Auditor Fitzpatrick finds no evidence of fraud in the City of Willard but new report highlights the importance of the city improving its management of the city water system

State Auditor Scott Fitzpatrick said today that an audit triggered by residents of the City of Willard who were worried a former city official may have misused city funds has found no evidence of fraud in the Southwest Missouri town. However, the new report, which gives the city a "fair" rating, does find the city has a major issue to resolve as its water system is losing water at a rate well beyond the state standard.

"I know the people of Willard were concerned that the fraud perpetrated by Corey Hendrickson at his place of employment may have spilled over to the city, but our audit of the city has found no evidence that he misused taxpayer dollars," said Auditor Fitzpatrick. "There are, however, many areas where the city can improve the way it operates and that includes city officials taking action to mitigate the extreme amount of water the city's system is losing each year. In order to keep utility rates down for its citizens, the city needs to figure out why it is losing tens of millions of gallons of water each year, and take steps to keep that from happening in the future."

The audit finds the city has high amounts of water losses and has not successfully reduced the rate of loss to acceptable levels. For the year ended December 31, 2024, the city lost nearly 72.7 million gallons (24 percent) of the nearly 300.6 million gallons of water it pumped. For the year ended December 31, 2025, that number increased to nearly 82 million gallons (26 percent) of nearly 315.2 million gallons pumped. According to the United States Environmental Protection Agency, most states have regulatory policies that set the acceptable losses from public water systems at a maximum of between 10 to 15 percent or less. The standard for Missouri established by the Department of Natural Resources is 10%.

The report also finds the city has no written procedures to collect outstanding balances for inactive utility accounts and many old accounts have not been submitted to a collection agency in accordance with standard city procedure. As of March 3, 2026, the city had 324 customer utility accounts totaling $41,763 that had been disconnected and had balances more than 90 days past due, including 31 accounts for landlords totaling $1,467. Based on city utility records, as of March 3, 2026, city personnel had submitted 135 customer utility accounts totaling $20,342 to a collection agency, but had not submitted 95 accounts totaling $14,146 that met the city's undocumented criteria for submission to the collection agency.

Another finding in the report identifies how the city did not report allowances paid to the City Administrator as taxable income on the employee's W-2 form or subject the amounts to payroll tax withholdings during the year ended December 31, 2024, for housing expenses totaling $5,000, moving expenses totaling $2,000, and automobile expenses totaling $200. Additionally, the city's personnel manual does not adequately address holiday pay and some employees used more personal holiday leave than allowed by policy and practice. The report notes 9 city employees used more hours of personal holiday leave than was allowed by city policies and practice, with the hours used in excess of the maximum allowed ranging from 1.5 to 11 hours per employee.

Other findings in the report include the city's failure to follow up on old outstanding checks, and paying sales tax on some purchases that should have been tax exempt; city ordinances that have not been reviewed and updated for several years and consequently do not accurately reflect current operations; inconsistent compliance with the Sunshine Law for open and closed meetings; and a failure by the city to have a comprehensive records management and retention policy that includes electronic communication in compliance with the Missouri Secretary of State Records Services Division guidance.

The full audit report for the City of Willard is available here.

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