SALT LAKE CITY — A former employee of the Utah Schools for the Deaf and Blind spent more than $67,000 in donated and state funds on personal purchases from 2012 to 2016, then took steps to conceal the transactions.
Those and other findings surfaced in a report released Tuesday by the Office of the Utah State Auditor.
The audit found that a former financial analyst used government credit cards on at least 379 transactions for personal expenditures, including $6,674 spent on gift cards, $5,464 on electronics, $4,393 on gasoline, and $657 on cigarettes. The woman also bought groceries, home decorations, pet supplies, holiday presents and clothing using donated and taxpayer money.
The woman failed to process some of the payments on time, resulting in the education office having to pay $1,568 in late fees and interest. And because a significant number of records were missing or apparently altered, auditors believe additional fraudulent purchases were made.
Auditors said there's "no question" the activity was deliberate and nefarious.
"I'm troubled to see somebody as callous as this who would steal funds that were donated to help deaf and blind students," said Utah State Auditor John Dougall. "To me, that just is above and beyond the pale of what we normally see when it comes to theft."
The Utah Schools for the Deaf and Blind administers funding appropriated by the Utah Legislature, as well as money donated for those schools. The office has seen significant leadership turnover in recent years, as well as having its administrators called to assist in interim roles at the Utah State Board of Education and the Utah State Office of Rehabilitation.
Joel Coleman was appointed as superintendent of the Schools for the Deaf and Blind about three years ago and has been seeking to revamp the office's financial policies and practices. During that process, a new employee found evidence of fraud by the former financial analyst over a two-month period, and the office requested an investigation by the state auditor.
Auditors looked at financial records going back four years and found theft was occurring that whole time.
"We think it was likely occurring even earlier than that," said Dougall, who noted the woman worked at the education office for 17 years.
Most of the fraudulent purchases were made using a Sam's Club credit card and a Smith's/Kroger credit card. The woman would use the cards to purchase personal items, then pay off the cards with administrative funds.
The office's donated funding even underwent two previous audits, neither of which found evidence of wrongdoing because of altered documentation, according to Coleman.
"She would falsify the supporting documentation. She fabricated invoices completely," Coleman said. "That flew below the radar of both of the auditors previously. … She was pretty good at what she did, unfortunately."
Inadequate staffing, combined with leadership turnover, limited the separation of financial responsibilities in the office, which also made the woman's activity difficult to detect, he said.
But many of the recommendations from the state auditor's office — including improved oversight of credit cards, independent reconciliation of financial records and policy enforcement — have already been put in place, Coleman said.
"We concurred with all the findings of the auditor. In fact, we've already implemented all those things," he said. "I'm very confident that going forward, this wouldn't be able to happen."
Dougall also noted "significant improvement in their oversight given what had been taking place historically."
The woman was terminated shortly after the fraudulent activity were discovered in April. Coleman said the office is "vigorously" seeking a criminal investigation and has turned evidence over to police and the Utah Attorney General's Office.
"I'm just disgusted," he said. "For the life of me, I can't understand someone who would steal money donated to deaf and blind children. It just makes me sick."