The city of Bellevue agrees with the state auditor’s office’s findings that a lack of financial controls allowed its former recreations program coordinator to embezzle more than $117,000 in government funds and has laid out changes to policies and procedures to prevent a repeat offense in the future.
Heather Christoff received a 90-day jail sentence in September for making 81 payments to a phony T-shirt company with seven municipal credit cards belonging to her subordinates and supervisors that were actually going to her own PayPal account between 2012 and 2013.
The purchases made by the 10-year city employee should have raised warning flags sooner, as the parks department already had a normal T-shirt vendor, but the city’s finance department also accepted “inadequate supporting documentation in its audit of credit card transactions,” according to a fraud investigation report issued by the Washington State Auditor’s Office on Thursday.
The city also allowed immediate supervisors to issue municipal credit cards to their subordinates, who were not required to review their own transactions. The report states one of Christoff’s employees wasn’t aware they’d been issued a card until police began investigating Christoff, nor was the department manager aware seasonal employees were being issued procurement cards.
“The Parks & Community Services department did not adequately monitor its budgets,” according to the report. “Upon discovery of the misappropriation, a budget report was generated and there were significant increases in spending for 2011, 2012 and 2013.”
Christoff was charged with 19 counts of second-degree theft, accepting a plea agreement in April to drop 10 of the charges with a 17-month recommended sentence — her 90-day sentence was under a first-time offender waiver. Christoff also agreed to pay $117,410 in restitution to the city of Bellevue.
The city took actions in response to the internal fraud when it first came to light, contracting with a certified public accounting firm for a citywide audit of its procurement card system, which resulted in several policy and procedure changes. The procurement card program is under new administration, with a procurement services manager in charge of reviewing and approving all invoices.
Local firm Clark Nuber also was tapped to provide an audit of the program at least every three years. Changes also include strengthening what defines a public purpose for purchases and additional vetting of third-party payment processors like PayPal to validate businesses receiving public funds.
According to the auditor’s report, the city anticipates completing its evaluation of all municipal finance divisions by the end of the year “to address areas of concern identified by staff in the Internal Control Forum.”
