Former court clerk pleads not guilty

By GEORGE KUNKE


The maximum penalty that Belcher faces as charged is 10 years in prison and a $20,000 fine.

“Ms. Belcher is charged with one count of theft in the first degree aggravated by the theft being a major economic offense and by Ms. Belcher using her position of trust, confidence, or fiduciary responsibility to facilitate the commission of the theft,” Brent Bottoms of the Pacific County Prosecutors Office told the Herald. “The factors that support the theft being a major economic offense are 1) the large number of people impacted by the theft, 2) the large amount taken, 3) the sophistication or planning involved including that the offense occurred over four years, and 4) that Ms. Belcher used her position of trust, confidence, or fiduciary responsibility to facilitate the commission of the theft.  The last factor not only supports the contention that the theft was a major economic offense but is its own aggravator. 

“We will be seeking restitution in the amount of $15,690.03, which is the amount that the Washington State Patrol’s investigation found having been stolen by Ms. Belcher,” Bottoms said. 

Belcher’s formal arraignment is scheduled for Friday at 1:30 p.m. Belcher’s attorney is David Hatch.

The investigation focused on the Municipal Court receipts, deposits and adjustments to citations within the Judicial Information System (JIS) court officials use to manage cases. The City of South Bend filed a report with the Pacific County Sheriff’s Office and Washington State Patrol to ensure the case is handled by a neutral law enforcement agency. The Pacific County Prosecuting Attorney’s Office was also notified about the case.

The investigation was initially started after a late deposit in May 2012 that was short by $105.

“We began an investigation in June 2012. Our examination of the City’s Municipal Court activities determined $15,690 was misappropriated from the Court between May 2008 and May 2012. We examined 6,958 manual receipts for that period and noted additional differences totaling $1,075. This amount is not included in the misappropriated amount because documentation is insufficient to allow us to determine what caused the differences,” the auditor’s report stated.

Several people called the court wondering why their payments weren’t shown in their receipts.

“After we received the notification, several citizens contacted the City stating their payments were not reflected in their billing statements. When City staff reviewed the manual receipts and deposit information, it determined $250 in cash collected from these individuals had not been properly receipted,” the auditor’s report stated.

Belcher duties were primarily responsible for all aspects of Court activities, including receiving, depositing and posting court payments; receiving mailed payments; setting up payment plans on accounts; sending delinquent notices; posting adjustments to accounts; reparing and delivering weekly deposits to the bank; and reconciling the bank statement to the check register.

The Auditor’s report stated, “We met with the previous Court Clerk in September 2012 to discuss our investigation and to ask about the missing court receipts. She was unable to explain why many manual receipts were not posted to JIS or why many deposits did not agree with receipts. When we started asking her about specific transactions, the Court Clerk declined to answer our questions and left the interview.”

The Auditor’s Office investigation revealed a total of $15,690 of misappropriated funds from the court over the four-year time frame. Those findings were submitted to the Pacific County Prosecutor’s Office in mid-March. Auditor’s sifted through 6,958 manual receipts over a six-month period, which covered Belcher’s four-year employment stint. Another $1,075 was discovered missing, but there wasn’t enough documentation to show that it was misappropriated. The report was issued last January. The court oversees about $108,000 in fines and fees per year. Deposits were not made daily as are required by law, and once a deposit of $3,092 wasn’t made for 28 days.

“Our office identified significant control weaknesses during our regularly scheduled accountability audit. The weakness that contributed the most to the misappropriation was a lack of oversight of the previous Court Clerk’s activities,” the report stated.

As a result of the missing money and subsequent felony charge, the City of South Bend has made changes, including more double-checking of deposits by other employees and a sign-off from the Municipal Court judge for all its reports. Also, all reports will are now being printed and reviewed by the Municipal Court judge, and all court funds are deposited weekly.

Belcher was on paid administrative leave since May 2012 for another unrelated infraction, but has since been terminated. South Bend Clerk/Treasurer Dee Roberts would not say how much money the city paid Belcher while she was on leave, nor would she disclose what Belcher’s other infraction was. “It’s a personnel matter,” Roberts said.

Mayor Kirk Church told the Herald, “I, at this time, have no comment.”

The city plans to recover the stolen money, wages paid on leave and the cost of the investigation.

Below is the City of South Bend’s response to the auditor’s investigation:

“The City respectfully responds to this Audit Finding with the following information:

It is important to note that this was self-reported. Immediately upon finding what appeared to be a misappropriation of funds the State Auditor’s Office was contacted. The employee was put on paid administrative leave while this issue was investigated. The employee remains on paid leave. Besides the misappropriation of $15,690.00 the City will be seeking recovery of wages ($28,000+) as well as the State’s investigation costs of $9,202.00. Additional costs may be incurred as the investigation continues. The City will seek recovery for those expenses as well.

The City has put into place the following policies and procedures to prevent any future misappropriations:

1) The Clerk/Treasurer prepares all deposits and said deposits are double checked and compared to the corresponding receipts for accuracy and then the court generated “batch” report is signed off by another employee prior to it being deposited.

2) ALL adjustments within the court system are reviewed by the Judge and signed off by the court clerk and the Judge.

3) Bank statements are promptly reconciled and signed off by another employee who verifies the accuracy of the information. This also includes an independent spreadsheet that reconciles with the bank and the JIS court system. Everything is printed and attached to the corresponding bank statement.

4) As is noted in item #2 all reports within the court system are printed and reviewed by the Judge and signed off by the court clerk and the judge. A checklist is used to make sure all reports are provided and signed off.

5) All court funds are deposited weekly (Friday) per Ordinance #1444.

 Editor’s Note: For the complete auditor’s report, go to hometowndebate.com and click on front page; it is at the bottom of this story.

 

Fraud Investigation Report

City of South Bend Pacific County

May 1, 2008 through May 31, 2012

INVESTIGATION SUMMARY

On May 30, 2012, the City of South Bend Clerk/Treasurer notified our Office regarding a potential loss of public funds as required by state law. The City had placed the Court Clerk on paid administrative leave on May 18, 2012 for an unrelated issue. While reconciling Municipal Court receipts in the Court Clerk’s absence, the Clerk/Treasurer determined a deposit had been held for three weeks, and when it was made, it was short $105.

After we received the notification, several citizens contacted the City stating their payments were not reflected in their billing statements. When City staff reviewed the manual receipts and deposit information, it determined $250 in cash collected from these individuals had not been properly receipted.

We began an investigation in June 2012. Our examination of the City’s Municipal Court activities determined $15,690 was misappropriated from the Court between May 2008 and May 2012. We examined 6,958 manual receipts for that period and noted additional differences totaling $1,075. This amount is not included in the misappropriated amount because documentation is insufficient to allow us to determine what caused the differences.

The City has filed a report with the Pacific County Sheriff’s Office and Washington State Patrol to ensure the case is handled by a neutral law enforcement agency. The Pacific County Prosecuting Attorney’s Office also has been notified of this case.

The Court Clerk remains on paid administrative leave.

BACKGROUND

The City of South Bend serves approximately 1,635 citizens in Pacific County. The City provides police, parks and recreation, planning and economic development, Municipal Court and other services. For fiscal year 2011, the City operated on approximately $2.5 million.

Our investigation focused on the Municipal Court receipts, deposits and adjustments to citations within the Judicial Information System (JIS) court officials use to manage cases. We identified cash and checks used to pay traffic and criminal fines that were receipted but not deposited or applied to a case.

Current City employees and the previous Court Clerk confirmed during interviews with our Office that the previous Court Clerk was primarily responsible for all aspects of Court activities, including:

 

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Receiving, depositing and posting court payments.

 Receiving mailed payments.

 Setting up payment plans on accounts.

 Sending delinquent notices.

 Posting adjustments to accounts.

 Preparing and delivering weekly deposits to the bank.

 Reconciling the bank statement to the check register.

INVESTIGATION RESULTS

The following provides details of the misappropriation:

Receipting

The City uses manual receipts to record payments made in person, by mail or through the drop box. The previous Court Clerk was responsible for promptly posting the payments to JIS and attaching the system receipt to the corresponding manual receipt.

During our investigation, we noted no corresponding JIS system receipt attached to 142 manual receipts. We accessed JIS to confirm all 142 receipts were not posted to case accounts.

Deposits

The previous Court Clerk was responsible for preparing the deposit. To prepare the deposit, the previous Court Clerk added up all cash on hand and compared the total to the sum of all receipts recorded in the system for the period.

Current City employees and the previous Court Clerk confirmed during interviews that the previous Court Clerk did not discuss instances in which she found discrepancies between receipts recorded in the system and deposits. We found 97 of the 197 deposits made to the City’s Municipal Court bank account during the period were either short or over in cash or check, or both.

Below is a summary of the misappropriated receipts from May 2008 through May 2012.

Total

 

Cash

 

Check

 

Deposits

 

$579,803

 

$ 93,624

 

$486,179

 

Receipts

 

$595,493

 

$108,379

 

$487,114

 

Misappropriation

 

$ 15,690

 

$ 14,755

 

$ 935

 

 

Since the previous Court Clerk had full access and control over court activities with little or no oversight, we examined systems to which she had access to determine if any additional misappropriation occurred. We reviewed payments from the City’s separate Municipal Court account, bail checks, collection agency receipts, and City of Raymond Court receipts because she had worked there part time in early 2009. We did not find any additional misappropriation.

In September 2012, the City sent approximately 300 Municipal Court accounts for a total of $105,000 in owing balances to collections. Our Office sent each of those account holders an account confirmation letter to determine whether more receipts were

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misappropriated. Several citizens contacted the City to pay their balance. However, the confirmation letters resulted in no additional misappropriation.

Interview

We met with the previous Court Clerk in September 2012 to discuss our investigation and to ask about the missing court receipts. She was unable to explain why many manual receipts were not posted to JIS or why many deposits did not agree with receipts.

When we started asking her about specific transactions, the Court Clerk declined to answer our questions and left the interview.

CONTROL WEAKNESSES

Our Office identified significant control weaknesses during our regularly scheduled accountability audit. See Report No. 1008891. The weakness that contributed the most to the misappropriation was a lack of oversight of the previous Court Clerk’s activities.

RECOMMENDATION

We recommend the City strengthen internal controls over Court activities. See Report No. 1008891.

We also recommend the City seek recovery of the misappropriated

$15,690 and related investigation costs of $9,202 from the previous Court Clerk and/or its insurance bonding company, as appropriate. Any compromise or settlement of this claim by the City must be approved in writing by the Attorney General and State Auditor as directed by state law (RCW 43.09.260). Assistant Attorney General Kathryn McLeod is the contact person for the Attorney General’s Office and can be reached at (360) 586-7879 or KathrynM@atg.wa.gov. The contact for the State Auditor’s Office is Jan Jutte, Director of Legal Affairs, who can be reached at (360) 902-0363 or jan.jutte@sao.wa.gov.

CITY’S RESPONSE

The City respectfully responds to this Audit Finding with the following information:

It is important to note that this was self-reported. Immediately upon finding what appeared to be a misappropriation of funds the State Auditor’s Office was contacted. The employee was put on paid administrative leave while this issue was investigated. The employee remains on paid leave. Besides the misappropriation of $15,690.00 the City will be seeking recovery of wages ($28,000+) as well as the State’s investigation costs of $9,202.00. Additional costs may be incurred as the investigation continues. The City will seek recovery for those expenses as well.

The City has put into place the following policies and procedures to prevent any future misappropriations: