A prosecutor said Wednesday that she has asked the Arkansas State Police to investigate audit findings that two former employees of a regional water agency made fraudulent credit-card purchases totaling almost $50,000.
White County Prosecuting Attorney Rebecca Reed McCoy said she sent the letter of request Wednesday.
Neither former employee of the Southeast White County Water Association Public Water Authority -- Diana Woodle, its former general manager, or Brandon Johnson, its service technician -- has been charged with a crime, McCoy said.
[Click here to read the agency's audited financial statements. ]
A May 10 statement by the authority's board said Woodle delivered a cashier's check for $25,944.06 to the authority April 21 to pay back the charges at issue. On April 5, Johnson gave the authority a promissory note for $23,168 and agreed to repay that sum on or before Aug. 1, the statement said. Johnson also promised to pay interest.
The utility serves water customers in rural communities in the southeastern portion of White County, the authority board's attorney, Heartsill Ragon, said Wednesday.
Ragon said new controls have been put in place since learning of the questionable charges.
"We now have a board member who signs off on and reviews all checks," Ragon said. "We have dramatically changed up our use of company credit-card procedures. We have done everything we can think of."
Woodle resigned April 7, and the authority's board terminated Johnson's employment then, according to a May 10 statement from the authority.
The authority briefly retained Woodle, who had worked there 30 years, as an independent contractor to train other employees to avoid any interruption of operations, the statement said.
Beforehand, the board withdrew Woodle's signature rights on its bank accounts and closed company credit-card accounts at the time. In a statement, the authority said her activities during the temporary job were supervised carefully by others until it ended May 2.
The Arkansas Legislative Audit has posted the audit report -- prepared by Przybysz & Associates, an accounting firm in Fort Smith -- on the state agency's website, arklegaudit.gov.
"Two individuals made fraudulent credit card purchases during the year [2015] amounting in total to $42,569, which is recorded as an employee receivable for 2015," the report said. "The two individuals have already agreed to pay back the total amount of the fraudulent charges. Fraudulent charges made in the subsequent year amounted to $6,543 which the two individuals have also agreed to pay back."
The audit suggested that the agency's "duties relating to credit card purchases should be separated as much as possible, and alternative controls should be used to compensate for the lack of separation of duties."
"The governing board should also provide some of these controls; including, but not limited to signing checks and reviewing credit card statements," the audit added.
The authority said its insurance agency had indicated the company has $350,000 in employee fidelity and theft insurance.
KATV in Little Rock has reported previously that among the charges that were at least questionable were $519 at Starbucks, more than $4,400 to the QVC television shopping network, $4,100 to Harding Academy and almost $2,700 related to horses or veterinary bills.
State Desk on 06/16/2016