State audit finds bookkeeper misappropriated funds from Yakima-area drainage districts

Several irrigation and drainage districts near Yakima hired the same bookkeeper who misappropriated public funds through a variety of schemes, a state audit found.

A fraud investigation report identified a total of $9,151 in misappropriations and $17,706 in questionable disbursements between June 2019 and June 2023. The report was released March 11.

The seven districts affected by misappropriations are Yakima County drainage districts 7, 11, 12, 16 and 28, along with the Union Gap and Wenas irrigation districts, officials said. The investigation period was from Jan. 1, 2017, through Sept. 30, 2023.

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"Any loss of public funds is a serious matter, but the smallest governments can ill afford the expense of a loss and the resulting investigation. The total spending questioned in our report is greater than the annual revenue of four of the irrigation districts involved," State Auditor Pat McCarthy said in a news release.

The bookkeeper is not identified in the report. The state auditor's office refers all fraud investigation reports to the county prosecuting attorney. 

Investigators found the bookkeeper was allowed to approve and modify payments to herself, leading to a variety of misappropriations and questionable payments over four years. Examples include:

• Charging a district for expenses that exceeded the approved budget for her services;

• Processing payroll claims for the total amount of her annual contract within six months;

• Claiming a total of 24 hours worked in the same day, across three districts;

• Cashing out sick leave, which was not allowed by district policy, and

• Billing multiple districts for the same office supplies, resulting in reimbursement higher than the actual costs of the supplies.

State auditors made recommendations related to the investigation. "I appreciate the commitment of those district commissioners who pledged to accept our recommendations and improve their controls," McCarthy said.

It's unusual to see a single fraud report involving seven different local governments, she said.

"However, the root problem is far too familiar, especially within small governments — a lack of strong financial controls, and of appropriate checks and balances," McCarthy said.