar audits of this type.

“That’s about what we expect it to cost based on audits we have done in the past,” Byrd said. “Obviously that total can change depending on what is required to complete the audit.”

Investigators aren’t expected to begin reviewing documents until next year. Byrd said the audit will likely take about six months to complete.

Oklahoma law allows for citizens to request an audit by collecting signatures from 10 percent of registered voters in any subdivision of the state.

There are currently nine petition audits underway or pending in Oklahoma, including the towns of Bennington, Calvin, Ochelata, the Marshall Fire Department, and the cities of Holdenville, Henryetta and Alva. Patrons of Talihina Public Schools have also successfully circulated a petition for an audit.

“We have quite a big backlog already, so we have people constantly working,” Byrd said. “If they’re waiting on documents from one audit they are working on another. It is a continuous process. This is a very thorough process that takes time to complete.”

Byrd said when the audit is completed it will be released to the public.

City manager welcomes audit

Pauls Valley City Manager James Frizell said he believes the audit will show there was no wrongdoing by city government and said the probe is the result of efforts by a vocal minority of citizens.

“While paying up to $80,000, as estimated by the audit petition, will certainly work a hardship on the local government, we are confident in the ultimate findings of the audit and are hopeful that the outcome may finally put to rest the misconceptions, misunderstandings, half-truths and outright lies which have been spread regarding so many aspects of our local government,” Frizell said in a statement to NonDoc. “Therefore, we welcome the audit as the desires of 10 percent of our registered voters, and will fully cooperate in all respects with the State Auditor and Inspector’s office.”

Frizell told citizens at a public meeting in November that utility rates could increase as a result of the audit.

“It could affect our water rates,” he said at the meeting. “The money would need to come from somewhere.”

Past audits have made headlines

During the previous fiscal year, Byrd’s forensic audit division identified more than a million dollars in misspent or embezzled funds.

In 2017, one notable audit found that the city clerk of Hartshorne, a town of about 2,500 in Pittsburg County, had made about $80,000 in purchases on a municipal credit card, using it to pay for a trip to Mexico, handbags and tickets to sporting events over a three-year period.

Auditors also found $1.7 million in missing utility payments that they said the city treasurer misappropriated.

The city’s treasurer later retired and its mayor resigned in the wake of the controversy.