Repeated misappropriations in Springdale add another case to recent catalog of small-town losses

Today the Office of the Washington State Auditor issued its third fraud investigation report in less than a decade for the town of Springdale, population 300. 

In 2017, the State Auditor’s Office determined the town clerk treasurer had misappropriated $3,412 in town funds between 2012 and 2016. Town leaders at the time chose to keep the clerk treasurer on staff and agreed to a repayment plan. The October 2017 report (PDF) is available online.  

In 2022, the Office determined the mayor at that time was responsible for a debit card and cash receipting misappropriation totaling $15,252 between 2019 and 2020. The local Stevens County Sheriff’s Office had also investigated, and that mayor pled guilty to 15 related charges. The March 2022 report (PDF) is available online. 

Today, the State Auditor’s Office published a new report (PDF) concluding the same clerk treasurer previously investigated misappropriated an additional $51,173 in town funds between 2020 and 2025, and the current mayor misappropriated $4,200.  

“This is becoming too common of a story – a small town that excuses misuse or abuse by people they know, and the losses of public funds multiply,” said State Auditor Pat McCarthy. “Culture matters in government, and a culture of accountability starts at the top.” 

The Stevens County Prosecuting Attorney’s Office filed multiple theft charges against the Springdale clerk treasurer in March of 2025.  

In today’s report, auditors also questioned $656,854 in spending in the same period, some of which was paid to the mayor and clerk treasurer. 

Auditors found the town’s financial processes and record retention were inconsistent, which affected their ability to determine whether many payments were allowable and approved. Today’s report includes details on numerous issues across the town’s financial systems and many questionable transactions.  

Springdale lacked essential financial controls, including having someone other than the mayor or clerk treasurer review the town’s bank statements. Unsupported transactions and questionable debit card purchases appeared on the statements, but no one at the town questioned them.  

The State Auditor’s Office ultimately determined $57,721 in public funds had been misappropriated and questioned an additional $656,854 in payments.  

Springdale’s losses follow major misappropriations in other northeast Washington small towns in recent years. Cusick, population 200, lost $277,570. Metaline, population 175, lost $225,218. Latah, population 170, lost $76,430. 

“Trust is not an internal control,” McCarthy said. “This is a lesson for every government – everyone must be free to ask questions, whether they are elected to the city council or working in city hall.” 

SAO offers multiple resources to help governments prevent fraud in our online Resource Library. Two key items: 

• “Trust, but Verify," (PDF) a guide specifically to help elected official and appointed boards. This guide includes tips for implementing policies and best practices that can help prevent, detect and respond to fraud in local government. 

• “Follow the Money," (PDF) a guide that includes the basics of banking and bank statements; what to do if you spot a red flag; and a 30-minute bank statement review checklist. 

Following its standard procedure, the State Auditor’s Office will also refer its final investigation report on Springdale to the county prosecuting attorney’s office. 

The full report published today is available on the State Auditor’s Office website: Fraud Investigation Report—Town of Springdale (PDF).

Media questions: Assistant Director of Communications Adam Wilson, Adam.Wilson@sao.wa.gov, 564-999-0799.