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Auditor: Iowa chief used fundraiser account for personal uses such as McDonald’s, water bill

The investigation found that while Ryan Pierce served as Stanwood fire chief, $4,403.84 was disbursed improperly

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By Emily Andersen
The Gazette

STANWOOD, Iowa — A former fire chief in the small Cedar County town of Stanwood used the fire department’s fundraising account to make non-departmental purchases that totaled several thousand dollars, according to a report released Tuesday by Auditor of State Rob Sand.

Sand’s office opened a special investigation into the Stanwood Fire Department — at the request of the city — between Dec. 1, 2020 and April 30, 2022.

According to the report, from Dec. 18, 2020 to Apr. 30, 2022, Ryan Pierce was fire chief for the department and his wife, Kim Pierce was the treasurer for the fundraising account.

The city pays for the department’s general operating expenses out of the city budget, The fire department’s fundraising account — which is operated by the department and not directly monitored by the city — is where money from annual fundraising events like a tenderloin supper, T-shirt sales, and a gun raffle were deposited, the report states.

Sand’s investigation found that while Pierce was chief, $4,403.84 was disbursed improperly from the fundraising account. Improper disbursements were classified as any disbursements that were either personal in nature, or not reasonably necessary for the operations of the department.

Among the improper disbursements were $1,713 of purchases that Ryan Pierce admitted to the city were personal purchases. He paid $1,165 to Veridian Credit Union, $51.91 to McDonald’s, and $497 to the City of Stanwood for a water bill associated with a property he owned.

Ryan and Kim Pierce resigned from their positions in April 2022. An investigation into the fundraising account was started earlier that month after a city clerk noticed some unusual transactions on the account. The clerk usually put the bank statements for the account, which are sent to city hall, into a box for the chief without looking at them, but in April 2022 she glanced at the statements and noticed multiple ATM withdrawals and other suspicious transactions that caught her attention, according to the report.

The clerk contacted the bank, which told her the account’s balance was $4. The city contacted the State Auditor’s office to request an investigation.

After resigning, Ryan Pierce told the city council members in a letter that the three personal transactions were done by mistake when the department credit card auto filled on his phone, according to the auditor’s report.

“I was never asked or allowed to go over the charges at the meeting with the Mayor last night. I was just accused without allowing me to explain and I was forced to resign,” Ryan Pierce said in the letter.

Other improper disbursements made from the account included ATM withdrawals that couldn’t be accounted for by the fire department, multiple gas station purchases that happened outside the department’s coverage area, and reimbursement checks issued to Ryan Pierce with memo lines that were deemed unrelated to department expenses, like “Donation to a Nursing Home” and “Nebraska Trip.”

The report also identified $3,159.28 of unsupported disbursements and $188.50 of undeposited collections during the time Ryan Pierce was chief. Unsupported disbursements were defined as money that was taken out of the account that could have feasibly been for department operations or for personal reasons, but there wasn’t enough documentation available to determine which.

The undeposited collections included money from T-shirt sales and a gun raffle that was never deposited in the account. The report notes that at some of the fundraisers, clear records of how much money was donated were not kept, so it was difficult to determine if there was more money that didn’t make it into the account.

The report includes several recommendations to the city about how records of fire department expenses should be kept and how often they should be shared with the city council in order to prevent situations like this from happening in the future.

“An important aspect of internal control is to establish procedures which provide accountability for assets susceptible to loss from errors and irregularities. These procedures provide the actions of one individual will act as a check on those of another and provide a level of assurance errors or irregularities will be noted within a reasonable time during the course of normal operations,” the report states.

Copies of the report have been filed with the Cedar County Sheriff’s Office, the Division of Criminal Investigation, the Cedar County Attorney’s Office, and the Attorney General’s Office.

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