Audit finds verification problems, inconsistent accounting practices in treasurer's office

Co-workers and supervisors in the Beaufort County Treasurer's Office seldom verified check requests or double-checked each other's work, and a former employee accused of stealing $210,000 in public money often came and went from work as she pleased, documents released Wednesday say.

Casaundra White, who faces embezzlement charges and who allegedly was caught but not fired by Treasurer Joy Logan trying to steal $600 in cash from the office, tried to trick her supervisors into thinking that money had never been missing, an investigator says in a Beaufort County Sheriff's Office report. That document was obtained by The Island Packet and The Beaufort Gazette the same day a long-awaited audit of the office was made public by the 14th Circuit Solicitor's Office.

The forensic audit, conducted by professional services firm KPMG, revealed that inconsistent accounting methods, records kept by hand instead of electronically and sometimes-lax oversight of employees in the Treasurer's Office might have led to the disappearance of thousands of dollars more in proceeds from a tax sale last year.

Several of White's co-workers told investigators that their former colleague might have exploited a loophole in department procedures that allowed tax reimbursement checks to be written from public accounts to dummy corporations she set up with her ex-boyfriend, Adrian Coore, according to a Sheriff's Office incident report.

"Hundreds" of similar tax reimbursement checks were sent out every month, and neither the amount or the eligibility of the person or business applying for the refund was ever verified, one employee said.

"As far as someone actually looking into the system to see if that business or person existed, there was no procedure or policy to verify anything like that," the employee said in the report.

In all, 11 checks totaling $210,012 were written from the Treasurer's Office to C&A Researcher Co., Celtic Developments and CNT Researchers, which were the names of dummy companies she allegedly set up with Coore.

County Treasurer Joy Logan said there was little she could have done to stop White.

"I still don't understand how she did what she did," Logan said. "She was doing all of that right under our noses. She was just that good."

It was not the first time White exploited Treasurer's Office policies, according to the report.

One employee told investigators that "White would leave work and sit in her car or go places during the day, but she would not clock out ... No one ever said anything to her about it," the report said.

White's alleged embezzlement scheme was uncovered by accountants from the Atlanta office of KPMG, who were hired by 14th Circuit Solicitor Duffie Stone and County Administrator Gary Kubic to perform a forensic audit of the Treasurer's Office. The audit was requested by Sheriff P.J. Tanner, who claimed that his office's investigation into the missing tax sale proceeds could not move because of shoddy record-keeping in the Treasurer's Office.

A redacted version of the accountants' report to Kubic and Stone was released Wednesday by county attorney Lad Howell. The report was edited by Stone, who said he only removed information pertaining to his case against White and Coore, who were arrested last month and charged with multiple counts of embezzlement and criminal conspiracy.

After reviewing the county's yearly tax sale and two other Treasurer's Office accounts, the accountants reported that most of the record-keeping for the tax sale is done manually and that there is no oversight of cashiers. The audit report said cashiers are responsible for collecting, recording and reconciling payments made during the tax sale with little or no oversight from other office employees.

The audit also raised questions about clothing purchases from Land’s End made in fiscal years 2009 and 2010 totaling $9,641.

Though she had not read the entire 29-page report, Logan said she found the audit report instructive.

"They were very thorough in their research," Logan said. "There's always room for improvement."

Kubic said the report's findings would be used to strengthen county financial controls.

"Self-examination is what we need to improve upon and ensure that we have the structure and procedures in place to protect tax dollars," Kubic said. "We need to incorporate the findings and examine these weaknesses to put in place protections to guarantee that this isn't allowed to happen again."

The $250,000 forensic audit was ordered shortly after Sheriff's Office investigators discovered Logan had failed to report White in 2007 after she was caught stealing $600 from a bank deposit bag.

Logan has told the media White put the money back when confronted by supervisors and was sorry, but the Sheriff's Office report indicates Logan told investigators White put the money back before it was discovered missing.

In the report, the investigator corrects Logan: White didn't show up for work the day after she was "caught and notified of the discrepancy, ... then arrived the next day to work and put the money back into her drawer claiming it was there the entire time." Supervisors were able to prove White added the money back, and White admitted to the theft after the fact, the report said.

When White resigned in 2007, Logan wrote her a recommendation letter, in which White was described as "conscientious" and "a delightful and cheery person" with "excellent people skills."

According to county records, White was re-hired by Logan in 2008. White remained a Treasurer's Office employee until she was fired Feb. 19, when Logan learned the Sheriff's Office intended to charge White for the 2007 theft. She faces a misdemeanor charge of breach of trust with fraudulent intent, which is still pending, according to court records.

Tanner said the audit and interviews with department employees make it clear that poor management is to blame for problems in the Treasurer's Office.

"There is a lack of management in that office," Tanner said. "All of this doesn't inspire a whole lot of confidence in how people are being taxed and the rate they're being taxed. It creates a lot of distrust and that affects all county departments."