PORT ANGELES — The state Auditor’s Office has completed its nine-month investigation into the theft of an estimated $600,000 in public money from the Clallam County Treasurer’s Office — an estimate that increased by $100,000 in just three weeks.
A draft report on the special audit is circulating among four state officials, including an assistant attorney general, for their review, Auditor’s Office Spokeswoman Mindy Chambers said Wednesday.
The estimate of stolen real estate excise taxes was increased from $500,000 in mid-January, when it was divulged in a joint news release by Clallam County Sheriff Bill Benedict and Treasurer Judy Scott.
The theft dates to 2004, and was discovered in May.
The draft report is “still working its way through our editing process,” Chambers said.
The draft report has not yet been referred to the state Attorney General’s Office, after which it will be made public, Chambers said.
Lone suspect
Former Treasurer’s Office cashier Catherine Betts remains the lone suspect in the case, Scott said Wednesday.
Benedict did not return a call for comment on Wednesday.
The lead agency for a criminal investigation would be the Port Angeles Police Department.
Stealing more than $1,500 is first-degree felony theft punishable by up to 10 years in jail and a $10,000 fine.
For months, authorities would say only that more than $1,500 was stolen.
Betts has moved from Port Angeles, but authorities say she not a flight risk.
Betts reportedly confessed May 19 to stealing $1,200.
On June 22, she voluntarily resigned, according to county records, but Scott has said she was fired. Port Angeles lawyer Michelle Ahrens represented Betts “in negotiating her exit from the county,” Ahrens said Wednesday.
“At one time I was representing her,” she said. “I’m not at liberty to talk about whether that is continuing.”
Scott, who is up for election in November, has said she plans to run again.
She said Wednesday she is “appalled” by the amount stolen.
Scott continues to believe Betts was the only person involved in the theft.
She said she has instituted tighter dual controls over the handling of real estate excise taxes, which were under Betts’ purview.
“We are waiting for the final report to know exactly what was going on here,” she added, noting her office is “making sure we are covering everything as best we can to make sure something like this doesn’t happen again.”
Real estate excise taxes, which are paid on the sale of homes and property, are more difficult than other funds to track because actual revenue cannot be projected.
In addition, the thefts were committed during a booming real estate market, Scott said.
“It wasn’t like we knew an amount we had to collect for,” she added.
Chambers, who said she has read portions of the report, would not discuss its details.
“When you get a copy of the report, it will be clear how complicated this was,” she said of how the theft occurred.
Annual audits
Scott has said her office has consistently received clean bills of health from the Auditor’s Office in annual state audits of county finances.
Added Chambers: “We don’t look at every single area every single year when we audit.”
A deeper look into how the thefts escaped discovery by the Auditor’s Office is not being considered, Chambers said.
“We haven’t had a discussion of whether we need to do a review or not,” she said.
“This was a review of what was represented to us by the Treasurer’s Office.”
Compared to this one single incident, the Auditor’s Office investigated 35 cases in 2008 in which $549,000 in public funds were lost, according to Division of Special Investigations 2008 Fraud Report. Just one case statewide involved more than $100,000.
The $600,000 loss is covered by the county’s risk-pool insurance, less $10,000 deductible, so the taxing districts countywide that receive real estate excise tax proceeds will get what they are owed.
But the payout will undoubtedly increase the county’s insurance rates, county Administrator Jim Jones has said.
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Staff writer Paul Gottlieb can be reached at 360-417-3536 or at paul.gottlieb@peninsuladailynews.com.
