An accounts payable audit ordered after members of California's San Mateo County Mosquito and Vector Control District noticed expenditure irregularities uncovered a $635,000 embezzlement scheme.
The scheme was masterminded by two of the county's former employees. As a result, one of the workers was terminated, while the other resigned, according to district manager Robert Gay, as quoted by the San Francisco Examiner.
Investigators were brought in to conduct an AP audit after a trustee received an "unsatisfactory" explanation for the amount of money the district spent on pesticides during fiscal year 2010-2011. One of the employees has a history of misappropriating funds and is currently serving time in state prison for embezzling from a private company. The other remains unnamed.
According to a statement by Gay, the audit "revealed a complex and sophisticated method of misuse and theft of district funds and property." The district has since introduced a series of safeguards to protect itself from a similar situation in the future.
In addition to introducing policies and procedures that increase transparency and divide responsibility between staff members, conducting regular AP audits can also help identify misappropriation quickly.