Audit: Ex-clerk of Sanpete County town misappropriated more than $300K over 9 years

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FAYETTE, Sanpete County — A former town clerk in rural Fayette, Sanpete County, misappropriated over $300,000 of the town's funds during a nine-year period, according to a new audit released Tuesday.

Tracy Kay Mellor, 63, was sentenced to 45 days in jail at the end of November after admitting to three counts of misuse of public money, a third-degree felony. She was allowed to spend Thanksgiving with her family and began her jail sentence shortly after, said deputy Sanpete County attorney Wes Mangum.

Mellor quit her job in January after the town's newly-elected mayor, Brenda Leifson, confronted her over missing checks and later discovered more checks written to a business owned by Mellor and her husband, court documents state.

Leifson asked the state auditor to conduct a review of Fayette's financial practices for the period of February 2009 to February 2018 to discover the scope of the misappropriation.

Auditors learned Mellor misused $303,807 during that period without detection — more than 12 percent of the town's total revenue during that time. They also believe she misappropriated an additional $28,933 that was paid to her, but "passage of time and inadequate documentation" made it impossible to verify, the audit reads.

During those nine years, Mellor issued checks to herself, her husband or their business, issued blank checks or checks made to "cash," made improper reimbursements that were added to her payroll checks and received a new water hook-up for which she did not pay, the audit shows.

The ex-clerk also manipulated Fayette's accounting system, bank reconciliations and other records as well as forged the mayor's or council member's signature on improper checks, the audit shows. State officials believe she altered hundreds of checks during her time as clerk.

"The method used by (Mellor) to alter the check images was quite unsophisticated and easily identifiable," auditors said.

They also believe Mellor may have manipulated bids for the installation of security cameras in the town so that a relative of hers would be awarded the contract.

The former clerk was never detected because town officials did not provide adequate oversight or require documentation that is normally required by Utah law, officials said. The town also failed to separate the duty of town clerk and treasurer — Mellor occupied both roles, auditors said.

“Town officials failed in one of the most basic duties of elected officials, the separation of the duties of clerk and treasurer as required by law. Had they done so, it likely could have prevented or mitigated this theft. I applaud the conscientiousness of Mayor Leifson and the diligence of Sheriff Nielson and his team," auditor John Dougall said in an emailed statement.

Auditors called upon town officials to resign if they were in office prior to Jan. 1, 2018. Though current mayor Leifson was not in office prior to that time, she is currently the center of another misappropriation investigation in the town.

Mellor was originally charged with nine counts of misusing public money dating back nearly a decade. She ultimately pleaded guilty to just the three counts as part of a plea bargain with prosecutors. The statute of limitations expired on the earlier allegations, Mangum said.

As part of her sentencing, Mellor was ordered to repay more than $150,000 that she stole from Fayette. Auditors recommend town officials require that she pay even more.

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