Auditor Galloway discusses Joplin audit, transition to statewide office

State auditor Galloway presenting the August 2015  audit on the city of Joplin.
Missouri Auditor Nicole Galloway discusses an August 2015 audit of the city of Joplin during her presentation Friday at the MU college of business. | Tatiana Darie/Missouri Business Alert

“A good audit gets results,” Missouri state auditor Nicole Galloway told an audience of business students at the University of Missouri on Friday. That concluded her discussion of a state audit on Joplin that found millions of dollars misspent by the city government.

Questionable business dealings and mismanagement of taxpayer money have earned the city a “poor” rating from the Missouri State Auditor’s Office and led to the resignation of city councilman Mike Woolston.

“This is an extreme example of waste, and it illustrates when government officials become some entangled in business dealings, it leads to a distrust in the system and a distrust in the people who are elected to represent our best interests,” Galloway said, adding that her office will conduct a follow-up review to measure the progress of key findings.

Galloway, 32, was sworn in as state auditor in April, succeeding former auditor Tom Schweich, the 2016 gubernatorial candidate who committed suicide in February. Galloway, the former Boone County treasurer and a CPA who earned her MBA from the University of Missouri, was appointed by Gov. Jay Nixon to serve the remainder of Schweich’s term, which runs until January 2019.

“Obviously, I am sensitive to the circumstances surrounding the transition,” she said. “Auditor Schweich was a great loss for Missouri.”

Galloway said the transition in office has being “going well” because she was prepared to step into the role given her professional background. In her first few months on the job, Galloway replaced two top employees in the auditor’s office. Chief of staff Trish Vincent and deputy auditor Harry were both hired by Schweich.

Galloway told students she’s committed to making sure every single penny of taxpayer money is used as efficiently as possible. In her first six months as state auditor, the agency has identified more than $30 million in waste and neglect in the government from small cities to big state departments, Galloway said.

Copies of the August 2015 state audit on Joplin were handed out to students before the talk, and Galloway asked students to go through the report and evaluate the key findings.

MU student looking through a state audit on Joplin, which found millions of dollars mismanaged by the city government.
A student looks through a state audit on Joplin, which found millions of dollars mismanaged by the city government. | Tatiana Darie/Missouri Business Alert

In 2011, a tornado ripped through Joplin, destroying schools, homes and businesses. The storm killed 161 people and injured thousands more. Since then, federal and state resources have been allocated to the city for cleanup and rebuilding efforts. But some also came to profit from the tragedy, Galloway said.

The audit found that city officials named Wallace Bajjali Development Partners as the lead developer for a number of projects and spent nearly $1.5 million, but no real estate redevelopment ever occurred.

The Joplin community collected more than 5,000 signatures for the audit. Under Missouri law, citizens can request an audit of their local municipality by collecting signatures on a petition based on the number of voters in the particular district.

A few weeks ago, a separate state audit found that the Department of Revenue was withholding about $20 million in refunds to businesses across Missouri. As a result of the investigation, the agency is returning the money to business owners.

Galloway also promised to make sure the private data of Missourians is well protected. Two weeks ago, her office announced five audits in different school districts across the state focused on cybersecurity.

“The cost for a data breach is significant,” Galloway said. “Cybersecurity in educational institutions is a growing concern across the nation.”

She cited a study released this year that estimates that institutions bear a cost of about $6.5 million for such an incident. Expenses include investigating and notifying the victims, as well as repairing the loss of information.

During the talk, Galloway said she was pleased to see young women in the audience and encouraged them to stand up for themselves in the workplace. “Negotiate for yourselves,” she said. “Advocate for yourselves.”

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