'A Stark Reminder': Auditor Foley Releases Misuse Findings in 2025 Audit Process

by Lewis Thune

(Picture credit Matt Johnson)

Nebraska State Auditor Mike Foley announced on Tuesday the results of five audit examinations conducted by his office, illuminating alleged financial impropriety in Nebraska local governments.

“Approximately 2,500 political subdivisions and other local governing bodies throughout Nebraska are required to file annual audits with the Auditor of Public Accounts,” his office said. With the auditor’s approval, a subdivision’s required audit can be waived upon request if “its financial affairs appear to be in order” based on basic analysis of “prescribed financial records submitted by the requesting entity.”

It was during this routine yearly process that Foley’s office said it uncovered five instances of the misuse of public funds. Certain officials in the villages of Merriman, Herman, and Alvo were implicated, in addition to a David City Clerk and a Plains Historical Society board member.

As some local and state investigations are ongoing, no alleged wrongdoers were cited by name.

“The audit waiver review process is instrumental to my office’s continual efforts to ferret out financial improprieties,” Foley said. “These findings serve as a stark reminder that threats of fraud and theft of public funds are pervasive, and constant vigilance is required to detect or, better yet, prevent them.”

Merriman

The clerk of the village of Merriman, which is located in Cherry County, was cited as having potentially misappropriated over $10,000.

Foley’s office states that the village’s FY 2025 audit waiver request recorded a total of $10,225.96 in customer utility payments that never entered the village bank account.

“Included in this amount, moreover, is a $204 credit to the Clerk’s own utility account, for which no payment appears to have been made” the office said.

After observing no utility cash receipts deposited into the village’s bank account, the clerk reportedly told Foley’s office that this was because the village accepted only checks and money orders for utility payments. She later claimed to have found and deposited multiple missing checks to the village bank account, but was unable to provide images of these checks upon request.

After being informed by multiple utility customers that they paid their utility bills in cash, Foley’s office confirmed with the village’s banking institution that the subsequent deposits the clerk claimed to have made consisted entirely of cash, not checks.

Thus, Foley’s office concluded that the clerk likely misappropriated up to $10,225.96 and appears to have provided false information to the auditors, “both of which constitute crimes in Nebraska.” Nebraska State Patrol, Foley states, have since opened an investigation.

Herman

The Village Clerk of Herman in Washington County was cited as having potentially made over $2,000 worth of personal purchases on the municipal credit card in the span of 16 months from late 2024 to early 2026.

“An electric toothbrush, medications, toiletries, shampoo, and dozens of other items of an obvious personal nature were purchased” the auditor’s office said, and stated that the clerk claimed that the purchases were accidental, as “the municipal credit card was saved to her own personal accounts at both Walmart and Amazon, which she uses periodically to procure goods for the Village.”

Foley’s office noted, however, that multiple purchases occurred over the counter, which would require the physical presentation of the village card. While the clerk did reimburse the village nearly $800 before the audit, she did not disclose the nature of the purchases until the auditor’s office requested the village’s credit card statements.

Furthermore, having still accrued an outstanding personal debt of over $1,300 to the village, “the Clerk claimed originally that she had planned not to cash her outstanding Village paycheck from September 2025. The auditors found, however, that the paycheck was cashed shortly after being issued.”

Such actions would constitute theft, improper use of public funds, and improper use of a political subdivision’s purchasing card. Foley states that his office has referred to the matter to multiple state and county officials.

Alvo

While no specific crime is alleged against municipal authorities in Cass County’s Village of Alvo, Foley’s office decried the negligent stewardship of village funds.

Foley’s office said that prior to the waiver request, it received an anonymous fraud tip indicating the municipal Road Fund bank account. Upon investigating the tip, “the audit team identified four questionable electronic debits, totaling $30,273.06, that cleared the Road Fund bank account in August and September 2025.”

The Village confirmed to Foley’s office that their Board did not authorize these debits.

However, Foley’s office states that despite becoming aware of the first two potentially fraudulent debits, the Village failed to close the account and waited two weeks to notify law enforcement of the transactions, allowing the subsequent two debits to be incurred.

“None of the apparently purloined funds had been recovered as of January 2026” Foley’s office said.

David City

The former City Clerk and Treasurer of David City is alleged to have misappropriated up to $5,800 of public funds in personal purchases and unapproved salary increases during her tenure.

“Foley’s audit team identified 15 presumably personal purchases, totaling $914.63, made by the former Clerk/Treasurer with municipal credit cards,” the report stated, identifying items such as clothing, detergent, and food. “In addition, she appears to have paid herself $4,983.01 in excess of her authorized gross wages between January 2021 through October 2025.”

The auditor’s office confirmed that the Nebraska State Patrol was investigating the matter.

Plains Historical Society

In the final case, a former board member and secretary of the Plains Historical Society in Kimball County made over $1,300 in personal purchases on a Historical Society debit card.

“The former Board member and Secretary was responsible for convincing the Society to issue the debit card,” the report stated, “which was used at various vendors, such as a smoke shop in Aurora, Colorado.”

To the Society’s credit, the release states that the Treasurer discovered the apparent misuse and cancelled the card.

“The Board Chairperson, who happens to be the father of the former Board member and Secretary, reimbursed the Society in full for the expenditures at issue.”

Criminal charges were filed, and the former board member pleaded guilty to misdemeanor theft by deception. She paid a fine of $100.

“This series of audit findings is both disheartening and instructive,” Foley said. “it is deeply troubling to know that in a state like Nebraska, where core values of honesty, decency, and integrity serve as the very bedrock of society, such apparent misconduct remains so widespread.”

However, Foley was encouraged by the work of his staff to find and document the abuse of public trust, both large and small.

“My auditors and staff are second to none,” he said. “Working together, we can protect those valuable resources, ensuring that they are used properly for the benefit of all our citizens.”

— Lewis Thune is a writing fellow with The Plains Sentinel.