The highest duty of the City Council and City staff, as public servants, is to serve the interests of the residents of Des Moines. This means safeguarding the public trust in the City, protecting precious tax dollars and ensuring that City resources are used prudently and in a manner that is consistent with the expectations of our community.
In June of 2018, the City obtained credible information that donations and funds that were intended for the City may have been diverted by specific City employees to the Des Moines Legacy Foundation (DMLF) an outside, independent third party.
The City immediately, pursuant to state law, notified the State Auditor and also retained the services of an independent financial investigations and forensic accounting firm to investigate.
The initial results of the investigation are now available and detailed in a report by Alvarez and Marsal Valuation Services LLC, the retained independent firm.
The key findings include:
• The presence of Parks, Recreation and Senior Services employees on the board of Directors for the Legacy Foundation created a conflict of interest where funds intended for the City could be diverted to the Foundation so that the funds could be controlled outside of the City Council approved budget.
• Opportunities were identified where funds designated for the City could have been, and actually have been, misappropriated to the DMLF.
• Specific instances were identified where donations made payable to the City were illegally deposited into the DMLF bank account.
• As of June 2018, 43 percent (43%) of funds raised by DMLF have not been spent to support the City’s Parks, Recreation and Senior Services Department. This iscontrary to public statements by DMLF that 100% of funds raised have been or will be expended to directly support parks, recreation and senior services programs.
• The annual cost to the City to support the DMLF has greatly exceeded the amount of funds raised by the DMLF.
• It was confirmed that a former City employee who was a subject of this investigation deleted a large number of City electronic records related to this investigation and facilitated the removal of boxes of documents from City buildings concerning the DMLF.
The full report and summary of initial findings are available on the City of Des Moines website and the matter has now been referred to outside law enforcement for further action. The City will continue to cooperate with all investigative parties and will provide further updates to the public, as they are available.
Report: Misappropriation of Funds by Employees
Power Point Presentation