Iowa State Auditor Rob Sand released a report Tuesday detailing his office’s investigation into the former city clerk of Delhi, who is accused of misusing funds. This is the second time in eight years the state auditor has investigated the misuse of funds by a Delhi city clerk.
According to the report released this week, Lori Tucker processed $66,559.28 of improper disbursements and $13,525.46 worth of unsupported disbursements between Jan. 1, 2015 and June 30, 2022.
Most of the improper disbursements involved payments made to Tucker for excess wages, unearned vacation hours, unauthorized insurance stipends, excess insurance premiums, improper contributions to a health savings account and excess mileage reimbursement checks.
The unsupported disbursements are payments that may have been appropriate, but the city didn’t have supporting documentation to explain them, according to the auditor’s report. Those payments included reimbursements to Tucker and a city maintenance worker, purchases from vendors, and purchases made with the city’s credit card.
The auditor’s office performed the investigation at the request of city officials, who met with the office in June 2023 to discuss concerns about excessive overtime and vacation payouts issued to Tucker while she worked for the city.
Previous city clerk sentenced to 15 years for embezzling $100K
This is the second Delhi city clerk to be investigated by the state auditor. The previous city clerk, Angela Billings, became the subject of an investigation in 2016 after she resigned and Tucker, the new city clerk, noticed discrepancies in billing and credit card payments. Billings was later sentenced to 15 months in federal prison for the embezzlement of more than $100,000.
Tucker starting working as Delhi’s city clerk in December 2014. In 2020, she took a second job as the city clerk of Ryan. Two years later, in 2022, Tucker resigned from her job in Delhi. She still hold the position of Ryan city clerk.
In her resignation letter to the Delhi City Council, Tucker stated that there had been rumors spread around town about her work behaviors. She said a hostile work environment had developed after a new mayor and four new city council members took office in January 2022, according to the auditor’s report.
Tucker filed a lawsuit in 2022 against the city of Delhi and Mayor Marty Kelzer, as well as three city council members, alleging gender discrimination, retaliation and defamation against her while she worked for the city.
The suit alleges that the four men talked down to Tucker because she was a woman, and spread rumors about her, including that she stole more than $50,000 from the city.
“They never acknowledged her accomplishments, such as doing the challenging work to discover that the previous clerk had been mismanaging city funds and building the city budget back up to a true operating budget for the city,” the suit reads.
Kelzer filed a lawsuit last year against Tucker, the former mayor, a former city council member, and a former city maintenance employee.
In his suit, Kelzer alleges that Tucker and the other defendants conspired to spread rumors about Kelzer’s business practices with the intent “to ruin the contractual relationship Kelzer has with his business partner(s) and current and prospective customers, as well as ruin the reputation of Mr. Kelzer,” the suit states.
Both lawsuits are still in the process of being adjudicated.
Report finds conflicts of interest, incomplete records
The auditor’s investigation report identified additional administrative issues beyond the city clerk’s use of funds. The city has made donations to nonprofits without documentation outlining the benefit to the public, the city regularly purchases flowers and food for non-city events that are attended by city officials, and two capital projects that should have been awarded through a bidding process were awarded to close personal friends of the former mayor and no bidding records were kept.
The city also failed to disclose a potential conflicts of interest between the former mayor and a business that benefited from a $100,000 grant the city sought.
According to the auditor’s report, after Tucker resigned, city officials were unable to log into the laptop she used as city clerk, where the city’s accounting records were kept. The passwords she provided were not correct, and the city later found the laptop had been encrypted with a software that would wipe the data on the computer when someone tried to access it. The city had to purchase a new laptop and send the old one to a computer company out of state to perform forensics and receive a report of the documents stored on the computer.
The auditor’s report recommended the city implement and follow stricter procedures regarding segregation of duties and reviews of bank reconciliations to prevent city resources from being misused in the future.
“An important aspect of internal control is to establish procedures which provide accountability for assets susceptible to loss from error and irregularities,” the report states.
The office referred the case to the Delaware County Attorney and the Iowa Attorney General’s Office to be investigated for potential criminal charges. The auditor’s office is also working on an investigation in the city of Ryan, where Tucker currently works as city clerk, according to Sand, who spoke to reporters Tuesday after releasing the report.
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