A Cass County official, who was charged with a felony in May for allegedly claiming a false reimbursement, is facing more scrutiny after the Cass County Auditor’s Office identified “several problems” during a three-month review of an imprest account used by her office.
The imprest account in question was used by Melody A. Folsom, the county’s public administrator. An audit review reported multiple issues, including math errors and use of county funds to purchase gifts on behalf of wards and office supplies.
It also noted the county’s lack of policy addressing imprest accounts.
Folsom has served as Cass County’s public administrator since she was re-elected for a third term in August 2016. The job of the public administrator, as described on the county website, is to act as the court-appointed guardian or conservator for minors or people with mental or physical disabilities who don’t have anyone else willing or able to care for them.
In Missouri, county public administrators are elected officials, who serve four-year terms, and are appointed to wards or protectees by probate court.
In May, the Missouri Attorney General’s Office charged Folsom with receiving stolen property, a charge unrelated to the recent review of Folsom’s imprest account. The attorney general brought the charge after authorities were notified of potential misconduct in her office.
A sergeant with the Missouri State Highway Patrol wrote in a probable cause statement that Folsom allegedly ordered an employee to falsify a purchase order then claimed a false reimbursement from the county treasurer’s office in 2015. The ongoing criminal case was transferred to Jackson County in August.
Around that same time, the Cass County Auditor’s Office launched an audit review of the public administrator’s imprest account, about two months after an outside auditing firm reported that the account was “not being reconciled on a monthly basis to show cash on hand, amount owed from wards and amounts due from the county.”
Between August and November, the Cass County Auditor’s Office said it reviewed each monthly bank statement from 2016 and 2017 as well as a document titled “Client Purchases” prepared by Folsom’s office for those same time periods. The county’s chief deputy auditor met with Folsom on Nov. 7 to discuss the results of the audit review.
The Springfield-based accounting firm, KPM, noted in its annual audit of the county’s 2016 financial statements that the public administrator’s imprest account started with $2,500. However, the auditor’s office said in its review that it couldn’t verify this balance through county records.
The Cass County Democrat-Missourian obtained a copy of a memo from Cass County Auditor Ryan Wescoat to the Cass County Commission detailing the audit review.
As noted by Wescoat’s office, several departments, such as the sheriff’s office and county clerk’s office, use imprest accounts — accounts where “a fixed amount of money is placed for the purpose of making change or paying small disbursements when preparing a purchase voucher is not cost effective or the payment is time sensitive,” according to a memo from the auditor’s office.
The public administrator’s imprest account was used to make purchases for the county and her wards.
The Cass County auditor’s memo, which covered a two-year period, showed Folsom used the imprest account to purchase a variety of items and gifts for more than 100 wards living in different parts of the state. Records show transactions in bold that the auditor’s office said weren’t accurately or properly accounted for — including the purchase of movies, CDs, food, an FM antenna and coaxial cable, a television, gift cards, items from Bath & Body Works, fragrances, shipping costs, a PlayStation 4 game, a laptop, and bank overdraft charges. The auditor’s office said the two years’ worth of transactions it analyzed came from the county’s accounting system, entered by the public administrator’s staff.
Many transactions were marked generically as birthday and Christmas gifts and some also appeared inconsistent. A few debit and credit transactions that ranged from $7 to $180 were noted as “unknown.” Due to errors found in the public administrator’s records, the auditor’s office said some charges and deposits had to be corrected before the records were released in November.
“As frequently shown in the exhibit, there are amounts of charges and their corresponding return to the account which are not the same numbers,” the memo said. “Unfortunately, the documents submitted to the auditor’s office were so poorly prepared with inaccurate numbers that they could not be relied upon to assist with this memorandum.”
The auditor’s office also noted an “abundance” of office supplies purchased through the imprest account. The memo said office supply purchases are typically submitted through a countywide purchase order system.
“None of the purchases were of an emergency nature, so the use of the imprest account was not appropriate,” the memo said. “Especially when the PA’s office, after the use of the account, would submit a (purchase order) voucher to reimburse the imprest account.”
Folsom disputed the findings of the outside auditing firm and the Cass County auditor’s review Nov. 28 in a phone interview, describing the most recent memo by Wescoat’s office as “full of poor conclusions and errors.” The public administrator also said the account is for client purchases and office supplies, and was provided to her office by the county about five years ago.
“But remember, you’re talking about an auditor who has no auditing experience or accounting experience, and his report is almost fictitious,” Folsom said.
Wescoat rebutted by pointing to his educational background and previous experience in conducting county audits as well as the experience of the chief deputy auditor — Derek Moorhead, a local tax attorney — who helped handle the audit review.
“I think the experience speaks for itself,” Wescoat said, reiterating that the audit review was performed to comply with and satisfy the findings of the outside auditor, KPM.
While the report suggests that the public administrator’s office used the imprest account improperly, Folsom isn’t expected to face any additional charges.
As a result of the review, the auditor’s office said it’s proposing a new policy to the county commission, which addresses the use of county imprest accounts. It’s also suggesting the public administrator’s office be allowed to use an imprest account under certain conditions.
“The overall conclusion by this office is that the outside auditor found an issue that has not been addressed by the county,” the auditor’s office said. “Several departments possess imprest accounts, which normally contain less than $100. The PA’s account is unique in size and use, but its review has been absent.”
A complete copy of the Cass County auditor’s review of the public administrator’s imprest account is available online.
Folsom said the imprest account balance was at $1,925.69 as of Nov. 28 and that the office had some outstanding purchase orders for Christmas gifts. Folsom said she often uses the account to buy gifts for her wards “to make (their) lives as meaningful as possible because they have nobody.” The public administrator said the account is then reimbursed from individual wards’ accounts into what she calls the “client purchases” account.
Folsom responded to the auditor’s recommendations, citing a lack of communication between county offices.
“My response is these are people who have no clue what we do in my office,” Folsom said. “They don’t have a clue how busy I am, how many things I have to do, and all they’re doing is driving me to the point that, starting in 2018, there will be no birthday presents and no Christmas presents ever again. That’s what they’re driving me to.”
This wasn’t the first time the Cass County auditor’s office has looked into administrative activity in the public administrator’s office.
Records show that in September 2016, the auditor’s office reviewed transactions from a sub-account for travel, transportation, and indigent expenses. The review showed that the public administrator had used the account in 2016 to purchase gift cards and electronics for wards as well as tax preparation services from an outside accounting firm.
The account also used county funds to cover bank overdraft charges caused by the public administrator’s staff in balancing the wards’ accounts and to give money to wards on a monthly basis for their personal use.
At the time of the review, the auditor’s office also noted 24 ward accounts with outstanding balances due to the county.
In a rebuttal submitted to the county commission last year, Folsom shared similar criticism of statements made by the auditor’s office and defended her office’s use of the account.
“Prior to my serving as the public administrator, there were no documented procedures whereas I have created many,” Folsom wrote last year. “It is ironic that the office is run more professionally than ever before, which is why I do not believe this really has anything to do with receipts, procedures, or expenditures.”