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So Much for Lame Auditing… Dixon and $30 Million

“If there’s hanky-panky with the city’s money, you’d think these people are going to find it out,” he said. “We’re obviously going to look at our whole accounting procedures now.” – from USA Today after 
Rita Crundwell charged with embezzling $30 million

“It’s incredible really. In the last two years we’ve been really in a financial crunch with the whole thing… The annual audit didn’t show anything. Auditors even commented that we were doing fine with our cash controls.” from The Inquisitor after Dixon Comptroller Allegedly Embezzled 30 Million

Those quotes above are from the mayor of Dixon, Illinois, who seems to be flummoxed. How can a small town like Dixon can get taken for so much money? Sadly for the mayor, there’s nothing like $30 million dollars of stolen taxpayer money to focus attention on “accounting procedures.”

Here at For the Good of Illinois, we hear a lot of whining (most of it from proverbial foxes guarding the hen house) about how “expensive” it would be to engage in forensic audits of budgets across the state of Illinois. We chuckle at these critiques. The people of Dixon now know how expensive it is to allow business-as-usual auditing. It cost them $30 million.

This is why we favor implementing a system where every governmental entity in Illinois, and the state budget in particular,  is subject to audits – forensic or otherwise – on a regular basis. As Dixon embezzlement story shows, the standard audits performed by rubber-stamp accountants, yielding pro-forma Comprehensive  Annual Financial Reports (CAFR), simply aren’t cutting it.

It might be time for all of these audits to be more adversarial. If comptrollers and treasurers across Illinois knew that their work was going to be highly scrutinized, perhaps they would make better efforts at stewardship of the taxpayer dollar. This is why citizens deserve an auditing process  that actively seeks out fraud and/or misuse of public funds. Any expenses for such audits are a small price to pay. First, they promise to expose more unnecessary spending, and second, they will act as deterrent for such behavior in the first place.

Illinois citizens deserve aggressive audits of their government entities. The events in Dixon are proof.

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