PORT ANGELES — The State Patrol is recommending that eight criminal charges, including first-degree theft and misappropriation and falsification of accounts, be filed against Port Angeles City Finance Director Yvonne Ziomkowski for allegedly abusing the city’s policy for cashing out unused vacation and sick time.
Ziomkowski, who has denied any intentional wrongdoing and has been on paid administrative leave since the investigation began Jan. 3, allegedly transferred $48,219 worth of leave from 2009 through 2011 into her deferred-compensation account for retirement without seeking approval from City Manager Kent Myers, her supervisor.
Of the $48,219, $29,673 was in excess of city policy.
Myers said the city had sent a letter to Ziomkowski, requiring her to repay the city the $29,673 the State Patrol said she overdrew.
The State Patrol submitted its recommendations for criminal charges to the Kitsap County Prosecuting Attorney’s Office last Friday and provided the city with a copy Tuesday, Myers said.
The criminal charges recommended by the State Patrol are first-degree theft, misappropriation and falsification of accounts, misappropriation by a treasurer, falsely auditing and paying claims, falsely paying claims, wire fraud, exceeding purchase/spending authority per city code and exceeding cash-out limitations per city code.
Wire fraud apparently refers to the electronic transfer of the funds.
Clallam County Prosecuting Attorney Deb Kelly said her office is not handling the case to avoid potential conflicts of interest.
Kitsap County Deputy Prosecuting Attorney Jonathan R. Salamas, who is handling the case, couldn’t be reached for comment.
Ziomkowski, reached by phone Wednesday evening, said she was not aware the State Patrol had recommended criminal charges against her.
“I have no clue what you are even talking about,” she said.
“Nobody talked to me or notified me. Everything I know is from the newspaper.”
Ziomkowski declined to comment further.
In January, Ziomkowski told the Peninsula Daily News that she would repay what she overdrew.
Myers said he has requested a meeting with Ziomkowski on March 1 to discuss disciplinary action. He declined to say what actions would be discussed.
The overpayments were made possible through lax oversight of vacation cash-outs handled by the city Finance Department, the State Patrol said.
“Ziomkowski took advantage of a system, for which she controlled, that lacked oversight and internal controls to benefit her,” the agency said in its report.
“She took advantage of the lack of knowledge of city policy and procedures by the new city manager [Myers] and new payroll specialist [Anne Casad].”
Ziomkowski, who also is president of the Washington Finance Officers Association, told investigators she did not research whether she qualified for the large payouts and instead assumed what she was doing was legal based on overpayments to other employees.
City records show that 10 other employees, including Myers, received cash-outs exceeding city policy since 2003.
City staff have said those overpayments were either approved by a supervisor or were possibly a result of payroll error.
Myers overdrew by 20 hours in 2009. The city manager referred to it as an accident and repaid the leave, worth $1,442, last December.
City policy allows employees to cash out 80 hours of leave a year. An additional 40 hours of leave can be placed toward their retirement if they have not cashed out more than 75 hours that year. Most of the overpayments were small, typically 40 to 80 hours each.
The largest overpayments, with Ziomkowski excluded, went to Fire Chief Dan McKeen — who was paid $11,431 for 237 hours of leave in 2007 — and former Police Chief Tom Riepe — who received $10,271 for 231 hours of leave in 2006.
Those payments were approved by then-City Manager Mike Quinn, who sought to reduce the amount of sick time they had on the books.
Neither is being required to repay the funds since they were approved by a supervisor.
Since 2003, the city has spent $1.4 million compensating employees for unused leave.
Ziomkowski had been compensated for 896 hours, or 112 days, of leave since 2009.
Employees are compensated for their unused leave, which rolls over each year, when their employment with the city ends.
After Ziomkowski was put on leave, Linda Kheriarty was named acting city finance director.
Myers said he notified the City Council about the State Patrol report and criminal recommendations Tuesday in executive session.
He said staff also have been notified.
“It’s a very difficult situation for all of us to deal with,” Myers said.
Myers said he mailed two letters to Ziomkowski on Wednesday — one demanding the repayment of the $29,673 the report said she overdrew and another requesting the March 1 meeting.
If she repays the funds, Ziomkowski would be buying back the leave, about 69 days’ worth, which means she would be eligible to get the funds back when her employment ends, staff have said.
That applies whether she retires or is terminated.
“They don’t forfeit that [leave] for any reason,” Myers said.
Ziomkowski — who receives 8.6 weeks of general leave a year, the most allowed by city policy — had 136.5 days of leave on the books as of Dec. 31.
With an annual salary of $112,547, Ziomkowski would receive $53,726 for the unused leave. (Administrators are compensated for 25 percent of their leave that exceeds 120 days.)
Ziomkowski has worked at the city since 1988 and has served as finance director since 1999. The State Patrol report said she planned to retire at the end of this year.
Myers said no other employee has been implicated in the investigation, adding that he feels the city still has a strong record for accountability.
“We really haven’t had any major impropriety in the past,” he said.
In December, Myers made several changes to the city’s unused-leave cash-out policy to increase oversight, including requiring all cash-outs to be approved by the city manager and human resource manager, and limiting cash-outs to one per year.
Myers said he was satisfied with the thoroughness of the State Patrol’s investigation, which includes six binders of documents.
“This is not an easy thing to do,” he said. “And I feel like we have done the right thing.”
The investigation by the State Patrol began in January after Myers met with the Clallam County prosecutor.
It came two months after a state auditor’s report highlighted limited oversight of the program that allows employees to cash out unused leave.
That report said Ziomkowski overdrew by $28,867, slightly less than the amount the State Patrol discovered.
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Reporter Tom Callis can be reached at 360-417-3532 or at tom.callis@peninsuladailynews.com.