March 10, 2011; Source: Leaf Chronicle | Authorities will never know for sure if a woman accused of stealing $208,000 from a Tennessee social service agency actually committed the crime. JoAnn Johansen, who allegedly helped herself to the money when no one was watching, died in September of complications of cancer.
An audit released earlier this week by the Tennessee Division of Municipal Audit found more than 100 instances over three years in which a person only identified as the former financial officer of the Clarksville-Montgomery County Community Action Agency siphoned cash from its bank accounts and charged what are believed to be personal or non-business expenses to its credit cards. Although the alleged fraud dates back to 2007, it only first came to light in an independent audit conducted last year that identified Johansen as the likely culprit.
State auditors subsequently verified that $205,000 was funneled into a fake online bank account and the rest spent on questionable credit card charges. Dennis Dycus, director of the Division of Municipal Audit, blamed the theft on poor internal controls that allowed the financial officer to sign off on checks and credit card purchases without a supervisor's signature. Even worse, because no one was paying attention to checks being written against its bank account, by July 2010 the agency had an overdraft totaling $15,0000.
Now, more than three years late and $208,000 short, the agency is taking action – which even it agrees is knee-jerk – to prevent similar future thefts. Members of the board of directors now have to sign off on purchases. Says the agency's director, Joel Riddle, "We're trying to make sure we have at least two sets of eyes on every step of the process."—Bruce Trachtenberg