Over the course of seven years, former Birch Bay Water and Sewer District treasurer Glenn Golay transferred hundreds of thousands of dollars of district money into his own accounts, according to a state audit.
The audit details Golay’s theft of $468,840 between January 1, 2003 and December 31, 2010. The audit found that Golay made payments to his credit cards, personal bank accounts, church and wife.
Golay used a travel reimbursement account to transfer amounts ranging from $10,000 to $58,000 out of the district’s finances.
The travel account, which the district board of commissioners abolished after Golay’s theft was uncovered, was never supposed to contain more than $2,000.
The district is insured with the state water and sewer risk management pool, and district manager Roger Brown expects the stolen money will be covered, except for a $5,000 deductible.
According to the audit, Golay concealed the fraud by transferring cash to several ongoing construction projects. These transfers were not documented, and the audit says the district’s reviews of these transfers were not detailed enough to provide adequate oversight.
The audit identified unauthorized payments made to 19 credit cards totaling $326,480, $116,309 paid to Golay, $21,050 paid to Golay’s church and $5,000 paid to Golay’s wife. The state auditor did not find theft from any areas of the district other than the now-defunct travel account.
Brown said Golay came to him in early January 2011 and indicated a routine audit then underway would have revealed Golay’s theft. After Brown fired Golay, Whatcom County sheriff’s deputies arrested Golay on suspicion of 16 counts of theft. Golay later admitted to investigators that he had misappropriated funds and that he was the sole district employee involved in the theft.
Golay pleaded not guilty to those counts in March. His trial date has been tentatively set for July 17, though county prosecutor James Hulbert said a plea deal with Golay’s attorney could be reached by then.
In addition to detailing Golay’s alleged fraud, the state auditor also released a report claiming the district lacked adequate internal financial controls, which allowed Golay to transfer funds to his own accounts for seven years. The report faulted the amount of control the district invested in Golay and said his activities as treasurer were not effectively monitored for accuracy.
Birch Bay Water and Sewer District officials are in the process of tightening their financial controls and have hired an interim finance director, Meredith Riley, to oversee the creation of new financial procedures.
Riley’s position is capped at two years, after which the district will hire a completely new treasurer; a job for which Riley will not be able to apply.
The state auditor found no other issues with the water and sewer district’s financial system.