Former employee stole $1.3M in public funds from Spokane Co., officials say

Former employee stole $1.3M in public funds from Spokane Co., officials say

The Washington State Auditor’s Office and local law enforcement are investigating the theft of $1.3 million in public funds from Spokane County’s Risk Management Department.

RMD Director Steve Bartel said a former claims technician with the county stole the funds over a 10-year period; spanning from 2007 to 2016.

Bartel said the suspect was responsible for first party claims, but falsified third party claims, which are filed by citizens against Spokane County alleging county responsibility for their loss.

“She went as far as repeating claim numbers, invalid claim numbers or made up claim numbers,” Bartel said.

Bartel said the suspect used the names of family members and personal acquaintances on those claims and created additional documents with false information to support them.

According to Bartel, the claims technician would pick a day when he was out of the office and bring the files to a backup authorizer, who was the loss control specialist at the time.

“She knew that if I saw the claim and there was a payment to a third-party claimant and not the risk pool making that claim, game over,” said Bartel.

Bartel said the loss control specialist would review the claim file and see the payment voucher, claim numbers, name and W-9 information matched, and would authorize the claim as it appeared to be all in order.

Bartel said the suspect would then take the approved claim and write on top of the voucher “please expedite, will pick up.” After those falsified claims were sent to the Auditor’s Office, the suspect would receive the prepared check and contact those family members portrayed as claimants for the check-cashing process.

According to Bartel, the suspect went as far as to go into the electronic claims information system and change the financial information for these claims so it matched budget expenses. When that information went to the actuary, it was all in tact with the budget, expenditures and annual report.

The county carries employee dishonesty insurance and has reported the theft. Bartel said the insurance company has accepted the claim and is the process of adjusting it. Bartel expects full repayment of the stolen funds minus the $25,000 deductible. It is unclear when those funds will be reimbursed.

Spokane County has put forward new safeguards following the theft. Bartel said he has put in place a new department payment authorization policy that enhances procedures for verifying validity to claims.

Bartel is now the primary authorizer for payment vouchers and has one back-up authorizer. That backup must go through a series of steps, including notifying Bartel, before anything is signed. A monthly review or audit of the month’s payment is also now in place.

The suspect in the incident was an employee with Spokane county for 17 years. She has not yet been taken into custody.

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