DEXTER, IOWA (WHO) — A special investigation by the office of State Auditor Rob Sand found thousands of misspent and unaccounted-for funds from the library in the small town of Dexter. The audit, requested by library officials, covers the final seven years of service of former Library Director Mary McColloch. The report found McColloch appears to have diverted funds away from the city and into a bank account that she managed for years.
Mary McColloch became Library Director in 2008. She resigned in February 2022. According to the Auditor’s report, authorities were called to the library after McColloch was seen removing boxes and a filing cabinet from the building into her personal vehicle shortly after her resignation. That incident lead library officials to begin reviewing their books. After apparently finding evidence of missing funds, the State Auditor’s Office was contacted.
The Auditor’s Office says it identified tens of thousands of dollars in mismanaged funds under McColloch’s leadership, including:
- $13,589 in undeposited collections
- $4,179 in improper disbursements
- $3,361 in unsupported disbursements
Most of the missing and undocumented funds can be traced back to a separate bank account managed by McColloch, according to the Auditor’s report. That account – under the name Dexter Community Foundation – was established in 2014 to manage a trust which had been left to the city. According to the Auditor’s report, McColloch named herself as the sole trustee for the funds when opening the account.
Over the next seven years, the report says, thousands of dollars intended for the library were instead deposited into McColloch’s Dexter Community Foundation fund, including:
- $5,801 in checks written to the Library that were instead deposited into the Dexter Community Foundation’s bank account
- a $2,500 grant issued to the Library was instead deposited in the Dexter Community Foundation’s bank account
In addition, the report also found $5,212 of Library donations and money earned at fundraisers that were not deposited into the City of Dexter’s bank account. The report also notes unsupported disbursements including $2,302 paid to McColloch herself without proper documentation detailing for what she was being reimbursed.
The report from the Auditor’s Office raises further questions about how McColloch spent the money she is accused of diverting into her Foundation checking account. Of the $38,722 disbursed from the account between 2015-2022, $18,000 was issued to McColloch’s husband. Another $11,000 was issued to Audubon State Bank where Mary McColloch has a personal account.
The Auditor’s Office says its findings have been forwarded on to the Dallas County Attorney’s Office and Sheriff’s Office.