The state Auditor's Office says findings from an audit of a southeastern Kentucky city will be referred to the Attorney General's Office and the Department of Revenue.
The office began examining finances at the city of Barbourville last year after council members made a request.
The Lexington Herald-Leader reports results from the special examination were released Tuesday and said multiple problems led to financial mismanagement.
Findings included that the city and some of its boards did not obtain bids before purchasing products and paid more for property than it was worth.
Mayor David Thompson did not return a call from the newspaper, but said in a written response that he accepted the findings and would use the report's recommendations to fix the problems.