Nebraska auditor warns of rise in alleged misuse of public funds by local officials

LINCOLN, Neb. —

Nebraska State Auditor Mike Foley is warning of a growing pattern of local government employees using public credit cards and cash for personal expenses.

In a letter released this week, Foley highlighted several cases of alleged financial improprieties involving local governments and public entities across Nebraska, with some investigations dating back to the beginning of the year.

“I’m just so sad because, you know, I was auditor 10, 12 years ago. I didn’t see as much of this happening in local government,” Foley said. “Now it seems to be happening everywhere we look.”

Nebraska has roughly 2,500 political subdivisions, all of which are required to submit audits to the state auditor’s office unless they receive a waiver. Foley’s team looks over some of the entity’s financial records before doling out a waiver.

“We look at the receipts, we say, ‘Wait a second, you bought bacon? Really? On a government credit card? Or you bought an item of clothing or toiletries?'” Foley said.

In his letter, Foley’s office identified five entities it says were involved in financial improprieties: the villages of Merriman, Herman and Alvo, the city of David City, and the Plains Historical Society in Kimball County.

“What can we do to reduce the burden of taxation on the people of Nebraska? This is part of the problem. The money is being stolen in some cases,” Foley said.

One of the cases involved the village of Herman, where Foley’s office alleged the village clerk used a municipal credit card for around $2,000 in personal purchases.

Tom Kegler, chairman of the Herman Village Board, disputed that characterization, saying the charges resulted from companies mistakenly routing purchases to the village credit card after the clerk’s personal card expired.

“All restitution has been made. There’s been no charges brought either by the Nebraska attorney general or the county attorney,” Kegler said.

In David City, Foley’s office alleged the city’s former clerk and treasurer misappropriated more than $5,800.

An attorney representing David City said the employee retired at the end of 2025 and that the city began its own investigation before receiving a letter from Foley’s office in January.

The attorney said David City “fully cooperated with the investigation” and “implemented numerous steps to ensure its financial integrity going forward.”

“These included requiring multiple signers on checks, multiple reviewers of payroll entries, strict limitations on the use of City credit cards and accounts, and checks to avoid improper assistance to family members or friends,” David Levy, the attorney, said. “The City of David City remains committed to upholding the highest standards of integrity and accountability in service to the community.”

Foley said local governments can reduce the risk of financial misconduct by strengthening internal controls, including ensuring that the person authorized to use a government credit card is not the same person responsible for reviewing and approving monthly credit card statements.