City of Oran water rates violate state law, auditors find; report details financial-management problems

The city of Oran, Missouri, violated state law by improperly raising water rates more than four years ago, resulting in more than $35,000 in overcharges from July 2013 to May 2015, an auditor has found.

A December report to the board of aldermen by certified public accountant Wilfred Bucher of Sikeston, Missouri, detailed the violation.

Bucher recently completed an audit of the city�s finances for the fiscal year ending March 31, 2013, which disclosed a number of financial-management problems.

The Southeast Missourian obtained a copy of the audit report through a Sunshine Law request. The document was presented to the board of aldermen last month.

In that document, Bucher wrote the water-rate violation was discovered in October while �field work� was being done for an audit for the fiscal year ending March 31, 2014. The complete 2014 audit has not been presented to the board.

According to the report, the city �didn�t have a properly signed ordinance raising the water rates,� making the measure void.

The auditor said the issue was discussed with the city attorney and city representatives last year after the problem was uncovered.

�The next legally binding ordinance raising water rates wasn�t passed until May 2015, going into effect June 2015,� the report stated.

The report added the city has filed an insurance claim under an �errors and omissions� policy to cover the amount the city overcharged its customers.

Former city clerk Debra Phillips said Friday if the city receives the insurance money, it could use that amount to refund excess charges to its water customers.

But Phillips said city officials have not notified water users about the issue or any possible refunds.

Oran Mayor Gary Senciboy and city clerk Tom Urhahn declined to discuss the water overcharges or whether refunds would be issued, referring all questions to city attorney Amanda Oesch.

Oesch said in an email Friday the �city does not have answers to those questions at this time.� She added �the city is still investigating the matter and further information will be provided once the city knows more.�

Urhahn was Oran�s mayor when the overcharges began. Senciboy was elected mayor in April 2014 and a month later Urhahn was hired as city clerk, replacing Phillips.

�I had an opportunity to hire the former mayor as my city clerk, and I would have been a fool to have not done it,� Senciboy told the Southeast Missourian last year.

The 2013 audit report, dated Dec. 19, 2017, found �significant deficiencies� in the city�s financial practices, including lack of a written approval process for timecard changes.

Timecard changes �should have an approval process city employees have to follow before paychecks are written and distributed,� Bucher wrote.

Without such a process, timecards can be changed without approval or without using the city�s punch-card machine, he said.

Bucher wrote in the report the city has said it �will consider� the recommendation.

Timecards have been an issue in the small Scott County town. Jason Ourth, the son of Oran police chief Gregg Ourth, resigned his position as a part-time police officer last year amid accusations of timecard fraud.

Phillips and Cindy Seyer, wife of Alderman Neal Seyer, raised the accusations at a board meeting last spring.

Phillips said Jason Ourth did not clock in or out while working as a police officer. Phillips said the police chief clocked in his son�s timecard, then manually would write in clock-out times.

The police chief, Senciboy and other city officials repeatedly have dismissed the accusations as unfounded.

But the Missouri State Highway Patrol last fall began a preliminary inquiry into the matter. Patrol Capt. John Hotz said in an email in October the agency�s division of drug and crime control would seek to determine �if any actions of any party are criminal and if an investigation is warranted,�

Patrol Sgt. Shawn Griggs said recently the inquiry was continuing, but was �nearing conclusion.�

As to financial management, cities both large and small are encouraged to have annual audits, said Richard Sheets, deputy director of the Missouri Municipal League.

The League lobbies the Legislature on behalf of cities.

Sheets said cities that don�t have audits performed annually can end up saddled with �a lot of problems� that could have been more easily resolved if detected earlier.

The Missouri Constitution requires all local governments to have annual budgets and �be audited,� Sheets said. But it does not clearly state audits must be performed yearly, he said.

Still, Sheets said �common sense� suggests audits should be performed annually.

�It is a smart thing to do,� he said.

mbliss@semissourian.com

(573) 388-3641

Pertinent address:

Oran, Mo.