Originally published in The Weekly Packet, January 11, 2018
Investigation into missing Blue Hill funds turned over to sheriff’s office
by Anne Berleant
Three months after a 2017 audit of town financial records discovered an irregularity in bank deposits, selectmen have turned over the matter to the Hancock County Sheriff’s Office.
“Any ongoing investigation I can’t comment on,” Sheriff Scott Kane said January 9. “But I can confirm that the town of Blue Hill has asked us to do an investigation into the loss of funds.”
About $14,000 paid in cash to the town office in 2016 and 2017 never made it to the bank, town auditor James Wadman said.
“What this amounted to was the cash portion of some deposits. As part of our audit, we make sure that all money collected makes it into the bank,” he added.
Wadman’s audit discovered approximately $9,700 cash of a $650,000 deposit made in October 2016, when many citizens were paying their property taxes, was unaccounted for. Selectmen then asked Wadman to look into 2017 records, where he found three more discrepancies.
“They were smaller amounts, $2,000 to $3,0000,” he said.
During the audit, Wadman noted a trend where, in many instances, the cash portions of deposits were being deposited two or three weeks after they came in. The $14,000 shortage came from “instances where the cash never made it into the bank.”
While the loss is not significant, as the town carries “in excess of a couple million dollars,” Wadman said that “the safeguarding of these cash deposits and the custody of them is at issue.”
Blue Hill has a “decent” system for receiving and depositing funds, Wadman said. Clerks receive payments and write out deposit slips. Then, the town treasurer makes the bank deposit and enters the transaction into the town’s records.
“The treasurer is responsible for these assets,” Wadman said.
He said there was “no attempt to cover up” the shortages in the town records.
Based on the audit, and what Wadman further discovered, selectmen placed then-treasurer Jody Murphy on paid administrative leave October 5. Murphy has said she was not at fault and that she alerted selectmen to the first discrepancy in the accounts in January 2017, prior to the audit.
A disciplinary hearing began on November 12, and Murphy resigned on November 16 before it was concluded.
Kane said he wasn’t sure how long the criminal investigation would take.
“Sometimes it can go very quickly, and sometimes it will take a long period of time,” he said.
Meanwhile, Selectman Jim Schatz now reviews banking deposits and a monthly reconciliation, an additional safeguard that Wadman recommends.
Selectmen have also completed all bonding requirements to recover the loss, and held applicant interviews to fill the town treasurer position. A hiring decision could be made this week.