The forensic audit of Whitefield’s municipal accounts, called for after the former tax collector misappropriated town funds, is complete. Whitefield selectmen approved the investigation of certified fraud examiner Eleanor Chatto at their meeting Tuesday, March 3.
Selectmen also approved the standard financial audit of the 2013-2014 fiscal year, conducted by Mark Roy, of the Berry Talbot Royer accounting firm. In addition to the financial audit, Roy submitted an evaluation of the town’s internal control system conducted by his accounting firm.
Selectmen intend to review proposals for appropriate internal controls to institute at the town office to prevent future misappropriations.
Former Tax Collector Robin White resigned Nov. 6, 2014 after coming forward to admit she had stolen municipal funds. White returned the missing funds a short time later. The forensic audit detailed White’s method of theft and the town’s affected accounts.
According to a statement submitted by White, for approximately two years White had improperly recorded cash and checks received by the town in the town’s accounting system. The method of theft is known as “skimming,” the removal of cash prior to its entry in an accounting system, according to the forensic audit.
“The amounts taken in this scheme grew so large that (White) was unable to repay the cash before certain town accounts would go to lien for non-payment,” the forensic audit stated.
The fraud investigation found 37 instances of cash taken from town accounts, a total of $21,475.05, and 11 instances of cash returned to town accounts, a total of $9,255.68. Investigators also found a surplus of $732 in the town’s bank account that had not been recorded in the accounting system.
The investigation concluded the total amount of Whitefield’s missing funds, at the time of White’s disclosure, was $11,487. White made restitution of $11,323 in November – $164 short of the total misappropriated funds.
“This small difference is considered immaterial and we can conclude that this investigation has sufficiently confirmed the basis of White’s admission and restitution amount,” the report stated.
According to the report submitted by Berry Talbot Royer, Whitefield’s internal controls at the time of theft, which involved comparing receipts recorded in the accounting system with money deposited in the bank account, would have failed to detect the “skimming” or “lapping” scheme perpetrated by White.
The report recommends segregating the duties of town employees so separate individuals account for deposits to the town’s bank account and money recorded in the town’s internal accounting system. Whitefield selectmen previously added an office assistant position to improve the town’s internal controls.
The selectmen agreed to consider the recommendations of the accounting firm and discuss proposals for an internal control procedure that works with the budget and time constraints of the town office in the near future.
The standard financial audit for the 2013-2014 fiscal year, completed after White’s financial misstatements were disclosed, showed Whitefield in a healthy financial position. “I don’t see anything wrong with the balance sheet,” Roy said to the selectmen. “You’re in a good position or at least a comfortable enough position.”
