Still more on Karen Brewer

(Note: You can read two earlier stories about Karen Brewer here and here.)

Feb. 24, 2009

By Jacob Quinn Sanders
Arkansas Democrat-Gazette

The Arkansas State Police charged a former state employee with felony theft on Monday in a long-running scam that records show netted her hundreds of thousands of dollars in cash — often $24 at a time — meant for license-plate fees.

Since firing Karen Brewer from her post at the agency’s Central Revenue Office in Little Rock on Oct. 3, the Arkansas Department of Finance and Administration has seen the amount of cash she is accused of stealing continue to grow.

“She did quite a bit of damage to us, as it turns out,” said Michael Munns, the Finance and Administration Department’s assistant commissioner of revenue operations and administration.

A state police investigator first concluded that Brewer, 41, stole between $42,000 and $44,000 in cash from her job as the sole employee issuing specialized license plates such as ones reading “SURFSUP” and “GOHOGS3.” Brewer admitted as much in a videotaped interview the day before she was fired, according to state police records.

In November, an internal department audit found that $268,622.20 was missing since July 15, 2004. Even though that amount was already more than 10 times Brewer’s annual salary after 20 years of working for the department, officials said they believed there was more going back at least another five years that they could not quantify, as records were incomplete.

And then on Monday, an investigative report by the state Legislative Joint Auditing Committee expanded on the Finance and Administration Department’s findings, accusing Brewer of taking $362,381 between Sept. 14, 1999, and Oct. 1, 2008 — two days before she was fired.

“Numerous internal control weaknesses contributed to funds being misappropriated and not detected timely,” according to the legislative audit report.

The report cited 10 deficiencies in the department’s policies and record keeping and made five recommendations suggesting changes.

“We agree with what they’re saying,” Munns said. “We’ve already done some of those things they recommended, and we plan to do more.”

After that last report’s completion, state police obtained an arrest warrant Monday charging Brewer with one Class B felony count of theft of property, which can carry a prison term of between five and 20 years. She surrendered to the state police, then posted a $5,000 bond and was released from the Pulaski County jail.

The phone number listed for Brewer on her arrest report was disconnected. She could not be reached for comment.

Though a relatively low-ranking clerk, Brewer held a position of trust, working alone in the only office in the state that processed requests for specialized license plates.

A security supervisor noticed something unusual on a closedcircuit camera in late September — a cashier near Brewer’s office working busily though no one was at her counter. A few quick questions later, and department supervisors learned that Brewer had repeatedly asked the lowerranking cashiers to turn licenseplate fee checks for amounts between $25 and $100 into cash for her. The most common check amount: $25.

Brewer told the $9-an-hour cashiers she needed the bulk of the cash to send as a refund but that $1 in each case was supposed to pay for a duplicate registration, according to the department’s investigation. Brewer then kept everything but the $1 and ordered the plate anyway, showing it as one issued free in the department’s computer system and leaving no one to complain later on, according to the department’s investigation.

Records show she did that thousands of times.

One cashier took questions about Brewer’s actions to supervisors in 2004 or 2005, the department’s own audit found in November, but no one ever followed that up.

None of the investigations nor Brewer’s bosses hints at what might have motivated her.

Federal court records show that she and her husband, Timothy, filed for Chapter 13 bankruptcy protection in 2000, owing $96,186.62, and missed several payments. But by 2006, the couple had paid off $73,197.78, and the bankruptcy was closed.

The legislative report found that the issuance of free plates increased dramatically beginning in mid-1999. Usually such a thing was rare, only happening when a plate had to be recalled or a driver found it defective.

The longer Brewer was in that job, however, the more that changed.

From July 15, 2004, through Sept. 30, 2005, for example, the report found that of 4,227 license plates ordered, 2,591 plates, or 61 percent, were issued free.

From Oct. 1, 2005, through Oct. 1, 2008, the proportion increased even more. Of 10,907 plates ordered, 8,142 — 75 percent — were issued free.

The number of free plates also decreased during Brewer’s vacations, according to the report.

The report noted that the department required no supporting documentation for free plates and that cash-refund policies in the employee manual were not followed. In addition, it said, the department did not fully use the auditing tools it had available, and there was too much authority and no “segregation of duties” in Brewer’s job.

The report recommends reviewing more information, developing a monitoring system to ensure compliance with policies and rules, requiring much more information and documentation for free plates, and creating a means to track and record complaints to supervisors and any corresponding action.

“Management has reviewed the recommendations provided in this report and we agree with the findings,” the department responded in writing to the legislative auditors. “Additional work is ongoing to identify weakness in our business processes and design and implement the changes to correct any issues.”

  1. […] have suggested that in addition to many of the stories I tossed up on this site, I make sure to add at least a few articles with straight ledes just to show that I can do those, […]

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