Nine months after a state audit revealed discrepancies in the Benton Fire District 6 finances, the former secretary has been charged with spending at least $6,000 on personal computer equipment, tools and leather boots.
Gerald Bruce Sherman, 66, resigned from the part-time position in 2012 after he was confronted by district management about the alleged embezzlement.
In addition to the unauthorized purchases made from late 2007 to May 2012, the audit also noted questionable payments totaling $12,527. Of that amount, $11,452 didn’t have sufficient documentation such as original receipts.
Before Sherman left, he reportedly took a jab at the district’s commissioners, claiming poor communication and oversight of all employees and volunteers.
He said his letter was not “an attempt to justify the lack of good judgment that I have exhibited,” adding that the purchased items were for district purposes, court documents show. The district serves the Paterson and Plymouth areas.
But Deputy Prosecutor Terry Bloor wrote in documents that the district had no need for a number of the items or they weren’t necessary for Sherman’s job.
Sherman pleaded innocent this week in Benton County Superior Court to one count of first-degree theft. His trial is Feb. 17.
Sherman gave a Prosser P.O. box as his address in court documents.
Last March, after the state Auditor’s Office released the fraud investigation report, Fire Chief Rolland Watt told the Herald that the district already has changed its methods of accounting and records retention and written job requirements for the new clerk “so that we will not have an issue like this in the future.”
Watt said the very small district has the resolve to see the case through to its fullest extent, and would “vigorously pursue” recovering the losses.
The district in the southwestern corner of Benton County covers about 1,000 people on 256 square miles, most of it farmland. The stations are in Paterson, Plymouth and Sunheaven, north of Paterson.
Sherman worked for Benton Fire District 6 as the secretary/bookkeeper for about 13 years. The position had a monthly salary set by contract — for which he signed his own paycheck — and didn’t pay benefits.
In addition to receiving bills and handling payroll, he was responsible for taking notes at monthly meetings of the district’s three-member board, writing vouchers for review by the board and submitting them to the county for payment.
The district has an annual budget of almost $850,000, with about $413,000 of that going to operating costs. The appointed chief and one firefighter/paramedic are the only full-time paid employees, but there are 16 active volunteers.
Sherman resigned in May 2012.
Two months before that, Watt followed state law and notified the Auditor’s Office of the potential loss of public money. The alleged misappropriation was discovered during a management review of the bills.
The state investigation took two years, then the case went to the Benton County Sheriff’s Office to review possible criminal activity. Prosecutors made a decision after getting both reports.
When he was working for the district, Sherman was allowed to keep the financial books at his home and had shipments directly delivered there instead of to the stations. He had told previous Chief Bill Harris and Watt — who was appointed chief in November 2009 — not to open any mail addressed to the district, court documents said.
Watt reportedly became suspicious when he saw a large bill from Staples for some computers. Watt knew the board had not approved it and wasn’t aware the district had an account with the office supply store, documents said.
After he resigned, Sherman sent an email to a commissioner saying, “The thing that always made me curious was the fact that the commissioners never bothered to deal with the problems. They never made the chief go after equipment that was never returned. They watched as people forged reports, misrepresented district capabilities to state and federal agencies, cheated on state certification tests, bought things for personal use using district funds and other shady activities.”
He accused one person of having several sets of binoculars, global positioning units, tools, portable radios and, “God knows what else” at home, all bought with district money, court documents said.
“If I’m guilty of anything, it’s a lack of communication to the board, but during my time at the district there has been a very poor communication example set by the board,” the email said. “I want to again state as I did last night — all the items I purchased have been for district purposes.”
The state fraud investigation found that he started a petty cash checking account that should have been used to pay incidental district expenses. The account was used to order supplies and pay recurring monthly expenses, which auditors said should have been done through the accounts payable process.
The bookkeeper and the chief were authorized to sign on the account, yet the clerk was the “sole reviewer of the bank statements and performed all bank reconciliations.” He also on occasion transferred money from the payroll account to the petty cash account, the report said.
Some purchases that auditors found weren’t for district purpose included: a computer tablet with a two-year warranty, iPod and case, for $985; one laser printer and two photo printers for $1,852 total; several hard drives and storage servers; a socket set and an 18-volt screwgun; and an ethernet cable, LED monitor and desktop tower for $1,078.
Court documents also show work boots, one pair for $249 and the other for $430. Neither purchase was approved by the board because Sherman didn’t need to wear work boots while taking care of the district’s finances, documents said.
Sherman allegedly claimed the more expensive pair were for Harris, even though the chief had retired two years earlier and the boots were not his size.
Watt has said the embezzlement did not affect the district’s operation — the bills were paid and they still responded to emergency calls — but added that the money could have had a better purpose, like buying a fire hose or a heart monitor.
Sherman is out of custody without bail while the case is pending and was granted permission to travel in Washington and Oregon.