Department of Justice focusing on small-amount check alterations

by: HOLLY M. GILL - Deena GossFor the second time in less than four years, the office of the Jefferson County treasurer is under investigation by the Oregon Department of Justice for missing funds.

This time, the DOJ is looking into numerous occasions over the past year when checks received by the treasurer appear to have been altered to show increases of $10 to $30, and cash deposits were decreased by a corresponding amount.

As a result of the investigation, on April 10, Deena Goss, county treasurer since 2003, temporarily signed over the duties of her elected office to Kathie Rohde, county finance director.

In a statement, Goss' attorney Todd Grover, of Bend, wrote, "The Oregon Department of Justice is investigating reported irregularities in Jefferson County's finances. County Treasurer Deena Goss has met with investigators to discuss the matter. Because the investigation concerns the activities of her office, Ms. Goss has placed herself on administrative leave and appointed Kathie Rohde as deputy treasurer in her stead."

The Jefferson County Board of Commissioners had continued their regular April 9 meeting to April 10, when they issued letters to local districts, banks, the state and others regarding the change in duties in the treasurer's office.

In their only public statement, the commission noted, "The Oregon Department of Justice (ODOJ) has initiated a review of public records relating to financial irregularities in the County Treasurer's Office. In fulfilling their fiduciary responsibilities to safeguard taxpayer funds during this review, the Board of County Commissioners has temporarily reassigned certain duties dealing with county finances to different individuals. When the ODOJ is finished with their review, the commissioners will re-evaluate these temporary reassignments."

The investigation got its start when a citizen contacted the county Feb. 27 with a complaint that a check the citizen had written for $26 for a dog license had been altered to $46 and processed by the county's bank for that amount.

The citizen displayed the check, as well as a copy of the original receipt from the county showing that the county had received a $26 check.

During the investigation, county staff reviewed the deposit from Dec. 27, when the license was purchased, and determined that the total deposit for the day of $7,123.70 was correct, but checks were overreported by $20, and cash was underreported by $20.

"This indicates that $20 in cash was missing from the deposit and $20 was purposefully added to the check total by changing the $26 check into a $46 check," County Administrator Jeff Rasmussen wrote in a report. "If the $20 was not absconded, the deposit would not balance when compared to the total of the 'individual deposits' for the day."

After discovering the discrepancy, the county contacted the Oregon Department of Justice, which investigates elected officials.

In the meantime, the county conducted an informal examination of daily reports from Jan. 1, 2013 to Feb. 28, 2014, to look for other discrepancies, and found "an unexplainably high incident rate of cash shortages and check overages."

"When county staff received the first few reports, it indicated that the county treasurer was underreporting cash by overinflating checks and keeping the equivalent amount of cash," Rasmussen wrote. "These incidents cannot be downplayed as 'bookkeeping' errors, because if the overinflation of the check totals were errors, the total deposit would not balance to the total department receipts — the total deposit would be overstated."

So far, county staff has found 13 incidences in which changes have been made, including four "ghost checks" created on the treasurer's final 10-key tape; a $20 10-key error on the deposit tape; seven altered checks; and one incident in which a customer transposed numbers on a check from $6,039.31 to $6,093.31. The check was cashed at the higher amount and the cash deposit was decreased by about the same amount.

The total missing from the 13 incidents is $315.

Rasmussen explained that county departments and offices are required to make a deposit with the treasurer every day that they receive cash or checks, differentiating between the two amounts, and verifying the total cash amount with someone in the office.

The treasurer or another individual in the clerk's office or finance department then verifies the cash, and the deposits are sealed in an envelope with the initials of those who verify the cash and placed in a lock box in the clerk's office.

The county treasurer prepares an adding machine tape that adds the combined cash with the individual checks, and later attaches it to the deposit receipt from the bank.

At the bank, the cash is verified, and checks are bundled and sent off to Portland for processing. If the amounts don't match, the bank creates an under or over ticket, but does not apply a credit or debit to the county's account if the amount is within a certain allowance.

Afterward, the deposit amounts — divided by cash, check, electronic and credit card payments — are posted in a general ledger, which allows individual departments to verify the amount posted.

Earlier investigation

In 2010, Sheriff Jim Adkins asked the Department of Justice to start an investigation into $7,993 which had gone missing from the inmate trust fund over a three-year period.

The investigation focused on Goss, who deposited the money for the sheriff's office. The investigator determined that, "There is insufficient evidence to prove beyond a reasonable doubt that Deena Goss committed any crimes."

"It is highly suspicious that accounting problems arise exclusively when Goss handles cash," the investigator wrote in his report. "This suspicion is fueled by the fact that every time there is a discrepancy regarding cash and Goss, money is missing, as opposed to extra funds."

When the report became public in January 2011, the commission considered discipline for that and violating county investment policy, but after a public meeting in February, ultimately issued an apology to Goss.

In November 2012, Goss was elected to another four-year term as treasurer.

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