The audit reports stated that the previous town clerk, Robbin Gardner, was paid $587.77 more than she was due for her services and that no W-2 tax form was ever issued. On top of that, Gardner made no payments on her personal water bill on either of her two water meters since Feb. 28, 2003. The readings on those meters indicate that she owes $2,540.95 in unpaid water bills on top of her $135 account balance when she began working for the town.
McMahan says that Gardner, who has since moved to North Dakota with her husband who is in the Air Force, is calling the town wanting her $50 deposit back.
"I would be reluctant to give that back," McMahan said.
Town Trustee David Burbank, who came to office in April 2004, said it was obvious town funds were being mishandled, which led himself, his fellow trustees and the county treasurer to approach District Attorney John Wampler to ask the state to conduct an audit, since the town had no funds to hire an accountant.
"It became pretty obvious to the trustees in April that the town clerk was stonewalling us in answering questions about the budget," Burbank said. "It didn't make sense as to why debts weren't being paid."
Burbank said that since Gardner left town at the first of the year, a total of $2,500 has been collected, a far cry from the $130.75 deposited in fiscal year 2004.
According to the report, when the audit began on Jan. 5, no money had been deposited in the town's account with the Jackson County Treasurer's Office since July 1, 2004. On the day after the audit began, $195 was deposited.
Auditors found cash "randomly placed in books and envelopes." Four checks were found made out to Headrick Utility Trust totaling $232 dating from August 2002 to August 2004. Cash amounting to $245 was found in an envelope dated Nov. 3, 2004, with a Town of Headrick deposit slip.
A total $6,233.25 in utility payments entered in registers was never deposited in the town's account. Incomplete receipt books were being kept, and some receipts were torn out of the books that were kept.
Although meters were being read monthly, "bills were being generated late for some months and not at all for others months," the audit report stated.
Headrick citizens since 2001 have paid a deposit of $50 per water meter. Before that, the deposit was $25 per meter. None of the funds for any of the town's 40 to 50 water meters could be found.
Burbank said that malfeasance has left the town, with a population of 130, with more than $6,000 in debt. Of that, about $4,000 is owed to the county for water and about $2,100 is owed to the town's garbage contractor. A $6 monthly fee is being added to town water bills for the purpose of paying down the debt. Add to that about $2,500 that the state may bill for the cost of the audit, which is the town's responsibility.
He said that Gardner was hired by former Mayor Jerry Simmons, who has since died.
"Small towns like this have volunteers who run for the board and a mayor who receives no payment," McMahan said. "They're just doing this as volunteer work to keep the town afloat, and the clerk is the only one who is being compensated."
He said part of the problem was the cash basis many customers operated on. He suggested that in the future, water customers pay by check and keep their receipt so that there is a paper trail.
Burbank said that when the audit began, trustees were hopeful that the town would recover some of the missing funds. He doesn't hold out any hope for that now, but says that with proper oversight the town should eventually get out of debt, but he admits that will be a long process.
District Attorney John Wampler said that he anticipates filing charges against Gardner.
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