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Everett Fire finds internal fraud by ex-employee

EVERETT — A former city fire inspector defrauded the city of $12,700 by falsifying time card reports, but was allowed to hand the money back and resign at the advice of legal counsel.
The city informed the State Auditor’s Office of the fraud in fall 2019, which resulted in the auditor’s office issuing a finding in late December.
A majority of the problem was that the employee was paid as if the employee was there. It amounted to 275 hours, and the employee was absent for 62 hours of scheduled shifts, according to an internal report the Tribune obtained as a public record.
The city hired a private consultant who determined that during 2019, “the Fire Inspector did not properly submit 229 hours of leave for time, spent either on vacation or for days where there was no record of attendance,” the auditor’s office reported.
New accountability time-tracking software at the Fire Department uncovered the time-slip frauds, city attorney David Hall explained in a Jan. 22 summary email.
Fire Chief Dave DeMarco said at last week’s City Council meeting that he inherited systems that had to be rebuilt. Unearthing this fraud was one example of accountability, he told the City Council.
The county prosecuting attorney’s office chose not to pursue charges against the employee.
The fire department fixed the issues when they were identified, the city told state auditors. In 2019, it implemented controls that include having Fire Marshal’s staff being required to check in with their supervisor at the start and end of the workday.
The audit finding went out Dec. 28. City Council members apparently became aware of the 2019 fraud through a memo emailed to them on Thursday, Jan. 14.
At the Wednesday, Jan. 20 council meeting, Councilman Scott Murphy said this was not OK, and that the council should have been debriefed about this from city administration when the fraud became known. He called it an example of a lack of transparency from Mayor Cassie Franklin’s administration.
Councilwoman Liz Vogeli called Murphy “rude” for launching into the mayor during the part of the council meeting when council members typically give reports on community happenings.
But if not here, then where can council members raise these questions, Murphy replied. Murphy said the council was also “blindsided” last year when council was asked to approve a $357,000 out-of-court settlement to former police officer Brett Gailey after allegations of being passed over for staff
promotions because of his National Guard military obligations requiring him to take time off work.
The city will now change its policies to apprise the council of similar incidents immediately, attorney Hall wrote in the email Friday, Jan. 22.
Hall wrote there are a few reasons council was not apprised earlier. One is because the city sees numerous types of personnel issues of varying magnitude that are handled administratively and do not go before the City Council. “There was no reason to discuss potential litigation with Council for this matter because the City was made whole without the need for litigation.”
Two, the city administration gives the council memos about matters like this only if journalists begin asking the city questions. This was why DeMarco’s memo went out Jan. 14, Hall wrote.
As a change, “At Councilmember Murphy’s suggestion, and consistent with our continued commitment to transparency, we will implement a policy of notifying Council at the same time we notify the Auditor of any loss of City funds,” Hall wrote.




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