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Audit reveals misappropriation of public funds in Hartshorne totaling more than $1.7 million 

HARTSHORNE, Okla. - A state audit of a small Pittsburg county city found more than $1.7 million in cash utility payments submitted by residents never made it to the bank over several years, along with tens of thousands of dollars charged to a city credit card for personal use.

The investigation by the Oklahoma State Auditor and Inspector into Hartshorne, the second-largest city in Pittsburg County with a little more than 2,100 residents, began in early 2016 when a small number of citizens requested a special audit after their concerns weren't being addressed by the city council.

The 63-page report also details thousands of dollars in misappropriation of court fines, as well as payroll, open meetings and open records violations.

The audit says from July 2009 to July 2016, former city treasurer Shirley Day did not deposit more than $1.7 million of utility payments into the city's bank account. The audit doesn't detail where the money went. Day, who worked for the city for 36 years, resigned in September 2016.

"We went back as far as 2009 and determined it’s well over $1.7 million, but we have every indication to think this was probably going on a lot farther back than that," said State Auditor and Inspector Gary Jones in a phone interview with News 4. "Could be over $2 million, even upwards of $3 million that have been embezzled.”

Former City Clerk Dawn Dunkin used the city’s credit card to purchase more than $80,000 of materials and goods for personal use between July 2011 and July 2016. Dunkin resigned in August of last year after working for the city for more than 22 years.

According to the report, Dunkin charged more than $8,500 to the city credit card for sporting event and concert tickets to Dallas Cowboy and Oklahoma City Thunder games, more than $7,800 in cell phone service for Dunkin and her family, and more than $6,550 in Amazon purchases including video cameras, TV shows, a 3D Blu-Ray home-theater system, hunting equipment and a Coach diaper bag.

Thousands of dollars was spent on trips to amusement parks, water parks, baseball games, hotel rooms, rental cars, as well as clothes, lawn equipment and furniture, car loans and car insurance.

The audit found Dunkin, along with 13 others, took a trip to Cozumel, Mexico in June 2016 for an all-inclusive stay the Iberostar Cozumel Hotel. According to the report, a submarine tour and deep sea fishing trip were charged to the city credit card on June 10 and June 11, totalling $1,376. A week later, a refund knocked the charge on the city card down to $829.75. A log included in the findings notes Dunkin said she was paying the trip's cost for everyone, however the audit couldn't determine if Dunkin used other city funds for the payment.

The total cost for the 14-person trip, including airfare, was more than $14,000.

The audit also details more than $18,000 worth of court fines, under Dunkin's care, were misappropriated. The audit doesn't detail where those funds ended up.

The audit only reviewed portions of time before Dunkin and Day's resignations, and shortly after. Jones said it's possible their alleged embezzlement goes back even further; and that there could be, at least, a third person involved.

He said this is likely the largest misappropriation of public funds identified in an audit by the Oklahoma State Auditor's Office.

"The fact it’s gone on for a number of years, that there were multiple months that no cash -- at all -- was deposited. There were credit cards that were misused. They falsified receipts, credit cards, and it’s something that should have been caught if they had proper oversight," Jones said.

"We’re going to take this to (Attorney General Mike Hunter) and we’re— there’s also an interest with the FBI. They want a copy of this as well."

News 4 wanted to talk with Day and Dunkin about the audit.

As we walked up to Dunkin's home, a person inside opened the front door and let out two large dogs -- apparently in an attempt to avoid our questions. Shortly after we left, several vehicles pulled up outside of the home and two people walked inside.

When News 4 went to Day's home, she walked inside as another women told us they had "no comment."

The city's former mayor, Carolyn Trueblood, resigned in September 2016 after the FBI began an investigation into the city's finances.

When News 4 reached current mayor Leon Mace at his home, he declined to talk on camera.

"I'm glad the audit report is out and we're seeing what we have been discovering," Mace said. "I Hope the citizens will give us an opportunity to show that this isn't happening anymore."

According to the audit, court records, citations, receipts were missing from city hall, which fell under Dunkin's job. The audit also found open meeting and open records act violations, along with payroll violations.

The audit says former city council member and a public works trustee, John Beauchamp, received more than $6,700 in improper compensation.

Former Fire Chief David Mass was improperly paid more than $3,900 because of a contract between the city and company he owns, according to the audit.

It also found Hartshorne and public works "employee paychecks were routinely issued early," sometimes two weeks before the end of the pay period.

"Anger, disgust. A lot of people have lost a lot of trust. Just in eachother," said city council member Sheryl Baker. "Both amounts are outstanding. And I think most of the anger comes from people being able to see the material goods that the city's money was spent on."