State auditor reveals steps by fired Ponca city clerk to render the community ‘non-operational’

LINCOLN, Neb. (Nebraska Examiner) — City computer records wiped clean, a data backup system disabled and 21 years of documents removed.

Those actions were taken by Denise Peterson, the city of Ponca  clerk/treasurer/administrator, just prior to her dismissal on Feb. 1 by a new mayor, according to a State Auditor’s report released Tuesday.

The auditor’s nine-page report suggested that Peterson, who worked for the northeast Nebraska community for 21 years, may have violated state laws prohibiting the destruction and misuse of city records.

In addition, the auditor raised questions about two instances in which Peterson was issued two paychecks for the same work periods, and the possible misuse of a city credit card.

Intent was to leave ‘city cupboards bare’

Ponca city officials, in response to the audit, said that Peterson actions were “deliberate and premeditated to leave all the city cupboards bare and the city non-operational.”

The city incurred “excessive costs” in an attempt to recreate and retrieve documents removed or destroyed by the clerk, city officials told the auditor.

State Auditor Mike Foley said that the erasure of important financial records by the departing clerk was “very disturbing and beyond anything I have ever seen.”

“That act combined with what we do know about the obvious abuse of the city’s credit cards begs for harsh penalties,” Foley said.

A text message left at a phone listing for Peterson was not immediately returned on Wednesday morning.

According to the audit, Peterson:

‘Vacation payout’

The city issued a letter to Peterson and her attorney demanding the return of city records, the audit stated, but a bag of items retrieved were “of no value” and mostly contained personal files concerning scrapbooking and quilting.

The audit indicated that Peterson was issued two paychecks, of about $1,400 each, for the same, two-week work period in both February of 2021 and February of 2022. One of the duplicate checks had “vacation payout” written on it.

The auditor doubted whether the check was really vacation related because the amount matched her paycheck, but said that records could not be located to determine why the duplicate checks were issued.

The audit also raised questions about 68 charges totaling nearly $3,800 made by Peterson using a city credit card for iced tea and other non-alcoholic beverages, and hiking boots and sneakers, between December 2020 and her dismissal.

The audit cited state law that says that unless such beverages are purchased for volunteers, first responders or a recognition dinner, the purchases were improper. Auditors also questioned whether the clothing and shoe purchases were for city purposes.

In addition, there were 144 other credit card transactions, totaling $10,674, that lacked proper supporting documents.

City of Ponca officials, in their official response to the audit, said that new rules have been passed concerning use of the city credit cards, and steps have been taken to back up city records.

A new clerk, city officials said, has been “exceptional” in helping adopt and administer new internal control policies.

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