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Auditor's report finds second fault in sheriff's office
The Washington State Auditor’s Office released a second report this week detailing issues within the Kitsap County Sheriff’s Office. This report and new set of issues were discovered during the same audit period as the first report released last week, from May to October 2012.
Auditors performed a surprise cash count on October 24, 2012. They reported finding more than $16,000 in cash and 314 checks, totaling $29,738, that had not been deposited.
The cash and checks were found scattered throughout the office of the fiscal technician in charge of accounts payable and receivable. The technician responsible was the same employee found to be at fault for the misappropriation of more than 1,100 hours of leave for 110 employees in the sheriff’s office.
The employee was moved to the “less complex” role of fiscal technician after the time-keeping discrepancies were uncovered last May, according to the sheriff’s office.
In its response to the auditors’ first report, the sheriff’s office claimed the employee had been purposefully obstructing the county’s ability to discover the mistakes she was making.
Soon after the employee was moved to her new role the sheriff’s office began noticing that payments were not being made in a timely manner, according to Deputy Scott Wilson.
“We were getting second and third notices of billing,” Wilson said, which indicated bills were not being paid in a timely manner.
Wilson later said the discrepancy was not actually discovered by late payments, but by mismatching records.
When it discovered the new issue, the office contacted auditors again and requested help to see how much, if any, money had been misplaced, Wilson said.
Wilson said he could not comment on whether red flags were raised about the employee’s future performance during the transition. He did say, however, that no additional oversight was added by the sheriff’s office to the fiscal technician position when the employee was moved there from her time-keeping role.
The auditors’ report states that “internal controls at the county were not adequate to safeguard public resources.” It lists three weaknesses: not all payments were being receipted, deposits were not made daily and there was inadequate review of deposits to ensure they were being made and matched receipts.
The sheriff’s office, however, disagreed with one of the findings in the auditors’ report. According to Wilson, the issues stemmed solely from the employee and the sheriff’s office had the necessary internal controls in place.
“We don’t necessarily agree with that statement (by the auditors’ office),” Wilson said. “The individual review controls have always been there and were being followed.”
In the sheriff’s office’s written response to the State Auditor, however, it said, “This failure pointed to a need to improve our management controls over our entire process.”
Wilson pointed out that the auditors’ report states the internal control issues reside within the county as a whole, and not necessarily the sheriff’s office.
“The inadequate independent review problem is part of both the sheriff’s office and the county,” Wilson said. “There are issues ongoing all over the place.”
The auditor’s office interviewed the employee in January 2013. According to the report, she told auditors “she did not make the deposits because she did not have enough time to reconcile receipts to payments.”
Auditors found that records supported the employee’s claims except in the case of undeposited payments that did not require reconciling. Auditors said they could not conclusively determine if any loss had occurred because there was a lack of internal controls.
Matt Miller with the auditor’s office said if internal controls had been properly in place, the auditor’s office would have been able to properly track all deposited funds to determine if any fraud had taken place.
As it stands with the information available to them, Miller said auditors found no evidence that fraud had occurred.
The sheriff’s office is in the process of conducting its own internal investigation.
The responsible employee was removed from service and has been at home on paid administrative assignment pending the investigation’s results since October 2012.