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Comptroller Audit Uncovers Stolen Funds, Altered Records in Chester Co

Press release from the Office of Tennessee Comptroller of the Treasury Justin Wilson; April 16, 2013:

Public money that should have been used to improve water quality and prevent soil erosion in Chester County instead went into the pockets of one of the local conservation district’s employees, an audit by the Comptroller’s Division of Investigations shows.

Stacey Clark, who formerly worked as secretary for the Chester County Soil Conservation District, issued at least 100 district checks to herself or to “cash” over a four-and-a-half year period. Those checks totaled $47,460.

As the only administrative employee at the district, Clark had complete control over the finances and was responsible for collecting money, writing receipts, making bank deposits, preparing and signing checks, receiving bank statements and preparing accounting records. With this unrestricted access to money and records, Clark was able to alter the district’s bank statements to conceal her actions for years.

Clark used a computer to create at least 28 bank statements, on which she omitted and/or altered fraudulent checks, in order to hide what she was doing. Clark also forged a district supervisor’s name on two check stubs as well as the memo line of one check to falsely indicate his authorization of those expenditures. The supervisor later confirmed that his signature was forged and that he had not authorized the checks in question.

Auditors believe the thefts would have been detected sooner if the Chester County Board of Supervisors had provided more oversight of Clark’s actions.

Clark was indicted by the Chester County Grand Jury earlier this year.

“This is yet another example of a publicly-funded agency failing to have adequate safeguards in place to detect fraud,” Comptroller Justin P. Wilson said. “Allowing one employee to handle all aspects of financial transactions creates the potential for mischief. Having appropriate segregation of duties makes it more difficult for one rogue individual to commit fraud.”

To view the audit, which was released today, go to: http://www.comptroller.tn.gov/ia/