State audit finds almost $25K in undeposited Webster County Public Health funds

FORT DODGE — State Auditor Rob Sand’s special investigation of the Webster County Public Health Department has confirmed some financial concerns reportedly connected to the firing of former Director Kari Prescott in the spring of 2022.

Sand’s office identified $24,436 of undeposited collections, $32,663.85 of questioned costs charged to the Federal Family Planning Grant, and $1,611.13 of unsupported disbursements, according to the audit released Thursday.

The special investigation was requested by Webster County officials as a result of concerns regarding certain financial transactions processed by Prescott.

The inquiry period extends from July 1, 2016, through May 31, 2022.

According to the audit, the $24,436 of undeposited collections includes $16,456 of fees for immunizations and $7,980 of fees for tuberculosis tests administered by the Webster County Health Department.

“Because sufficient records were not available, it was not possible to determine if funds were not collected, collected but not deposited, or split between uncollected and undeposited,” the report states.

“Sand also reported it was not possible to determine if additional fees for other services were not properly deposited because adequate documentation was not available.”

Prescott, who had been with the department since 1997 and served as director since 2008, was placed on administrative leave by the Webster County Board of Health on May 19, 2022, pending an investigation into allegations of a hostile work environment, financial irregularities and irregularities in documentation, it was previously reported.

Further investigation led to Prescott’s immediate termination by the board on May 25.

It was after firing Prescott that the Board of Health voted to contact Sand’s office and request the audit that was released Thursday.

At that time, Webster County Attorney Darren Driscoll said that Prescott was fired for “fostering a hostile environment, rising to the level of misconduct on the part of the director.”

On Thursday, Driscoll released this statement in response to the audit results:

“The Office of the Iowa State Auditor was hired by Webster County to perform a special investigation into the finances of the Webster County Health Department after former Health Department Director, Kari Prescott, was terminated from employment by Webster County on May 25, 2022, following an internal investigation by the Webster County Attorney’s Office and Webster County Human Resources Department.

“Webster County took swift action to investigate reports of alleged misconduct in the Health Department and assisted the Office of the State Auditor in their special investigation. In addition, the Webster County Attorney’s Office contacted the Iowa Attorney General’s Office and Iowa Division of Criminal Investigation to review the conclusions set forth in the State Auditor’s report and determine what action may be appropriate going forward. Webster County would like to thank the Office of the Auditor of State for the State of Iowa for their efforts in this matter.”

It would be up to the Iowa Attorney General’s Office to file charges against Prescott. As of press time Thursday, no charges had been filed.

The audit states that “the procedures performed identified $32,663.85 of questioned costs related to payroll being improperly charged to the Family Planning Grant and $1,611.13 of unsupported mileage reimbursements issued to the former Public Health Director, Kari Prescott.

“Sand further reported that the (Webster County Health) Department received COVID-19 Response grant funding for the period of January 1, 2021 through May 31, 2022. The grant allows for grantees to submit claims for reimbursement of administrative costs, or bill insurance companies for the administrative costs.

“The County cannot bill both the grant and the insurance companies of the same administrative

costs. An allegation was made the county double billed for these administrative costs. However,

because of the lack of supporting documentation, we could not reconcile the amounts which should

have been billed to the grant and insurance companies for administrative costs under the COVID 19

grant. As a result, we cannot determine if administrative costs were double billed.”

Regarding the funds that were not deposited, the audit’s breakdown of the numbers looks like this:

In 2017: $2,924 in undeposited immunization collections and $1,950 in undeposited tuberculosis collections;

In 2018: $2,079 in undeposited immunization collections and $1,725 in undeposited tuberculosis collections;

In 2019: $2,693 in undeposited immunization collections and $1,545 in undeposited tuberculosis collections;

In 2020: $3,594 in undeposited immunization collections and $585 in undeposited tuberculosis collections;

In 2021: $3,589 in undeposited immunization collections and $1,410 in undeposited tuberculosis collections;

In 2022: $1,577 in undeposited immunization collections and $765 in undeposited tuberculosis collections.

The audit also detailed unsupported reimbursements paid to Prescott, much of which was labeled for mileage:

10/28/15 — $136.50

12/15/15 — $309.75

02/09/16 — $196.00

04/19/16 — $428.26

07/12/16 — $236.67

08/08/17 — $174.60

01/22/19 — $24.75

03/17/20 — $52.50

12/22/20 — $52.50

Total unsupported reimbursements to Prescott: $1,611.53.

“Because the mileage reimbursements were not supported by sufficient documentation to determine the location and reason for the travel, it was not possible to determine if the payments were for department operations or personal in nature,” the audit states.

According to the audit, Prescott began employment with the Webster County Health Department as an accounting clerk on January 28, 1997. She became the department director on September 1, 2008.

As director, she was responsible for the oversight of all grants and employees at the department. She was also responsible for approving contracts, such as the Family Planning Grant and the Covid-19 Response Grant.

Webster County Public Health operates with funds from property taxes collected and distributed by Webster County and grants from the State of Iowa. Revenue is also received for providing services such as immunization and tuberculosis tests to individuals who sometimes pay in cash. Other payments for these services can come from Medicare, Medicaid, Veterans Affairs, and private insurance.

“As the director, Ms. Prescott was responsible for assuring proper internal controls were administered and maintained,” the audit states.

“On May 18, 2022, a physician submitted a Freedom of Information Act (FOIA) request to the (Webster) County, specifically due to concerns of potential double billings for the Family Planning and COVID-19

Response grants. The FOIA request was received by the Webster County Attorney, who conducted an

internal investigation of concerns identified.

“During the county’s internal investigation, a former bookkeeper stated they were instructed by

Ms. Prescott that when cash was received for immunizations, the cash receipt was not to be recorded or deposited with the (Webster) County Treasurer, but rather placed in a cash bank bag located in Ms. Prescott’s desk drawer which was against department policy.”

Deposits with the Webster County Treasurer were supposed to be made weekly.

“According to the department’s former bookkeeper, the department did collect all cash and checks at

the end of each clinic. The former bookkeeper also stated they would remove the cash that was

collected and gave it directly to Ms. Prescott per instructions given by Ms. Prescott. The former

bookkeeper also stated, that in some instances, Ms. Prescott would get the cash collected out of the

bank bag herself. The former bookkeeper would then take the department’s immunization receipt

documentation and any cash and/or checks to the County Treasurer’s Office to be recorded in the

county’s accounting system and deposited in the County’s bank account.”

The audit states: “We contacted Ms. Prescott through her attorney to obtain an understanding of her job duties and certain transactions; however, Ms. Prescott declined our request to meet.”


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