Washington Counties Insurance Fund: A Cautionary Tale of Fraud and Oversight
A Disturbing Discovery
Tens of thousands of dollars in public funding are missing from the Washington Counties Insurance Fund (WCIF), a shocking revelation made public following an investigation by the State Auditor’s Office (SAO). This financial scandal raises serious concerns about transparency and oversight in public finance.
The Mechanism of Misappropriation
Fraudulent Activities Uncovered
The investigative saga began when a finance manager noticed a staggering discrepancy of over $123,000. This alarming figure led the SAO to delve deeper into the workings of the WCIF, which is designed to pool resources from various counties for collective insurance coverage, circumventing the need for individual policies (as supported by state law RCW 48.62).
Kathleen Cooper, a representative from the Washington State Auditor’s Office, stated, “The Fund is a public entity and manages public money because the funds come from governments.”
The Fall from Grace
Unmasking the Culprit
The trouble started last year when the finance manager was terminated amid two significant incidents: a disastrous phishing scheme and other workplace-related challenges. The subsequent appointment of a new manager unveiled even more misappropriated funds.
“There were not enough reviews, secondary reviews,” lamented Cooper, highlighting the glaring oversight deficiencies that allowed these fraudulent activities to persist for so long.
The Aftermath: Charges and Accountability
Unfortunately, the funds have yet to be recouped. The Thurston County Prosecutor’s Office has charged Anthony Matagi with fraud in connection with the case. At the time of reporting, the WCIF’s Tumwater office was devoid of staff, as they were attending a “benefits retreat.”
A Statement from Leadership
In response to the crisis, Bridget Lockling, the Interim Executive Director of the WCIF, issued a lengthy statement acknowledging the misappropriation. She noted:
“Unfortunately, the Finance Manager took advantage of his role to make additional payroll payments to himself. It wasn’t until after he was terminated for other work performance issues that these payments were discovered. The internal control weaknesses identified by the SAO have been addressed, and there is now substantial oversight, reviews, and approvals in place.”
Lockling assured stakeholders that the lost funds would hopefully be recaptured through restitution or an insurance claim, stating, “The loss of these funds does not affect the clients, and there will be no impact on insurance rates or fees. And this loss does not jeopardize the stability of the organization.”
A System of Accountability
Reflecting on the situation, Cooper affirmed the importance of public accountability: “Reports like this are an example of how Washington State has really strong public accountability.”
The Road Ahead
As Matagi prepares to stand trial this summer, the WCIF faces a critical moment of reflection and reform. Ensuring robust internal controls must be a priority for safeguarding future funds and maintaining trust in public financial management.
For more information on public fund governance, explore resources like the National Association of State Auditors or the Government Finance Officers Association.
Conclusion
This unfolding story serves as a poignant reminder of the need for vigilance and oversight in public finance. The Washington Counties Insurance Fund’s experience could reshape future policies and practices, ensuring that such alarming misappropriations become a thing of the past.
