HEALDTON, OK - In July 2012 the Healdton City Council voted to request an audit from the state after their own private auditing firm found cause for concern.
"They began to see that there's money missing here and they went to the council with that," said city manager Charles Clark.
The audit said From July 1, 2009 until March 7, 2012 $79,757.96 was embezzled. More than $42,000 of that was taken in a check for cash scheme where cash is taken from the day's deposits and replaced with checks.
The remaining money was taken in a cash larceny scheme, meaning receipts were given for the cash, but it was never deposited.
Karen Kardaleff was the city treasurer at the time and the state audit says, "We noted that the check-for-cash substitutions appeared to stop, following the suspension of the bank deposit duty of Kardaleff in March 2012."
"It would indicate obviously something changed once the personnel changed," said state auditor and inspector Gary Jones.
The audit said Kardaleff was put on leave July 3, 2012 and fired August 28th for failing to attend a hearing in regards to allegations.
"They instituted some more internal controls in January of 2012 that then identified the individual who was taking the money and that's when she was suspended and so forth," said Clark.
According to the audit, the city is striving to improve the separation of duties, including daily deposit of collections and increased efforts to oversee financial operations to make sure this doesn't happen again.
The Oklahoma State Auditor and Inspector's Office has given a copy of the report to the district attorney. Clark sayid an item will be on the next city council agenda to vote on making a formal complaint to the district attorney as well about the missing money.