The Iowa State Auditor’s Office is calling for stronger financial oversight in the City of Schleswig after a new agreed-upon procedures report identified 20 findings tied to internal controls, budgeting, and compliance with Iowa law.
The report covers the period from July 1, 2024 through June 30, 2025.
Auditor of State Rob Sand released the findings on Thursday (April 2), noting issues ranging from a lack of segregation of duties to missing bank reconciliations and deficit fund balances.
One of the most significant concerns outlined in the report involves segregation of duties, where a single employee handled multiple steps in key financial processes—from cash handling to payroll, utility billing, and financial reporting. Auditors say concentrating so many responsibilities with one person increases the risk of errors or misuse of funds.
The audit also found the city was not reconciling bank accounts throughout the year. When auditors performed a reconciliation for June 30, 2025, the city’s books were off by $1,399, and an accurate list of outstanding checks and deposits in transit had not been maintained.
Another issue involved separately maintained accounts for the fire department and library. Those accounts were kept outside the city clerk’s records, were not included in the city’s budget or annual financial reports, and their disbursements were not reviewed or approved by the city council.
Auditors also flagged a dual‑compensation violation. A city council member was paid a total of $3,103 for checking pool chemical levels and serving as park administrator—payments auditors say violate Iowa Code, which prohibits elected officials from receiving additional compensation for city employment.
Other findings included:
- Overstated fund balances in the city’s annual financial report by more than $130,000 combined.
- Utility billings and collections that were not reconciled.
- Budget overages in multiple departments, with no documentation showing the required public hearing notice for a budget amendment.
- Deficit fund balances of nearly $72,000 across two city funds.
- Questionable disbursements, including $86 for Christmas decorations shipped to the city clerk’s personal address.
- Unsupported journal entries, missing invoices, and a late fee paid due to untimely review of disbursements.
Auditors emphasized that the city council has a fiduciary duty to exercise “watchful and responsible care” over public funds, noting that many of the findings point to a need for stronger oversight.
The Auditor’s Office provided recommendations for each issue, and the full report is available on the Auditor of State’s website.
