Iowa State Auditor Rob Sand has released an agreed-upon procedures report on the City of Cantril in Van Buren County, identifying 14 findings related to the receipt and disbursement of taxpayer funds, according to a press release from the Office of Auditor of State.
The report covers the period of April 1st, 2025 through March 31st, 2026. Sand provided the city with recommendations to address each of the findings. The City Council has a fiduciary responsibility to provide oversight of the city’s operations and financial transactions, with oversight defined as the “watchful and responsible care” a governing body exercises in its fiduciary capacity.
Among the findings, the report identified significant issues with the city’s general ledger and bank reconciliations. The city did not properly maintain a general ledger cash balance and did not record all interest earned and certain disbursements into the general ledger during the year, meaning bank and investment account balances were not reconciled to city records and a listing of outstanding checks or deposits in transit was not prepared.
The report also found that the city has not implemented the recommended Uniform Chart of Accounts for Iowa city governments, meaning the accounting system did not properly facilitate fund accounting required for governmental financial reporting — including compliance with legal requirements for road use tax and local option sales tax. Related to this, the city’s local option sales tax ballot requires collections to be used for street maintenance and emergency services, but the city did not record all disbursements in the accounting records or maintain documentation to support the use and unspent balances of those collections.
Utility billings, collections, and delinquent accounts were not reconciled throughout the year, and the city was unable to prepare a listing of delinquent accounts. The monthly City Clerk’s report submitted to the City Council for approval did not include a comparison of actual disbursements to the certified budget by function. Disbursements reported in the Annual Financial Report for the year ended June 30th, 2025 exceeded budgeted amounts in the public works, general government, and business type activities functions without the required budget amendments. The city also did not provide documentation to support all revenues and expenditures reported in the Annual Financial Report.
Payroll issues were also noted. Timesheets detailing hours worked per day were not submitted for two of three hourly employees observed. Payments made to an independent contractor for cleaning City Hall were not supported by an invoice detailing hours worked and the rate of pay.
The report found that a resolution naming the city’s official depositories did not state the maximum deposit as required by state law, and the city did not maintain an accounting record for each investment. Of 30 disbursements reviewed, six had no evidence of City Council approval prior to payment, and two were not coded to a disbursement function. City Council meeting minutes for four meetings observed did not include total disbursements for each fund, a list of all claims allowed, and a summary of all receipts as required by the Code of Iowa. The city also did not retain images of the back of cancelled checks as required by state law.
Segregation of duties was also flagged as a concern, with one individual having control over multiple financial functions including cash handling, collecting, depositing, reconciling, and recording.
A full copy of the report is available at auditor.iowa.gov. Those with questions can contact the Office of Auditor of State at 515-281-5834.
