PORT ANGELES — Three state Auditor’s Office investigators will interview Clallam County Treasurer Judy Scott on Thursday as part of a criminal investigation into the alleged theft of at least $1,500 in public funds by an as-yet unidentified Treasurer’s Office employee.
The 9 a.m. interview at the county courthouse will mark the beginning of a detailed audit of Treasurer’s Office accounting procedures, agency spokeswoman Mindy Chambers said Tuesday.
State Auditor’s Office Director of Special Investigations Jim Brittain, Fraud Manager Jennifer Forsberg and Audit Manager George Amburn will conduct the interview, Chambers said.
The Sheriff’s Department said Monday in a prepared statement that the suspected theft “involves an employee” in Scott’s office, which is staffed by five workers including Scott.
A detective — one of three from the city of Port Angeles and the county Sheriff’s Department who are working the case — may sit in on the interview, Port Angeles Police Chief Terry Gallagher said Tuesday.
Neither Scott nor Gallagher would identify the person under investigation or discuss the amount allegedly stolen.
An exact amount was not known, they and Chambers said, but they would not discuss a range or how they know at least $1,500 was stolen.
It does meet the minimum threshhold for first-degree theft, a felony punishable by at least a year in jail and a $20,000 fine.
“What we are talking about is probable cause to believe a theft had occurred and it was criminal in nature and the police needed to conduct an investigation,” Gallagher said Tuesday.
County Deputy Chief Prosecuting Attorney Mark Nichols said if charges are filed, the case would likely be prosecuted by the state Attorney General’s office “to avoid the appearance of conflict of interest and impropriety” because both the Treasurer’s Office and Prosecuting Attorney’s Office work under the same county umbrella.
Scott said money paid by individuals to the Treasurer’s Office was not part of the investigation.
“Initial findings do not indicate it has anything to do with people’s payments not being processed or real property taxes,” she said.
The audit was prompted by Scott’s May 20 discovery that public funds were missing during a review of Treasurer’s Office financial records.
“A check and balance system is what tripped us to this particular issue,” Scott said.
“It was one of those things, like a loose thread you keep pulling on, and pretty soon it all falls apart.”
Scott said that since the theft was discovered, she has tightened the procedure for verifying checks and cash processed by her office.
Now, transactions are recorded by one person and verified by another.
Before the theft was discovered, they were not verified by a second person, Scott said.
That’s often the case with what Chambers called “misappropriations.”
“What happens when a misappropriation takes place is, the government doesn’t have a system in place to detect this,” she said.
“Typically they include a good procedure on how money is handled and then independent monitoring by someone not invovled in the actual transaction.”
That’s what’s now happening at the Treasurer’s Office.
The Treasurer’s Office processes daily “anywhere from a couple hundred thousand dollars to over a few million,” in cash and in wire transfers from tax districts, title companies, other county departments and individuals Scott said, adding that a security firm takes deposits to the bank.
“We are kind of like a mini-bank,” she said.
Scott’s discovery triggered a police department criminal investigation and Gallagher’s call to the state Auditor’s Office, as required by law.
Gallagher said the investigation he is conducting in conjunction with the county Sheriff’s Department will remain on hold until the audit is complete.
