Dixon municipality – In just 22 years, its treasurer/comptroller misappropriated $53million in funds. (Apostolou and al. 2015). Rita Crundwell served as the city’s comptroller and was responsible for financial distribution to different entities. She stole thousands of dollars in her early years before she was able to make millions. Rita was known for being a competent finance officer who ensured that each allocation was properly accounted. However, she had created a Reserve Sewer Capital Development Account, (RSCDA), into which the funds were transferred. Kathe Swanson was notified of the situation in 2011. The Rita-effected municipal account was hidden and she discovered it. Her report to Rita and to FBI led her to spend 19.5 years in jail.
The city should have noticed that Rita was not being held accountable and there had been little monitoring. Clifton Gunderson’s inability to follow his instructions should have alerted Clifton Gunderson that there was fraud at the city. Clifton Gunderson had responsibility for reviewing the financial plan of the city and was happy to ensure that Rita Crundwell performed her duties honestly. Another sign of fraud was Rita Crundwell’s extravagant lifestyle. Rita managed to purchase and manage a number of beautiful horses, jewels and ships as well as a multi-million dollar home. Crundwell had a lifestyle that wasn’t consistent with her income. It suggests Crundwell may have been misappropriating public funds. The city’s poor financial records and difficulty in getting precise financial information are another red flag. Rita prevented others from getting financial information about expenditures, allocations and distribution of financial resource.
Rita created fake invoices in order to hide her suspicious allocations. This was done to prevent authorities from following her activities. Rita altered the logo of the Illinois Department of Transportation to appear legitimate in order to disguise her questionable allocations. It is possible that some details are forged, made, or missing, which makes it more difficult to verify its authenticity (Nigrini 2019, 2019). Some documents did not include dates which made it impossible to trace where funds were spent. Rita Crundwell could hide her fraud for over two decades because there was no proof. Rita created numerous initiatives which did not make it into the city council minutes. It was difficult for the institution, due to poor verifications, to find out where the money went. Rita diverted funds from the RSCDA account by using inadequate documentation about the financial expenses of the city.
To ensure that workers’ lives are in line with their salaries, the mayor may conduct a lifestyle audit. Hidden revenue sources are available to employees who can afford a luxurious lifestyle while earning a lower salary. The municipality must force employees to conduct a lifestyle audit, and reveal alternative sources of income (Einarsen, et al. 2016,).
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