Former Santa Cruz County Treasurer—Alleged Financial Misconduct
As part of their responsibility to prevent and detect fraud, Santa Cruz County (County) officials took appropriate action by reporting to us and the Federal Bureau of Investigation (FBI) alleged financial misconduct by the former County Treasurer (Treasurer). We conducted an investigation to determine the amount of public monies misused, if any, and to identify any deficiencies in the County Treasurer’s internal control structure that may have allowed the Treasurer’s alleged misconduct to go undetected. Additionally, we are cooperating, as allowed by law, with the United States Department of Justice and FBI as part of their review.
Our investigation revealed that from March 2014 through March 2024, the Treasurer allegedly took $39,472,100 when she made at least 182 unauthorized wire transfers from 2 County Treasurer’s Office bank accounts to business bank accounts connected to her.1 To help conceal her actions, the Treasurer allegedly failed to record her unauthorized wire transfers in the County Treasurer’s accounting system and lied to and/or provided numerous false investment statements, cash reconciliations, and Treasurer’s Reports to County entities, officials, and employees; a County financial consultant; and/or the Arizona Auditor General (Office).
Because the primary responsibility for the prevention and detection of fraud rests with those charged with governance and management, including the Santa Cruz County Board of Supervisors, County Manager, and County Chief Financial Officer, we made 9 recommendations to County officials for actions they can now take to improve internal controls over public monies and help deter and detect fraud. Finally, we made 2 recommendations to the Arizona Legislature to consider revising statutes to give the Office independent, direct access to financial institution records and require newly elected or appointed county treasurers and chief deputy treasurers to meet minimum training requirements.
1This report is based on data available to us as of this report date. Additionally, because most bank records prior to March 2017 were not available to us, we obtained certain amounts from information included in Santa Cruz County’s civil complaint against the Treasurer filed in Pima County on August 1, 2024. Specifically, we used bank records to verify 160 wire transfers totaling $37,234,100 and relied on the County’s civil complaint information for the remaining 22 wire transfers totaling $2,238,000.