State auditor probes North St. Paul finances

The state auditor is investigating the city of North St. Paul's finances just weeks after former City Manager Scott Duddeck abruptly resigned, admitting that $2,400 of his personal expenses were charged to the city and that he failed to provide receipts for more than 150 charges on his city-issued credit card.

The state auditor will examine city employees' credit card transactions dating to 2018, according to a June 23 letter to city leaders from Mark Kerr, special investigations director in the state auditor's office.

Kerr requested all credit card statements as well as receipts and documentation, according to a copy of the letter obtained by the Star Tribune.

A spokesman for the state auditor's office said, under state statute, the office was unable to confirm, deny or comment on any examination until it's complete or a public report has been issued.

City Council members Scott Thorsen and Candy Petersen said the city is cooperating with the inquiry.

"I think it is a good thing," Petersen said. "We are being transparent."

Interim City Manager Brian Frandle said all requested information has been collected and submitted to the state auditor.

"In collecting the requested information, no foul play was found," Frandle said in an e-mail. "The City takes the audit seriously and is fully cooperating with the State Auditor's Office."

In June, Thorsen asked the state auditor to dig into city finances after learning that nearly 200 credit card receipts — most of them Duddeck's — were missing, and that contractors completing personal work for Duddeck and his family had billed the city $2,400 for paint, supplies and a portable toilet.

"My intent is to put systems in place so this never happens again," Thorsen said Wednesday.

Thorsen, an accountant, said information from city staff and the city's audit report in May first raised concerns. According to those sources, staffers failed to properly file receipts for 191 of 387 charges made on city-issued credit cards last year in time for the city's annual audit — a "significant deficiency," according to auditors, that flouts both state law and the city's own policy.

Duddeck resigned on June 15. Several residents including Mayor Terry Furlong gave impassioned and emotion-filled speeches in defense of Duddeck at the City Council meeting Tuesday.

In a statement Wednesday, Furlong said he and the council are taking the matter seriously.

"The state auditor now has all requested documents and I believe at this time there has been no malicious activity found," he said, adding that he hopes auditors will wrap up their findings soon and "put closure to this unfortunate event."

In an interview before he resigned, Duddeck admitted there were problems, including two contractors who he said mistakenly billed the city for services and supplies for his sister-in-law's home renovation. Duddeck said he personally paid all those bills and no money left city coffers.

"It should have never happened. I acknowledge that openly and honestly. I want this to be corrected and to move on," Duddeck told the Star Tribune.

Shannon Prather • 651-925-5037