Treasurer’s Office theft prompts new policies, scrutiny

PORT ANGELES — The Clallam County Treasurer’s Office has adopted a new policy manual aimed at increasing accountability in the wake of the 2009 discovery of at least $617,467 in missing funds.

Treasurer Selinda Barkhuis said she believes the 30-page document completed July 13 significantly improves oversight of cash handling and is a step toward meeting her campaign promise to restore public trust in the office.

“There was no review apparently,” said Barkhuis, who took office in January.

“Now, every single step and every process is either reviewed daily or randomly and regularly.”

Former Treasurer Judy Scott, who lost her job to Barkhuis, said she also required almost daily checking of documents accounting for tax revenue after the thefts were discovered.

Catherine Betts, a Treasurer’s Office cashier from 2001 until May 2009, is currently on trial in Clallam County Superior Court for allegedly stealing the funds.

Betts, who now lives in Shelton, is charged with first-degree theft, money laundering and 19 counts of filing false or fraudulent tax returns with the state Department of Revenue.

The trial began Tuesday with the start of jury selection and is scheduled to last up to 10 days.

The 12 jury members and three alternates selected Wednesday include 10 women and five men.

Betts, 47, is accused of pocketing real estate excise tax — or REET — revenue by exchanging checks with money from the office’s cash drawer and altering documents.

A report into the thefts by the state Auditor’s Office concluded that funds were taken at least as far back as 2004.

As cashier, Betts was responsible for balancing the REET revenue and providing a daily report to the office’s accountant, who in turn compiled monthly reports for the state Department of Revenue.

The amount taken was placed in hidden rows in spreadsheets Betts created, the Auditor’s Office said.

Ann Stallard, the accountant from 2005 until mid-2009, said in court Wednesday that she didn’t check the numbers the cashier provided.

Scott, who served as treasurer from 2005 until 2010, said in court Wednesday that those numbers were supposed to be checked.

Scott in an interview Thursday attributed the limited oversight to an overworked staff.

“Everyone’s plate was full with everything they had to do on a daily basis,” she said. “There wasn’t a lot of time for cross checking that in a perfect world would be wonderful to do.”

Stallard said she discovered the missing rows after Betts allegedly confessed the crime to her in May 2009.

She checked the total sum on the spreadsheet with the visible rows.

The numbers didn’t add up, she said.

Now, Barkhuis said, the spreadsheets are checked randomly at least once a week, and other documents created by the cashier are checked daily.

“Every step and every process has been carefully documented with audit and review proceedings,” she said.

Additionally, the office has stopped the practice of staff sharing passwords and replaced an old number-stamping machine that sometimes didn’t stamp REET affidavits in sequential order.

Because the older machine occasionally double-stamped documents, putting them out of order, Stallard and Scott said they assumed any of the tax affidavits were missing.

Barkhuis said the new machine cost $1,300, and the office used funds saved by not mailing a flier to residents this year explaining how their taxes are used to pay for it.

Scott said Thursday that the office was using the same procedures for more than 20 years when she was treasurer and that she had no reason to think they were faulty.

“I just didn’t have a reason to believe that there was an issue,” she said, adding, “I still have trouble with this.”

But Scott said she was still changing how the office handled payments shortly before the thefts were discovered.

New software was being installed in May 2009 that required tax documents to be scanned as they came over the counter, making it less likely that they could be destroyed, she said.

Although the money has never been recovered, Clallam County accepted a $597,516 insurance settlement to cover the missing funds, not including a $10,000 deductible amount.

Betts’ trial is expected to resume Monday.

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Reporter Tom Callis can be reached at 360-417-3532 or at [email protected]

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