Audit reveals Talihina Public Works Authority victim of embezzlement

TALIHINA — A former utility clerk allegedly used elaborate off-book billing schemes and “creative accounting” to embezzle tens of thousands of dollars from the Talihina Public Works Authority, according to a state audit.

The nature of the schemes and missing records make it impossible to know exactly how much was taken, but auditors estimate the losses to be about $150,000, said State Auditor and Inspector Gary Jones.

Jones said former Utility Clerk LaDale Compton confessed to auditors that she embezzled funds, but greatly underestimated the amount that auditors believe was misappropriated.

“She said she had a sick mother and a sick brother and a little went to gambling,” Jones said.

Le Flore County District Attorney Jeff Smith said Monday that he has not yet had the opportunity to thoroughly review the recently released audit to determine whether criminal charges are warranted.

Compton could not be reached for comment.

Compton had been employed by the Talihina Public Works Authority since about 2001, but told auditors she began misappropriating funds in January 2012, the audit stated.

Deposits went up more than $8,000 a month after internal controls were implemented in October 2013, and jumped an additional $4,371 a month, on average, after Compton resigned, auditors reported.

The Authority’s board of trustees failed to have annual audits performed, as required by law, and the town clerk-treasurer “failed to provide oversight as required by the Authority Trust Indenture.”

Those failures enabled the embezzlement to go undetected for a longer time, auditors said.

Auditors uncovered the embezzlement while auditing other operations of the town in response to a citizens petition, Jones said.

The town audit also revealed some concerns:

• Talihina and its Public Works Authority were delinquent in paying federal, state and unemployment payroll taxes, resulting in the payment of at least $22,000 in penalties and interest.

• $67,125 was spent on employee holiday bonuses without proper board approval.

• There was a lack of documentation to support a $4,000 check issued to employee Trudye Cantero for the payment of $100 cash Christmas bonuses to 16 volunteer firefighters and 24 members of the emergency management staff.

• Cantero and Compton used authority funds to obtain interest free personal loans.

• Mary Timmons, the niece of board member Gina Gregson, received $61,050 in contract labor payments without board approval and was subsequently hired by the board as a town employee. Auditors said both forms of employment appear to violate the state’s nepotism law.

• Board member Rhonda Sears’ son-inlaw was hired, another apparent nepotism law violation.

• Auditors said the employment of board member Gregson’s spouse was not a nepotism violation, because he was already employed by the town before she was elected as a trustee.