Crime

North Thurston worker misspent thousands in public funds, auditor finds

A crime both small and big businesses are victims of: embezzlement

Ever wonder what embezzlement is? This white collar crime is hurting businesses all over.
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Ever wonder what embezzlement is? This white collar crime is hurting businesses all over.

A former grounds and maintenance supervisor at North Thurston Public Schools spent more than $9,000 on transactions that “did not appear to have a legitimate district purpose” between September 18, 2017 and November 13, 2018, according to a report from the state auditor’s office.

The district has filed a police report with the Lacey Police Department, is seeking retribution, and has implemented internal controls in an effort to prevent something similar from happening again, according to district spokesperson Courtney Schrieve. A spokesperson with the auditor’s office confirmed that the office’s report has been referred to the Thurston County Prosecuting Attorney’s Office.

The supervisor was placed on administrative leave in November 2018, according to the report, because of what Schrieve called a “disciplinary issue.” That prompted the district to hire an outside investigator.

“When we have an upper-level management person put on disciplinary leave, we always bring in an independent investigator,” Schrieve said.

During that investigation, according to the report, the outside investigator found $9,104 in credit card purchases “did not have a district purpose.” The district notified the state auditor’s office in February.

In its review of the investigation, the auditor’s office found $6,519 of purchases to be “misappropriated” ⁠— spent on items that were outside the supervisor’s normal course of business and didn’t have a district purpose or weren’t found at the district. Those items included a personal home heat pump and air handler that cost more than $3,000, a $765 propane water heater, a $478 garage door opener, a $312 gas grill, and $1,151 in tools and supplies.

The remaining $2,584 was spent on tools and supplies the auditor’s office labeled “questionable,” because, while the items were in the normal course of business for the supervisor’s position, it could not determine whether he bought them for business or personal use.

None of the items could be found at the district.

It was discovered that, when leadership was in transition in the department, the supervisor was able to generate work orders and approve his own purchases to complete those work orders, according to the district’s response in the report. The auditor’s office found that internal controls were inadequate, and that the district did not have an effective review process to make sure purchases made by supervisors were “allowable and for district purposes” or have a physical inventory policy or process.

The district’s response reads that it “immediately developed internal controls for purchases using procurement cards,” including a process that requires checking cards in and out using an authorization form and verification of purchases by a “financial services office professional.”

Schrieve said the controls were in place in January.

“By the time the auditor came, we had already started revamping the credit card system,” Schrieve said.

Investigators at the auditor’s office said that it won’t endorse or approve of changes until they have a chance to audit them during the district’s next audit in 2020.

“However, we did let them know that at a high level, those changes sounded like they would help prevent the issues identified in the fraud report from happening again,” spokesperson Kathleen Cooper wrote in an email to The Olympian.

The supervisor who made the purchases stopped working for the district in March, according to the report.

“It’s unfortunate when an employee betrays trust regarding public funds,” Schrieve said. “But it’s definitely something school districts can get stronger from and strengthen their controls and systems.”

Sara Gentzler joined The Olympian in June 2019. She primarily covers Thurston County government and its courts, as well as breaking news. She has a bachelor’s degree in journalism from Creighton University.
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