Top five fraud reports for 2024: A roundup of notable investigations published this year

Misappropriation of public funds is harmful to everyone, and our Office takes investigating these cases seriously. Some of the most significant fraud investigations in our Office’s history have been brought to light just this year, in fact, and Fraud Awareness Week seemed like the perfect time to revisit them. 

These cases not only speak to the importance of government accountability and transparency, but also to the value of the resources we offer that can help governments prevent fraud in their organizations. We’ve highlighted a few guides at the end of this article. 

The small city of Morton (published August 2024) 

Our Office found the clerk-treasurer of this city of 1,100 residents in Lewis County misappropriated more than $900,000 in public funds over nearly a decade, despite warning signs that improper activity was occurring, including our 2015 report questioning payments. 

Our 2024 report concluded the clerk-treasurer was solely responsible for processing payments, writing checks and reconciling bank accounts. Exploiting the lack of independent reviews of her work, the clerk-treasurer had hid her activities since 2013, including taking customer cash payments that she did not deposit at the bank and writing checks to herself, then recording them as payments to legitimate vendors. 

Discover more details in our blog post, which also includes a separate fraud investigation report regarding Morton’s former police chief’s credit card purchases. 

The town of Cusick (published May 2024) 

The story of this small town goes back five years when our Office advised the town it had inadequate controls over its payroll and credit cards. More recently, leading up to our published report, the town’s former clerk was indicted on multiple bank fraud charges and its bank account dwindled from more than $233,000 to just $249. 

Had the small government followed its audit recommendations several years ago, it likely could have avoided more recent, and much larger, losses. 

Find out more about what happened in Cusick and why it’s a lesson local governments need to learn about the importance of financial checks and balances, having the proper internal controls, and the need to heed repeated audit recommendations from our Office. 

Yakima-area irrigation and drainage districts (published March 2024) 

Seven irrigation and drainage districts in Yakima County hired the same bookkeeper who misappropriated public funds through a variety of schemes, according to our published report. 

Auditors identified a total of $9,151 in misappropriations and $17,706 in questionable disbursements between June 2019 and June 2023, as the bookkeeper was allowed to approve and modify payments to herself. Examples include claiming a total of 24 hours worked in the same day across three districts, and cashing out sick leave, which was not allowed by district policy. 

Our blog post includes details on other ways this bookkeeper misappropriated public funds, and includes a link to our full report. 

Bellevue College (published May 2024) 

The college determined that its Director of Food Services and Events used a school-issued purchase card to make purchases and then refunded them for personal gain. Our subsequent investigation revealed a total of $31,150 in misappropriation between 2017 and 2021. In addition, we identified questionable purchases, refunds and other activities totaling more than $12,000 for the same period. 

The college did not have a process in place to monitor or review activity on its travel cards, which played a key part in the employee’s misappropriations. Read more in our published report including details of our investigation. 

The Office of Administrative Hearings (published July 2024) 

Our Office found that an agency employee misappropriated $878,115 between 2019 and 2023 through questionable credit card purchases, making this the largest internal misappropriation in a Washington state agency in at least the last 15 years. 

Auditors used a new data analysis tool to identify questionable transactions, which ultimately led to us discovering the misappropriation. “This report demonstrates the power of our improving analytical tools and the continued importance of having our outside, professional auditors review government finances,” said State Auditor Pat McCarthy. “It should serve as a reminder to all government managers – be vigilant in your oversight. Trust, but verify.” 

Our blog post includes a summary of this case and a link to our full report. 

Key resources to help your government prevent fraud 

In addition to investigating misappropriations, the State Auditor’s Office offers dozens of resources to help governments safeguard public resources and meet accounting requirements. Among them: 

• A key guide, Trust, But Verify, shows elected officials and other oversight personnel how to establish effective controls and prevent fraud. 

• In a widely read blog post, we explain why reviewing bank statements is important, and what government leaders should look for in this simple document review. 

• Another resource, Segregation of Duties, explains how accounting departments of all sizes can implement appropriate reviews and controls. 

• The Open Public Meetings Act (OPMA) was enacted to make the conduct of government more accessible and open to the public, which plays a key role in fraud prevention. Our OPMA guides, best practices and checklists are designed to help governments comply this legislation.