Auditor investigates missing funds from Dexter Library

DEXTER, IOWA — A special investigation by State Auditor Rob Sand's office has revealed thousands in misspent and missing funds from the small town Dexter library. The audit, requested by library officials, covers the last seven years of service of former library director Mary McColloch. The report reveals that McColloch appears to have diverted city funds to a bank account she had 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 file cabinet from the library. building in his personal vehicle shortly after his resignation. This incident caused library officials to begin revising their books. After reportedly finding evidence of missing funds, the auditor's office was contacted.

The Auditor's Office says it has identified tens of thousands of dollars in mismanaged funds under McColloch's leadership, including:

• $13,589 in undeposited collections
• $4,179 in irregular disbursements
• $3,361 in unjustified disbursements

Most of the missing and undocumented funds can be traced to a separate bank account managed by McColloch, according to the auditor's report. That account – under the name Dexter Community Foundation – was created in 2014 to manage a trust left to the city. According to the auditor's report, McColloch named herself as the sole trustee of the funds when the account was opened.

Over the next seven years, the report said, thousands of dollars intended for the library were deposited into McColloch's Dexter Community Foundation fund, including:

• $5,801 in checks addressed to the library that were deposited into the Dexter Community Foundation bank account
• a $2,500 grant to the library was instead deposited into the Dexter Community Foundation bank account

Additionally, the report also reveals that $5,212 in library donations and money earned from fundraisers was 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 what she was reimbursed for.

The Auditor's Office report raises further questions about how McColloch spent the money she is accused of diverting to her Foundation checking account. Of the $38,722 disbursed from the account between 2015 and 2022, $18,000 was given 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 to the Dallas County District Attorney's Office and the Sheriff's Office.