The City of Oakdale is missing a total of $358,025.56 in funds. Leaders are trying to determine how to move forward and if the funds can be recovered as an investigation continues into the misappropriated funds.
The person alleged to be responsible for taking the funds is now dead, so criminal charges will likely not be filed in this case unless authorities discover other persons involved in this case.
For months, rumors have circulated around the person presumed to be responsible for taking the funds (Melissa “Lisa” Schaefer, former city clerk who died March 11, 2021). At the last council meeting, it was confirmed that $358,025.56 was missing – $248,563.58 between July 1, 2019, and June 30, 2020, and $109,461.98 from July 1, 2020, to March of 2021.
Oakdale Mayor Gene Paul said as soon as the city’s audit indicated funds had been misappropriated, the district attorney and Louisiana legislator were contacted.
From what the auditor and mayor have discovered it appeared the clerk, who took care of employee salaries and had access to instruments to move the funds, had allegedly created two new accounts to funnel money into her name. When rumors started late last year, both the mayor and auditor told the press that no money was missing.
However as the auditor’s office begin going through the paces for the audit stemming from July 1, 2019, to June 30, 2020, red flags were found.
The mayor said the city’s CPA Royce T. Scimemi explained during the audit, he discovered large unexplained amounts of money in the credit card account in December. At the time, the mayor learned Scimemi requested supporting paperwork but received no documentation. In March, the auditor approached the mayor for assistance in gathering the information necessary to complete the audit. At that time, it was discovered fraudulent invoices existed and the bank statements had not been reconciled in a timely manner. And the person believed to be responsible couldn’t provide documentation to match the money being moved.
Discussions have centered around how to proceed forward since criminal charges cannot be filed against this person. Some believe an extensive audit of prior years should be conducted so the city will know exactly how much money was taken over the years. The mayor states the city will unlikely incur more audit costs, and it will never recover all of the missing funds. Now if the legislative auditor wants to take on the costs, he said the city would allow it, but he didn’t see how the city could spend more money when every dollar it has is important in keeping it afloat financially.
“Going back 15 to 19 years, just to be able to say how much was stolen, is not feasible when we’re on a tight budget now,” he said. He explained this type of audit could cost taxpayers $10,000 or more.
The council may be able to cash two surety bonds totaling $85,000. If that occurs then some of the money would be recovered.
A civil suit is another option against the surviving family members of the deceased person. The key will be looking at how long a suit may last for the city and if it can recover all of the funds taken. The mayor said this could be a long shot for the city.
“It’s just devastating with everything that has happened,” Paul said. “The only thing we could do is regroup and move forward. We are going to investigate and decide the best route to take.”
He said his promise is to look into all ways on how the city can recover the missing funds. He said he was going to discuss options with the district attorney and legislative auditor to see what things can be done.
The mayor also stated they are looking at ways to prevent this from occurring in the future. He has spoken with the bank and changed the way Oakdale is doing business. He plans to seek guidance from LMA (Louisiana Municipal Association) and other areas to learn ways to prevent cases like this. He knows nothing is 100 percent in preventing theft, but they can come up with ways to make it harder to steal money from the city.
Paul said he always asks Scimemi if everything looked right, and he said things were until the red flags appeared. He said that person was good and knew how to make it hard to detect, so it was difficult to discover. He said the city’s payroll is also a fluctuating account because of people coming on and off the payroll, overtime, etc. At the end of the month it increases a lot when payroll taxes and health insurance are paid out of payroll. This made it hard to detect until the auditor saw the flags and requested more data indicating how payroll was being distributed.
Now Paul said they wait for the investigation to be completed to see if anyone else is involved. And as they move forward, they will be making decisions on how to best serve the city and its constituents in regards to the missing funds.
