New Gardiner NewsletterCheck out issue 2 that has topics like The Chief's Corner / Fire Commissions' News / CERT Updates / Security Alert / Spring Cleaning / Project Linus / and Happenings . AARP Driver’s Safety Class in Gardiner on June
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New Heart Beat Newsletter
Posting the Linus Heart Beat Newsletter is always one of my favorite tasks. It is great to read about wonderful people doing a wonderful job. The latest newsletter is no exception.
Give your day a good positive jolt and click here to read about the super work being done.
Washington State Auditor's Report concerning JCFD 5
(information submitted by Dr. Elizabeth Van Dyke)
Washington State Auditor’s Office
Special Audit Report
Jefferson County Fire Protection District No. 5
Audit Period
September 1, 2006 through May 31, 2007
Report No. 73735
Issue Date
December 24, 2007
Board of Commissioners
Jefferson County Fire Protection District No. 5
Gardiner, Washington
Special Audit Report
Please find attached our special report on the results of our audit
of the District’s loss of approximately $77,154 due to
misappropriation.
Sincerely,
BRIAN SONNTAG, CGFM
STATE AUDITOR
Washington State Auditor
Brian Sonntag
Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021
(360) 902-0370 (866) 902-3900 TDD Relay (800) 833-6388
FAX (360) 753-0646
http://www.sao.wa.gov
Insurance Building, P.O. Box 40021 Olympia, Washington 98504-0021
(360) 902-0370 TDD Relay (800) 833-6388
Washington State Auditor
Brian Sonntag
Table of Contents
Jefferson County Fire Protection District No. 5
September 1, 2006 through May 31, 2007
Description of the District
Scope and Option
Schedule of Audit Findings and Responses
Washington State Auditor’s Office
1
Description of
the District
Jefferson County Fire Protection District No. 5
September 1, 2006 through May 31, 2007
ABOUT THE DISTRICT
Jefferson County Fire Protection District No. 5 encompasses
approximately 35 square-miles and serves a population of
approximately 900. The District owns and operates two fire stations.
The District is governed by a three-member Board of Commissioners
elected to six year terms. The District has approximately $191,000
in property tax revenue each year.
AUDIT HISTORY
The District is audited annually. Prior audits have reported no
findings. This report includes one finding regarding a
misappropriation of public funds.
ELECTED OFFICIALS
These officials served during the audit period:
Board of Commissioners: George Eims
Bev Horan
Randy Okerman
APPOINTED OFFICIALS
Fire Chief Ben Cooper (through April 2007)
Bob Wilson (effective April 2007)
Secretary Christy Nelson
ADDRESS
District 2000 Old Gardiner Road
Sequim, WA 98382
(360) 797-7711
Washington State Auditor’s Office
2
Scope
and Opinion
Jefferson County Fire Protection District No. 5
September 1, 2006 through May 31, 2007
This report contains the results of our audit at Jefferson County
Fire Protection District No. 5 for the period September 1, 2006,
through May 31, 2007. The purpose of the audit was to determine if
cash disbursements were made for official public purposes.
Our audit was performed under the authority of Revised Code of
Washington 43.09.260 and included tests we considered necessary
under the circumstances.
In our opinion, as detailed in the following Schedule of Audit
Findings and Responses, the former Secretary circumvented the
District’s internal controls over cash disbursements and
misappropriated at least $77,153.59 in public funds from the
District between September 1, 2006, and May 31, 2007. We noted an
additional $10, 905.71 in suspected losses.
Washington State Auditor’s Office
3
Schedule of
Audit Findings and Responses
Jefferson County Fire Protection District No. 5
January 1, 2006 through May 31, 2007
1. Public funds were misappropriated, internal controls were
circumvented
and accounting records were falsified and removed to conceal a
misappropriation.
Description of Condition
On May 18, 2007, the Jefferson County Fire Protection District 5
Chief notified our Office of a potential misappropriation of public
funds. We met with the District on May 22, 2007, and immediately
began a special investigation to determine the extent of the loss.
We determined that between September 2006 and May 18, 2007, the
District Secretary made at least $77,153.59 in unauthorized payments
to herself, her relatives and others. We also found cash advances
and charges to District credit cards of which the District had no
knowledge. The Secretary falsified accounting records and removed
records from the District in an attempt to conceal this activity.
We were able to reconstruct most of the District’s expenditure
records for September 2006 to May 2007 by collecting cancelled
checks, statements from banks, statements and supporting
documentation from credit card companies, redeemed warrants and
reports from the Jefferson County Auditor’s Office and Treasurer’s
Office.
No federal funds were involved in this case. The misappropriation
occurred as follows:
Unauthorized payments from checking accounts $48,199.00
Unauthorized credit card charges $22,620.90
Other unauthorized payments $ 2,933.69
Unauthorized payroll advances $ 3,400.00
Total misappropriation $77,153.59
Additional suspected losses $10,905.71
Unauthorized payments from checking accounts
We reviewed cancelled checks and bank statements. We found the
Secretary made warrants payable to the District checking accounts
and then issued checks to herself or for her benefit.
District Commissioners did not review supporting documentation for
vouchers to verify payments were for a valid public purpose before
they approved them. The following comprise the $48,199
misappropriation:
• The Secretary processed $4,554.40 in advance travel checks to
herself between March 2, 2007, and May 15, 2007. We found no
supporting documentation for these
payments. The Secretary did not travel on behalf of the District.
The checks were signed by the Secretary or had the former Fire
Chief’s name signed.
• The Secretary processed $11,057.02 in unauthorized petty cash
checks between
September 19, 2006, and April 25, 2007. Of this, the Secretary paid
$6,014.52 to herself Washington State Auditor’s Office or on her
behalf, including $300 for child care. She paid $4,787.50 to
relatives. In addition, the District paid $255 in service charges
and insufficient funds fees associated with this account.
• The Secretary processed $29,002.58 in excess payroll to herself
between October 1, 2006, and May 15, 2007.
o The Secretary’s authorized payroll was $1,344 per month for August
29, 2006, to
December 31, 2006. During this period the Secretary paid herself
$1,542.38 per month, resulting in an overpayment of $1,442.81.
o The Secretary’s authorized payroll for January 1, 2007, through
May 15, 2007, was $8,745.97 or $1,943.55 per month. From January 1,
2007, through May 15,
2007, the Secretary paid herself totaling $35,065.15 or $27,559.77
in excess compensation.
• In addition we found two payroll checks totaling $3,555 issued to
a relative of the
Secretary and a $30 check written from the payroll account to a
local restaurant by the Secretary.
• We also noted a payroll check for $1,000 for which we found no
supporting
documentation as to the payee or purpose and an $800 check that
cleared the bank. The bank was not able to provide us with a copy of
the $800 check. We have not included these in the total known to be
misappropriated; instead they are reported in the suspected loss
total.
Unauthorized credit card charges
We found purchases made on four credit cards. District officials
knew of only one District credit card. One credit card was opened in
the name of the prior District secretary and the statement was
mailed to a post office box the District was not aware of. One
credit card was in a Commissioner’s name and two were in the name of
the Fire District.
The total unauthorized charges on these accounts totaled $22,620.90.
We noted $12,595.60 in cash advances at a casino and local banks. We
noted a $341.78 payment on the Secretary’s utility account; $389.68
in charges to various attractions in Seattle including the Space
Needle and the Seattle Aquarium and $900.44 in charges at retail
stores. The remaining $8,393.40 includes finance charges, late fees,
cash advance fees, restaurants, hotels, gas stations and other
non-District-related charges.
We also noted $9,105.71 was spent using checks drawn on the credit
card accounts the District was unaware of. We were unable to find
corresponding deposits for these checks in the District’s bank
accounts and we were unable to obtain copies of these checks to see
who initiated them.
We have not included this in the total known to be misappropriated;
instead, it is reported in the suspected loss total.
Other unauthorized payments
The Secretary charged $2,933.69 to the District for cellular
telephones and service.
Unauthorized payroll advances
We also noted the Secretary received payroll advances in September,
October, November and December 2006 totaling $3,400 that were not
deducted from her paycheck at month’s end.
Washington State Auditor’s Office
Cause of Condition
The Secretary circumvented District policies and procedures. No one
at the District monitored the Secretary’s work to ensure all
payments were properly authorized and for official public purposes.
In addition, these internal control weaknesses allowed this loss to
occur and not be detected in a timely manner:
• The District Board signed voucher registers but did not review
supporting documentation.
• The District Secretary had complete control of the checking
accounts, including making deposits, writing checks and reconciling.
Effect of Condition
The District Secretary misappropriated at least $77,153.59 in public
funds for personal benefit and deprived the District of the use of
these funds for legitimate public purposes. We found an additional
$10,905.71 in payments in which we could not determine the public
purpose.
Recommendation
We refer this matter to the Jefferson County Prosecuting Attorney’s
Office for any action deemed appropriate.
We recommend the District Board seek recovery of the $77,153.59 in
misappropriated public funds and $7,850 of related
audit/investigation costs from the District Secretary and/or its
insurance bonding company, as appropriate. Any compromise or
settlement of this claim must be approved in writing by the Attorney
General and State Auditor as directed by RCW 43.09.260.
Assistant Attorney General Cindy Evans is the contact person for the
Attorney General’s Office and she can be reached at (360) 586-2837
or cindye@atg.wa.gov. The
contact for the State
Auditor’s Office is Jan Jutte, Director of Legal Affairs, and she
can be reached at (360) 902-0363 or
juttej@sao.wa.gov.
Insurance coverage for District employees is as follows:
Insurance Company: VFIS
Policy Number: VFIS-TR-0400410-2/000
Policy Type: Crime
Amount of Coverage: $50,000
Coverage Period: June 1, 2006 – June 1, 2007
We also recommend the District:
• Ensure all restitution agreements associated with losses of public
funds are approved by the State Auditor’s Office and the Attorney
General’s Office pursuant to state law (RCW 43.09.260).
• Establish, follow and monitor an effective system of internal
controls designed to ensure the protection of public assets from
loss.
• Ensure public records are safeguarded to ensure retention.
Washington State Auditor’s Office
District’s Response
The Fire Commissioners, Secretary and the Fire Chief (Fire District)
have initiated better management controls and are reviewing source
documents to safeguard the public funds entrusted to our agency by
the citizens of our Fire District.
Auditor’s Remarks
We thank the District for its response. We will follow up on this
issue in the next audit.
Applicable Laws and Regulations
RCW 43.09.260 Local government accounting--Examination of local
governments--Reports--
Action by attorney general, states in part:
A copy of any report containing findings of noncompliance with state
law shall be
transmitted to the attorney general. If any such report discloses
malfeasance,
misfeasance, or nonfeasance in office on the part of any public
officer or employee, within thirty days from the receipt of his or
her copy of the report, the attorney general shall institute, in the
proper county, such legal action as is proper in the premises by
civil process and prosecute the same to final determination to carry
into effect the findings of the examination.
It shall be unlawful for any local government or the responsible
head thereof, to make a settlement or compromise of any claim
arising out of such malfeasance,
misfeasance, or nonfeasance, or any action commenced therefore, or
for any court to enter upon any compromise or settlement of such
action, without the written approval and consent of the attorney
general and the state auditor.
RCW 43.09.240, Local government accounting–Public officers and
employees–Duty to account and report–Removal from office–Deposit of
collections, states:
Every public officer and employee of a local government shall keep
all accounts of his or her office in the form prescribed and make
all reports required by the state auditor. Any public officer or
employee who refuses or willfully neglects to perform such duties
shall be subject to removal from office in an appropriate proceeding
for that purpose brought by the attorney general or by any
prosecuting attorney.
Every public officer and employee, whose duty it is to collect or
receive payments due or for the use of the public shall deposit such
moneys collected or received by him or her with the treasurer of the
local government once every twenty-four consecutive hours. The
treasurer may in his or her discretion grant an exception where such
daily transfers would not be administratively practical or feasible
as long as the treasurer has received a written request from the
department, district, or agency, and where the department, district,
or agency certifies that the money is held with proper safekeeping
and that the entity carries out proper theft protection to reduce
risk of loss of funds.
Exceptions granted by the treasurer shall state the frequency
with which deposits are required as long as no exception exceeds a
time period greater than one deposit per week. In case a public
officer or employee collects or receives funds for the account of a
local government of which he or she is an officer or employee, the
treasurer shall, by
Friday of each week, pay to the proper officer of the local
government for the account of which the collection was made or
payment received, the full amount collected or received during the
current week for the account of the district.
Washington State Auditor’s Office
The Budgeting, Accounting and Reporting System (BARS) manual for
Fire Districts requires that the District implement policies and
procedures to ensure compliance with at least the following:
Part 3. Accounting, Chapter 1. Internal Control, states in part:
This section contains the standards to be followed by fire districts
in establishing and maintaining systems of internal control. This is
meant to provide the “theory” behind setting up a good internal
control system. All major systems should be evaluated against these
standards. Some specific examples are cited in later chapters within
Part 3 of this manual. Effective internal control systems ensure
that the following objectives are achieved:
1) Transactions are properly accounted for to:
a) Permit the preparation of reliable financial statements and
statistical reports;
b) Maintain accountability over assets; and
c) Demonstrate compliance with laws, regulations, and other
compliance requirements;
2) Transactions are executed in compliance with applicable laws,
regulations, and the provisions of contracts or agreements.
3) Funds, property, and other assets are safeguarded against waste,
loss, unauthorized use or disposition, and misappropriation.
The following concept of internal control is useful in understanding
and applying the standards set forth and discussed on succeeding
pages:
An internal control system consists of the plan of organization, and
methods and procedures adopted by the fire district board to ensure
that resource use is consistent with laws, regulations, and
policies; that resources are safeguarded against waste, loss, and
misuse; and that reliable data are obtained, maintained, and fairly
disclosed in reports.
The ultimate responsibility for good internal controls rests with
management. In order to ensure the proper conduct of fire district
business, management must periodically review its internal control
systems . . .
5) Control Techniques. Internal control techniques are the
mechanisms by which control objectives are effectively and
efficiently achieved.
Techniques include, but are not limited to, such things as specific
policies, procedures, plans of organization (including separation of
duties), and physical arrangements (such as locks and fire alarms).
Specific Standards:
1) Documentation. Internal control systems and all transactions and
other significant events are to be clearly documented, and the
documentation is to be readily available for examination.
2) Recording of Transactions and Events. Transactions and other
significant events are to be properly classified and promptly
recorded.
3) Execution of Transactions and Events. Transactions and other
significant events are to be authorized and executed only by persons
acting within the scope of their authority.
4) Separation of Duties. Key duties and responsibilities in
authorizing, processing, recording, and reviewing transactions
should be separated among individuals. When one individual performs
two or more of these types of duties, the district should evaluate
whether the duties can be separated, and if not, then regular
management review is required to ensure the system weakness is not
being abused.
5) Supervision. Qualified and continuous supervision is to be
provided to ensure that internal control objectives are achieved.
6) Access and Accountability for Resources. Access to resources and
records is to be limited to authorized individuals, and
accountability for the custody and use of resources is to be
assigned and maintained.
Part 3, Accounting, Chapter 3. Travel (Chapter 42.24 RCW), states in
part:
Travel expenses include amounts paid for use of personal
automobiles, other transportation, and actual expenses or
reimbursement in lieu of actual expenses for meals, lodging, and
related items. The board of commissioners of each fire district must
pass a resolution establishing rules and regulations regarding
reimbursement of travel expenses for district officials and
employees. The resolution should discuss the district's policy on
tipping, its definition of when “travel status” begins and ends,
identify their expectations of what normal allowable travel expenses
would be, and it should prohibit reimbursement for personal expenses
and entertainment. If a fire district utilizes credit cards for
travel related expenses, the board must pass a resolution
establishing rules and
regulations that satisfy provisions of Chapter 42.24 RCW, including:
1) Limiting the use of credit cards to authorized travel expenses
only.
2) Submission of a fully itemized travel expense voucher by the
employee or district board member.
3) Settlement by the employee or board member within 30 days of the
billing date.
(SAO FACTS.DOC - Rev. 07/07)
A BOUT THE STATE AUDITOR'S OFFICE
The State Auditor's Office is established in the state's
Constitution and is part of the executive branch of state
government. The State Auditor is elected by the citizens of
Washington and serves four-year terms.
Our mission is to work in cooperation with our audit clients and
citizens as an advocate for government accountability. As an elected
agency, the State Auditor's Office has the independence necessary to
objectively perform audits and investigations. Our audits are
designed to comply with professional standards as well as to satisfy
the requirements of federal, state, and local laws.
The State Auditor's Office has 300 employees who are located around
the state to deliver our services effectively and efficiently.
Approximately 65 percent of our staff are certified public
accountants or hold other certifications and advanced degrees.
Our regular audits look at financial information and compliance with
state, federal and local laws on the part of all local governments,
including schools, and all state agencies, including institutions of
higher education. We also perform fraud and whistleblower
investigations. In addition, we have the authority to conduct
performance audits of state agencies and local governments.
The results of our audits are widely distributed through a variety
of reports, which are available on our Web site. We continue to
refine our reporting efforts to ensure the results of our audits are
useful and understandable.
We take our role as partners in accountability seriously. We provide
training and technical assistance to governments and have an
extensive program to coordinate audit efficiency and to ensure
high-quality audits.
State Auditor Brian Sonntag, CGFM
Chief of Staff Ted Rutt
Chief Policy Advisor Jerry Pugnetti
Director of Administration Doug Cochran
Director of Audit Chuck Pfeil, CPA
Director of Performance Audit Linda Long, CPA, CGFM
Director of Special Investigations Jim Brittain, CPA
Director for Legal Affairs Jan Jutte
Local Government Liaison Mike Murphy
Communications Director Mindy Chambers
Public Records Officer Mary Leider
Main number (360) 902-0370
Toll-free hotline for government efficiency (866) 902-3900
Web Site www.sao.wa.gov
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Don't Call Me
submitted by Diane Movius-Martin
A most excellent reminder
A little reminder that I have found very useful. Here is the number or e-mail address for the federal government "National Do-Not-Call Registry". It's good for five years. It may be time to do it again for another five years.
The number is 888-382-1222 if you want to call or log on to www.donotcall.gov
A Short Trip Down Memory Lane
How about taking a look at Gardiner back when it had a general store and post office? Take a look at some excellent nostalgia submitted by Diane Movius-Martin .
Gardiner Garden Club History
For over 50 years the Gardiner Garden Club has been working to help create and maintain the beauty of the Gardiner area. Thanks to some judicious record keeping and the Port Townsend Leader we now have quite a few newspaper clippings on the web site. Take some time to view the new Gardiner Garden Club History segment of the Gardiner web.
Did You Know
After Mr. Gardner finished logging his homestead, he planted apple orchards and loganberry fields. A small snapshot gathered by Helen Dent from Gardner family members, shows an acre and a half field of berries between the barn and the Gardner home (the same barn and home still exist, only more ornate). The yield from that field was 13,416 pounds of berries.
(Click picture to see a larger version)
Diane Movius-Martin has submitted an excellent addition to the Gardiner School Days page. It is the names on the back of one of the Gardiner School pictures. Scroll down to the pictures and check it out and see who you or one of your relatives might have know.
Remember When 1950
Thanks to Diane Movius-Martin for submitting some articles from days gone by, 1950 to be exact. Note the excitement over being able to watch television at the local store. Click to go back to 1950
Gardiner History
One part of becoming a geezer I never anticipated was a growing interest in history, or more to the point lost history. Once the history is lost it can never be reclaimed. This applies to nations, communities, families, and individuals. It is to bad that each person does not have the time to write their own history, but this is fodder for a whole different venue.
In this case the focus is on Gardiner history. To that end I have added a new menu item on the left that will take you to stories about Gardiner history. As always if you have anything to submit please send it to tzcarey @ embarqmail.com.
Did You Know
submitted by R. Minty
Did you know that in Feb. 1953 the School District Superintendent Carder and the School Board wanted to tear down the Gardiner School but a strong stand by the Gardiner Women's Club saved the day. That same year, the Ladies elected to join the Washington State Federation of Garden Clubs and thus became the Gardiner Garden Club, as well as getting a sink installed with drain boards from the School District. (From the Minutes of the Gardiner Women's Club 1953).
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