Since the death of a Fort Kent town office manager who threw herself off a bridge when she was accused of stealing a half-million dollars in 1997, Maine has schooled municipalities on how to make their money less vulnerable.
High-profile arrests for embezzlement happen around the state once or twice a year with some regularity, but it’s impossible to know just how often employees dip into the public till.
Even with that renewed state outreach, and law that requires cities and towns’ books get annual inspections from outside auditors, officials agree: Financial schemes typically aren’t uncovered unless someone knows to go looking for them.
“To catch embezzlement it is helpful to have a few red flags,” State Auditor Neria Douglass, a former state senator from Auburn, said in an interview this week.
Common signs:
• a person living beyond their means;
• someone who never takes a vacation (sign of control);
• a lack of good record-keeping (it could be purposeful, making irregularities harder to detect);
• an employee with a sick family member or some other financial stress; and
• when a member of the public raises questions that only lead to more questions.
The Norway town manager has said he became suspicious of Debbie Wyman last month after a local businessman brought in a new tax record that didn’t make sense.
Wyman’s been charged with felony theft.
Douglass said she’s not aware of how Maine’s municipal auditing requirements stack up against other states. She recounted a story heard at the National State Auditors meeting of a municipality that only did check-ups every third year. A clerk kept her embezzling to the two off-audit years before she was eventually nabbed.
Since 2001, Maine’s Department of Audit has sent a part-time employee into more than 300 town and city offices to spend one to two days observing practices, check on excise receipts and ultimately report any weaknesses.
Deputy State Auditor Dick Foote said pocketing excise tax is the most prevalent type of municipal embezzling. Partly because it’s often cash, partly because the documentation may not be that great.
In those 300-plus visits, the auditor only stumbled onto fraud once and told police. Foote declined to name the town involved.
“Rule one for any town or entity is to have segregation of duties: having two sets of eyes on financial transactions,” Douglass said. “They don’t want cash hanging around, they don’t even want checks hanging around.”
Heather Hunter, the deputy finance director for the city of Lewiston, teaches treasurers and tax collectors through the Maine Municipal Association how to better mind money.
At her next class in June she’ll spend half a day on preventing fraud and embezzlement.
“You have to learn the systems very well to learn how to circumvent them,” Hunter said.
In addition to the outside city auditor and a separate audit of federal grant money, Hunter and another employee do internal reviews, like checking how many undeposited checks one department might have, or how parking meter receipts stack up against the year before.
Lewiston also requires three signatures to pay a bill.
“The crux of it is you’ve always got somebody checking on somebody else,” said MMA spokesman Michael Starn. “The structure of small towns, in part, there are very few officials, so there they don’t tend to have that type of double-checking.”
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