The Office of the Auditor General reported that a former Town of Parker office specialist has been indicted on nine felony counts after an audit and financial investigation found alleged embezzlement of town funds.

Gretchen Augustine, director of the Division of Financial Investigations for the Auditor General’s office, told the Joint Legislative Audit Committee that the investigation covered the period from February 2021 through October 2021 and found several schemes that together involved more than $173,000 in town funds. "We conducted a financial investigation and found that from February 21 to October, the former office specialist may have embezzled over a $173,000 of town monies when she admittedly issued unauthorized checks to herself and others, kept cash that should have been deposited into the town's bank account, and made personal purchases using town credit cards," Augustine said. She added the office submitted the report to the Arizona Attorney General’s Office, which led to the indictment.

The Auditor General's presentation described three related schemes: (1) issuance of payroll checks that the office specialist allegedly forged and negotiated or sent to associates; (2) keeping cash receipts totaling $9,768 that should have been deposited into town bank accounts; and (3) personal use of two town credit cards for nine purchases totaling $4,690, including electronics and designer cologne. Augustine said the largest scheme involved six unauthorized payroll checks totaling about $180,000, of which approximately $158,000 were negotiated and $21,000 were not negotiated.

The report recounts that the employee allegedly used forged signatures and omitted check copies from accounting records, and that the town manager at the time failed to secure payroll check stock and to perform reconciliations of payroll and deposit records. The Auditor General's office also reported the employee may have participated in a fraudulent Paycheck Protection Program application, receiving approximately $20,000 in PPP funds; that matter was referred to the Attorney General, which the Auditor General said was assessing whether to involve federal authorities.

Augustine said the Auditor General issued seven recommendations to the town to strengthen controls over public funds, including separation of duties, written credit‑card policy and independent, periodic unannounced reviews of financial records. Town officials reported actions taken since the investigation: outside reconciliation of payroll to account statements, periodic unannounced payroll reviews by the town manager, dual custody and lockboxes for cash receipts, and new credit‑card receipt and purchase‑order procedures.

The Auditor General emphasized the case remains in the judicial process: "Although the office specialist has been indicted, this case has not been adjudicated and is still moving through the judicial process. Therefore, I am limited to the information I can present only to the information in our June report," Augustine said.

The Auditor General provided the committee a copy of the Town of Parker financial investigation report; the committee packet lists that report as Tab 1, Attachment A.

The committee asked follow‑up questions about staffing and local controls. Augustine said the division handles public‑entity investigations only and provides its confidential findings to county attorneys or the Arizona Attorney General for prosecutorial consideration. She also said the division’s public findings are issued after a prosecuting agency files an indictment or complaint and that many of the office’s investigations have led to indictments and convictions historically.

The committee requested the Auditor General provide any additional details the office may release once the case progresses through the courts.