WCESD #4: Employee used payroll system to take public funds
By SHELLY WILKISON
Liberty Hill fire officials say all of the checks and balances were in place, but an employee was still able to steal thousands of dollars in public funds through a web-based payroll system.
Tiffany Wells, who worked as the administrative assistant for Williamson County Emergency Services District #4 since October 2012, was terminated Feb. 16 after a 2014 audit revealed discrepancies in payroll.
She was arrested Feb. 26 and charged with Misappropriation of Fiduciary Property/Financial Property from $20,000 to $100,000 — a third degree felony punishable by two to 10 years in prison and a possible fine up to $10,000. She was booked into the Williamson County Jail and released the same day on $10,000 bond.
“No one is more upset and disappointed in this turn of events than those who work here and board members,” said Sandra Taylor, president of the WCESD #4 Board of Commissioners. “It’s unbelievable and hurtful for this to happen. It came out of left field, and we are all upset.”
Wells declined an interview request from The Independent.
However, the day prior to her arrest, she posted the following on Facebook: “No matter what the assumptions, accusations, and judgements are from other people, God knows the truth and loves me!!! Come at me some more devil, God’s got my back, all of me actually and that’ll never change!!”
A post dated Feb. 26, stated, “Just don’t believe what you read or hear.”
Taylor said it is unknown how much money is missing, but ESD officials say Wells confessed to stealing $42,000 from WCESD #4.
Fire Chief Anthony Lincoln said the audit, which was conducted by Medack & Altmann of Giddings, reported a $38,000 payroll discrepancy in early February. Taylor said the ESD has received clean audit reports in previous years.
The Chief said payroll fluctuates every two weeks depending on an employee’s hours worked. He said every two weeks, he reviews and approves time sheets, which were then entered into the system by the administrative assistant. Payroll checks, which do not require a signature as do other expense checks, are deposited directly into employees’ personal bank accounts.
“We thought the payroll system was fail safe. We thought we were well protected,” said Commissioner James Baker.
“It took a lot to get past the system that was there,” Taylor added.
As Administrative Assistant, Wells was responsible for posting bills and entering receipts into Quickbooks bookkeeping software. She also posted payroll every two weeks, kept minutes for the ESD Board meetings and assisted through the budget process.
Records show Wells, a full-time employee, was paid an hourly rate of $18.86. With benefits, her current salary was about $48,000.
Lincoln, who was hired as Chief in 2014, said he has not mastered Quickbooks and the only copy of the software was installed on the computer used by Wells in her office. He believed she had remote access to the program as well.
Since the Chief and the ESD Board were made aware of the problem, passwords were changed, Lincoln said.
“I’m not good at Quickbooks. I’m still learning,” Lincoln said. “I didn’t realize the system has checks and balances that could have alerted us.”
Taylor said the ESD had other “checks and balances” in place that limited Wells’ access to the District’s checking accounts, credit cards and cash.
“She had no credit cards, no access to cash and couldn’t write checks,” Taylor said.
ESD commissioners review expenditures at their regular monthly meetings, but Baker said the appointed officials “are looking at where we are in the budget as opposed to where we should be.”
“If it flucturates a lot, then we ask more questions,” Taylor added.
“Now that we know what happened, it won’t happen again,” Baker said.
Wells’ arrest last week was the second time she has been charged with theft in Williamson County. According to the Williamson County website, Wells was previously arrested for theft prior to her employment at WCESD #4. In October 2009, she was charged with theft of property by check under $500.
Lincoln said it is standard procedure at the ESD to use Texas Department of Public Safety to conduct background checks on new hires. While he was not chief at the time she was hired, he believed that a background check had been done and that the prior offense did not appear in the results.
Lincoln said he did not know about the prior offense until after Wells’ arrest last week. He said he has never checked the publicly accessible jail and court records online.
Lincoln said former chief Mark McAdams hired Wells, and an examination of her personnel file revealed very little about her background and qualifications. He said she had access to the file while still employed, and because he did not hire her, he did not know anything about her previous employment, education or qualifications.
“I think she responded to an ad in the paper,” he said, adding that she was first hired as a part-time employee.
Baker said Lincoln, who was hired as chief in 2014 and was Wells’ direct supervisor, could not have prevented the theft of ESD funds.
“There is a limited amount that he could have done (to prevent such an act) in the time he has been here,” Baker said. “He’s made a positive footprint here with personnel.”
Baker said the allegations against Wells share no similarities with a case in 2009 when the ESD Board accused a former chief and his wife of misappropriation of funds — a Class A misdemeanor. The case against them remained unresolved for two years before it was finally dismissed by the Williamson County Attorney in 2011– ruining their careers, their reputation in the community and sending them into personal bankruptcy.
Taylor was on the ESD Board at that time, and Lincoln was serving as Captain. Lincoln came to ESD #4 from the Georgetown Fire Department were he served part of his tenure as chief.
“We’ve spent years trying to recover from the damage of the past,” Lincoln said.
Taylor said although the situations were very different, the current incident brought back a flood of hurtful memories of the past.
“We keep asking ourselves that (how it could have happened) over and over again,” Taylor said. “We’ve been told (by investigating officers) that it happens all the time, that they (a thief) will find a way, that it’s a sign of the times. For me, I think I’m too trusting.”
Chief Lincoln said he believes Wells acted alone.
“My opinion is that it started and stopped with her. No one else is involved,” Lincoln said.
Taylor said that although the amount of money that Wells confessed to taking from the ESD represents about one person’s salary, there will be no noticeable impact on the District’s ability to provide services.
“We are still able to take care of business normally,” added Lincoln.
The ESD does have insurance to cover acts of fraud committed by staff members or Board members. Lincoln said the policy will pay up to $25,000 for the loss attributed to Wells.
ESD Commissioners voted unanimously on Monday to retain Municipal Accounts & Consulting of Austin to handle all of the District’s bookkeeping, and agreed conceptually to contract with Alliance Payroll of Austin to process payroll. The decision to move all of the bookkeeping and payroll functions out of the fire station are in direct response to the reported theft. But, Lincoln said the move may also save money.
The District will spend about $2,200 per month by outsourcing the bookkeeping and payroll functions to a third party. Salary and benefits for the full-time employee cost almost $4,000 per month, Lincoln said.
The Board agreed to table discussion on hiring an auditor to conduct a forensic audit of the ESD books. Although the District received pricing information from two CPAs to conduct a critical audit, the Board’s attorney adivsed postponing a decision to detmine its necessity. At an estimated $200 per hour, it could cost taxpayers as much as $5,000 to conduct a one-year critical audit. Taylor said she would contact the District Attorney’s Office to determine whether it was needed for the case in light of Wells’ confession that she had taken $42,000.
At the end of Monday’s meeting, Commissioner James Crabtree asked if anyone had heard from Wells or had any new information as to why the theft occurred.
“I feel like I’m lost and don’t know anything,” he said, at which time the Board agreed to go into executive session with their attorney.
Lincoln and ESD Board members have been discussing for almost one year the possibility of calling an election in November for voters to consider a 1/4 cent sales tax that would be applicable in the fire district outside the City of Liberty Hill. They say the additional revenue is needed to equip and staff a second fire station in the eastern part of the fire district near Ronald Reagan Blvd. and State Highway 29.
“We still need money to service the community, but this doesn’t help bring positives toward us,” Lincoln told The Independent last week. “In Georgetown, they cover 130 square miles with five stations. Here we cover 128 miles with one (station).”
On Monday’s meeting agenda, the Board was scheduled to act on a contract with GCP Association Services LLC to manage the political campaign, as well as a contract for legal services with The Carlton Law Firm to act as special counsel with regard to the proposed sales tax election.
Lincoln recommended the Board wait until its April meeting to discuss the issue further and possibly take action on the contracts.
“We talked about it and think the time frame is needed, if the dust settles enough in April,” Lincoln told the Board Monday, referring to the allegations against Wells.
“We want the public to know that our taxpayers’ lives and property are of upmost priority here,” Taylor said last week. “We want to make sure we have the equipment and people we need. With the growth, we have to have another fire station. In order to get that, we have to have a sales tax. We’re already behind (keeping up with growth).”