Alexandria, Indiana Cannot Document a $492,295 Well Contract

The Indiana State Board of Accounts⧉ -- the state agency that audits every Indiana city, town, and school district -- released a supplemental compliance report on Alexandria, a Madison County city, covering 2023 and 2024.▸ Its sharpest finding: on November 8, 2022, the city awarded a well-drilling contract, "Waterworks Improvements - Well Supply Well Number Four," worth $492,295⧉ -- more than three times the $150,000 threshold at which Indiana Code 36-1-12-4⧉ requires a public board to publish notice, take sealed bids, and award to the lowest responsible bidder. Auditors found no evidence the city ever solicited a quote or a bid, and no minutes showing the Common Council or the Board of Public Works and Safety formally approved the project at all. Competitive bidding exists so a public board, not one vendor, sets the price; skipping it means no one outside that one transaction can say whether $492,295 was a fair price for the well the city got.

The bidding gap wasn't the only documentation missing.▸ When auditors asked for the well project's contract, the city could not produce a signed one⧉ -- only an unsigned copy. A "Notice of Award" for the project exists, but it's signed by the city's Waterworks Superintendent, on a line that calls for the signature of the Board of Public Works and Safety, the body Indiana law actually assigns to award and execute public-works contracts. The State Board of Accounts' recommendation was procedural -- adopt policies matching state contract-execution law -- because a compliance audit documents noncompliance; it doesn't determine whether money was stolen or a price was fair. What it establishes is that, for a contract worth nearly half a million dollars, the paper trail a city is required to keep doesn't exist.

The well was a waterworks project, funded through the city's Water Utility Operating fund.▸ That fund had a zero balance at the end of 2023⧉ and was $81,765 overdrawn by the end of 2024; the Sewage Utility Operating fund went from zero to $179,559 overdrawn over the same year -- a combined $261,324 that two utility accounts weren't supposed to be able to go below at all. Indiana's accounting rules state a fund's cash balance "may not be reduced below zero" and that routinely overdrawn funds are a warning sign serious enough to investigate. The utility funds weren't alone: by year-end 2024 the city had eleven funds running negative, up from three a year earlier, for a combined $900,533 overdrawn -- a 75% jump in a single year. Three of those funds -- Sanitation, a special local-income-tax distribution fund, and the Fire Pension fund -- were already overdrawn the year before, and the same overdrawn-balance finding has now recurred across three prior audit reports without being fixed.

Alexandria also receives money from Indiana's share of the national opioid litigation settlements -- payments drug manufacturers and distributors made to states and localities to fund addiction treatment, prevention, and recovery programs.▸ State law, Indiana Code 4-6-15-4(a)(4)⧉, restricts how that money can be spent: only on "programs of treatment, prevention, and care" that meet best-practice standards set by the settlement itself. Auditors tested ten of the city's Opioid Restricted fund expenditures and found seven weren't allowable⧉ under that law at all -- the report lists payroll, catering expenditures, police equipment, weapons, and ammunition among the disallowed transactions. The restriction exists because settlement money is meant to reach people struggling with addiction, not general city operations; spending it on police gear and catering routes funds earmarked for a public-health crisis into ordinary budget items instead.

The audit's third finding involves the Common Council itself.▸ During 2023 and 2024, three council members conducted small-dollar financial transactions with the city⧉ -- purchases the council approved through its normal claims docket. Under Indiana Code 35-44.1-1-4, a public official who has a financial stake in a city purchase and doesn't disclose it commits a Level 6 felony under subsection (b); the law carves out an exception under subsections (c) and (d) only if the interest is $250 or less across a rolling twelve months and the official files a written disclosure, accepted at a public meeting, within 15 days. Auditors found no such disclosure was ever discussed in council minutes or filed with the State Board of Accounts or the Madison County Circuit Court Clerk for any of the three members' transactions -- meaning the paperwork that would have kept the transactions legal simply wasn't done.

In a December 9, 2025 written response filed with the report, the Alexandria City Council said the disclosure lapse came from a misunderstanding⧉ -- council members believed they only had to sign a conflict-of-interest form once a year, not within 15 days of each transaction -- and acknowledged the practice didn't comply with the law regardless of intent.▸ The council committed to member education on the statute, mandatory recusal and documentation for future related-party votes, a written conflict-of-interest policy, annual disclosures for all elected officials and board members, and having the Clerk-Treasurer screen contract and payment approvals for conflicts before they go to a vote.

The report does not describe a comparable written corrective-action plan for the well contract's missing bids and unsigned paperwork, or for the overdrawn utility funds -- those findings carry only the State Board of Accounts' standard recommendation to adopt compliant policies going forward.▸ Readers who suspect similar noncompliance at an Indiana political subdivision can report it directly to the State Board of Accounts, anonymously if they choose; the agency says it weighs citizen reports when planning future audits.