March 7, 2018
By Paragon News Director Paul Joseph –
A financial audit has turned up alleged fraud and embezzlement at the Western Oklahoma organization that handles road and bridge construction and engineering services to 11 counties. The alleged fraud amounts to approximately $100-thousand dollars.
According to one of Circuit Engineering District Number 7 – or CED7 – board members, the issue of embezzlement began as a result of one of the staffers approaching the executive director saying she might have embezzled or it might be misconstrued that she embezzled money from the organization.
Kurt Hamburger, Custer County District 2 County Commissioner and current CED7 board member – who recently replaced Custer County Commissioner Lyle Miller on the board – says it’s been an interesting first month or so on the board as allegations swirled about the possible misappropriation of money in the organization.
The audit alleges that a long-time staffer committed fraud by embezzlement and misappropriation of money. The audit and report was delivered and accepted Monday by the CED7 board of directors during a CED7 meeting. The audit was performed by FSW&B certified public accounts of Stillwater.
Each of the eleven counties are represented by a county commissioner on the CED7 board of directors. CED7 is headquartered in Clinton.
Johnny Davis, Beckham County’s District 3 Commissioner who sits on the CED7 board with Hamburger says CED7 is the organization that handles all of the responsibilities of roads, bridges and engineering and a whole lot more for each of the eleven counties.
The employee alleged to have committed the crime was terminated last July just before the Oklahoma State Auditor was asked to follow up on an investigative audit. The subsequent audit performed by the state auditor can be used for the filing of criminal charges, if warranted. It hasn’t been completed yet, but could be in a few more weeks. District Attorney Angela Marsee’s office would file felony charges.
Commissioner Davis says CED7 is one of eight districts that was established by law in 1997 and later amended in 1998. The law allows counties to come together as a cooperative and provide efficiencies that are not available to an individual county. The Districts act as a political subdivision of the counties. The Association of County Commissioners of Oklahoma, or ACCO, hires staff to implement the program with funding provided through the State Auditor and Inspector’s office. Today the districts are funded through state and county funds.
The audit and report performed by FSW&B CPAs and turned into the CED7 board was performed as part of CED7’s annual financial audit for the fiscal year ending June of last year. It detailed the suspected embezzlement activity and provided additional detail through exhibits and totals slightly over $99-thousand-300 dollars. It advises that there are more misappropriations which have not been discovered at this point and alleges the employee acted knowingly and with criminal intent.
The FSW&B audit reports that the alleged embezzlement included improper use of a company issued debit card used for personal purposes, over-payments of payroll through unauthorized additions to payroll checks or over-payments and reimbursements recorded to approved vendors that were actually paid to the alleged perpetrator – among other activities.
According to the Clinton Daily News, the district’s annual financial audit showing alleged fraud will be additionally forwarded to the state auditor’s office to be used in its investigative audit currently being prepared.
The board met last Friday in executive session for several hours, meeting again this Monday regarding the issue.
Custer County’s Commissioner Hamburger says the ball is in the court of the state auditor’s office at this point and, if warranted, the findings will be sent to the District Attorney’s office in Arapaho.
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