Catoosa, OK – Former Catoosa Court Clerk Phyllis Mathews is at the center of an investigative audit requested by the Catoosa City Council and released by State Auditor Steve Burrage Tuesday.
"Ms. Mathews had the access and means to pull off two types of fraud against the city of Catoosa," Burrage said. "In all, it looks like she embezzled more than $48,000 over a three year period. A lack of internal controls and oversight gave her the opportunity and to steal cash received for payment of municipal fines."
Mathews was one of several Catoosa employees arrested in January of this year on federal indictments following an investigation by the Rogers County Drug Task Force of possible illegal drug activities. The former Utilities Clerk and her husband, also a Catoosa city employee, were terminated following interviews with task force investigators.
The Catoosa City Council requested an investigative audit of both the municipal court clerk and utilities clerk offices following the incidents to determine if funds had been misappropriated from either department.
"The key to stopping this sort of waste is putting controls in place to safeguard the assets of the entity," Burrage said. "I had the opportunity to provide training to the Municipal Court Clerk's Association last month. They asked good questions and I hope they'll take the steps necessary to prevent something similar to what has happened in Catoosa from occurring again in the future."
Investigators found discrepancies between computer records for daily cash and check receipts compared with corresponding bank deposits. Mathews is alleged to have employed a cash/check replacement scheme by using payments by check or money order to cover stolen cash payments. The fraudster steals the cash, replaces it with a check for the same amount and, in this case, voids the citation that was paid by check.
An under-receipting scheme is also believed to have been used by Mathews whereby she replaced cash with part of a money order and reduced the amount of the citation equal to the amount of cash stolen. For example, a $77 citation would be dismissed in the official record with the payment of $39 court costs while embezzling the remaining $38 from the cash drawer. The individuals with the citations remain unaware of Mathews' actions.
Mathews is the second municipal employee this year to be implicated in schemes to skim cash payments. A former Maud deputy city clerk appears to have skimmed utility cash payments in excess of $90,000 over the course of several years.
To view the audit and for information on the use of proper internal controls and segregation of duties, visit the State Auditor's website and its publications page at www.sai.ok.gov.