Auditor General Jack Wagner's Special Investigation Finds at Least $104,000 Missing from Luzerne County Community College Cafeteria

Charges brought on $17,524 of missing funds, recoupment of additional funds urged

HARRISBURG, Pa., Jan. 13, 2011 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner today urged Luzerne County Community College to recoup approximately $87,000 in additional money that was stolen from the college cafeteria by an associate dean of the college.  Wagner said that a special investigation performed by his department found that the associate dean, Peter Paul Moses, actually pocketed at least $104,000 in cash from the cafeteria.

Moses was convicted July 16, 2010, in Luzerne County Common Pleas Court of theft by unlawful taking and theft by failure to make required disposition of funds received with respect to 13 separate incidents of theft of the cafeteria's daily cash receipts totaling $17,524.66, and two counts of receiving stolen property with respect to two stolen laptop computers.  

However, Wagner's investigators found that, between Aug. 6, 2004 and Nov. 28, 2006, Moses actually pocketed in excess of $104,000 by failing to deliver the cafeteria's daily cash receipts on 79 separate occasions to the college's business office and diverted the cash to his own use.  The 13 incidents of theft of which Moses was convicted were selected for prosecution by law enforcement authorities from among the 79 incidents identified by Wagner's investigators.

"I am deeply concerned by the findings of our special investigation, which determined that a college official was able to inappropriately obtain more than $100,000 in cash generated from the college cafeteria," Wagner said.  "I urge the Luzerne County Community College to immediately take action to implement all of the recommendations of the special investigation report and to ensure that every effort is made to recoup all of the missing funds.  I am encouraged by the measures the college has already instituted and by the college's cooperation in the investigation.  Nonetheless, the Department of the Auditor General will follow up at the appropriate time to determine whether all of our recommendations have been implemented."

Wagner provided copies of his report to the attorney general, the Luzerne County district attorney, and the state Ethics Commission for review and whatever action they deem appropriate.

Luzerne County District Attorney Jacqueline Musto Carroll requested that Wagner's office assist her office, the Pennsylvania State Police, and the Nanticoke Police Department with an ongoing investigation into an alleged embezzlement of cafeteria funds from the Luzerne County Community College cafeteria.  The allegation indicated that $50,000 of cash deposits were missing from the cafeteria each year, dating to 2002.  Wagner's Office of Special Investigations was asked to determine specifically how much money had been stolen.

Moses was terminated from the college on Sept. 24, 2009, following his arrest on Sept. 18 of that year.  Following his trial, he was sentenced on Aug. 26, 2010, to 4 to 23 months in the Luzerne County Prison and ordered to pay restitution of $19,122.66 to the college.  The restitution includes repayment of the $17,524.66 stolen in the 13 incidents of theft of cafeteria daily receipts plus $1,598 for the value of the two stolen laptop computers.

From a review of bookkeeping records obtained from the college's business office, a review of a cafeteria calendar log, and numerous employee interviews with Luzerne County Community College personnel, Wagner's investigators determined that, based on an extrapolation from average daily receipts for the relevant time frames, the additional 66 instances of cafeteria funds that were not deposited amounted to $87,120.  Wagner's investigators were forced to extrapolate the amount of additional missing money because records to establish the exact amount of cash missing were not available.  Wagner's investigators found that the desktop computer on which such records were kept disappeared from an office to which Moses had sole access.

A total of 317 daily deposits were noted on the calendar from Sept. 22, 2005 through April 18, 2007.  

The calendar entries indicated that Moses was tasked with making 99 of the 317, with the other deposits being tasked to the cafeteria chef manager, the assistant chef manager, and several other college employees.  Wagner's investigators found that the only instances in which the deposit was not received in the business office and recorded on the cafeteria cash receipts summary was when Moses was supposed to have made the delivery.

Wagner's investigators noted that several internal controls weaknesses over cash receipts contributed to the funds going missing.  Investigators further determined that Moses appears to have violated the conflict of interest provisions of the Public Official and Employees Ethics Act by using his position of authority to influence and obtain possession of cash deposits from his subordinates that he then converted to his own use and personal gain.  Wagner's investigators also found that Moses appears to have violated other provisions of that act by failing to file statements of financial interests.

Wagner made 15 recommendations to fix the deficiencies identified by his investigation, including that the Luzerne County Community College should:

• Pursue all available legal actions against Moses to recover the restitution ordered by the court in the criminal action, as well as all additional money that he embezzled from the cafeteria fund that was not included in the criminal action;
• Increase the frequency in which external and internal audits are conducted of all accounts that deal in cash payments;
• Conduct a detailed daily reconciliation of the cafeteria sales receipts and the cash deposit amount received by the business office, and a monthly detailed reconciliation of the cafeteria fund bank account;
• Improve separation of duties over cash received, and implement appropriate data and information technology safeguards over cash sales and receipts data;
• Institute measures to ensure that all provisions of the Ethics Act are strictly adhered to, and ensure that all outstanding Statements of Financial Interests are filed for all college officials and employees who are required to file them.

A full copy of the investigation report, including the college's response, is available to the public at www.auditorgen.state.pa.us.  

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the Commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts thousands of audits each year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's Web site at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General