Town sues accountant over failed AP audit

The town of Kinderhook, New York, recently filed a $1.2 million lawsuit against an auditor who failed to identify the former town bookkeeper's embezzlement, the Times Union reports.

Leonard Vona, a local certified public accountant, carried out an accounts payable audit of the the town's financial records at the behest of its supervisor. He found no problems despite the fact that bookkeeper Pegeen Mulligan-Moore stole more than $450,000 from Kinderhook between December 2006 and December 2009. Mulligan-Moore's misappropriation was not uncovered until officials from the state comptroller's office were brought in in January 2010.

"Although the town retained defendants specifically to investigate many of Ms. Moore's entries to the town's books … defendants failed to take basic steps that would have brought Ms. Moore's scheme to light much earlier than it was," the lawsuit states, as quoted by the news source.

Court records indicate that according to the AP audit, Mulligan-Moore linked the town's general fund account to her personal credit card.

Establishing a strong system of checks and balances may have mitigated or prevented the theft. Organizations can use this in conjunction with regular AP audits to dissuade workers from embezzlement.  

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