INVESTIGATION: City of Taft addresses lack of financial oversight and what comes next
TAFT, Tx — A finance report released by the City of Taft provides more details on the ongoing investigation into an allegation that taxpayer funds were misused and offers a clearer view of the financial challenges the city faces.
Interim Finance Director Lindsay Koskiniemi's findings reveal that since July 2023, the city has not conducted any bank reconciliations. Reconciliations ensure that all transactions on bank statements are reviewed and verified, reducing the likelihood of errors. Koskiniemi added that this is a matter that "urgently needs to be corrected."
According to the report, required quarterly tax filings have not been completed or paid since the third quarter of 2023.
Those filings report payroll taxes, including federal income taxes, Social Security, and Medicare taxes withheld from employee's paychecks, as well as the employer's share of Social Security and Medicare taxes.
According to the findings, the City of Taft owes approximately $247,000 in payroll taxes since the start of 2024 and will likely incur IRS fines for non-filing and nonpayment, according to Koskiniemi.
Koskiniemi added that the city's failure to use encumbrances to "freeze" obligated funds makes it difficult to know real-time year-to-date budget balances. This practice of not reserving funds for planned purchases when requisitions are made can lead to tracking challenges and potential overspending.
To correct these issues, the report lists completing all bank reconciliations for 2024 as a top priority. The city will also "enforce internal controls and increase oversight and accountability by regularly reporting to the City Council."
City Manager Ryan Smith also provided Taft residents with a State of the City report . According to Smith, "The City of Taft has experienced several challenges that include high employee turnover and a lack of oversight of internal controls."
Smith noted an increase in city revenue due to American Rescue Plan (ARPA) funds in response to COVID-19 in 2021. In 2022, the city allocated $2.9 million for various projects, including a new fire department and city hall.
"This influx in funds gave the administration a false sense of financial prosperity, and increased spending for projects ensued," Smith added.
Smith's memo states the city is now applying for a grant to cover water meter replacement, hoping to receive $712,500 in federal funds to replace all meters that haven't been updated to the new cellular models.
"Many people have been consistently underbilled for over a year," Smith explained. "We have also found many water leaks that have been masked by the underbilling."
According to Smith, around 70 accounts in the system show ongoing leaks.
Regarding the investigation into misappropriated funds, Smith said "not much" could be disclosed due to "multiple cases" of alleged misconduct still under investigation.
The investigation has led to the arrests of former City Secretary Andrea Gomez and former City Manager Kandi Hubert, with additional warrants issued for Goben . Hubert is charged with official oppression, and Gomez faces four additional counts of tampering with a governmental record with intent to defraud. Goben faces eight counts of the same charge.
Gomez was arrested in May and charged following an investigation into overtime misuse . She was indicted by a grand jury in September.
Smith noted that the city has insurance to cover "employee dishonesty," and it will complete the claim with its insurer once the investigation concludes.
"Management will implement necessary changes to prevent any future opportunities for dishonesty or misappropriation," the memo states.
In closing, Smith added, "The city understands the frustration felt by its citizens, and we feel it as well. There have been and continue to be issues within the city that we are working to resolve. This is only made harder by the current divide within the city."
