Former Water District Manager Accused Of Misappropriation

The wife of a Spokane Valley water district commissioner misappropriated more than $2,500 in district money when she worked as its office manager, the state auditor reported.

Betty Skillingstad, who managed Irvin Water District No. 6 for nine years, also falsified records to cover up the discrepancies, according to state Auditor Brian Sonntag.

Skillingstad, 44, whose husband Don Skillingstad was elected to the district’s board of directors last year, resigned Sept. 1 after commissioners asked her to step down.

She could not be reached for comment.

Her husband is still serving as chairman of the board.

Fellow commissioners Ron Hubert and Pete Kruger said during a special meeting Tuesday that the misappropriations occurred before Don Skillingstad was elected to the board.

The chairman is excluding himself from any district business regarding his wife’s case, they said.

Don Skillingstad, who also attended the meeting, would not comment on the matter.

Irvin Water District No. 6 serves about 1,000 customers in the Trentwood area.

Sonntag released the findings of his nine-month investigation last week.

Betty Skillingstad, who made about $24,500 per year, admitted to state auditors that she falsified records, according to the report.

She could face felony theft and forgery charges.

Auditors advised district officials to notify the state attorney general and county prosecutor’s offices, so those agencies could “take whatever action is deemed necessary under the circumstances.”

Hubert said notification had been made, although neither office had a file on the case as of Tuesday.

While water district officials said Tuesday they agreed with all the findings in the audit, they haven’t rendered judgment on whether Betty Skillingstad intentionally took the money or made accounting errors accidentally.

They said they’d leave that determination up to the authorities.

“Nobody has declared anybody guilty of anything,” said Kathy Behm, who replaced Betty Skillingstad as office manager.

Behm said that until recently all the district’s financial records were kept by hand and that making an error would be easy.

Acting on a tip, state auditors began reviewing the district’s accounting records in February.

They found that Skillingstad, who had total control of the district’s finances, paid herself for about 144 hours she did not work between December 1993 and February 1994.

The excess pay totaled more than $1,400.

In addition, Skillingstad used more than $1,100 in district money to pay the premiums on an insurance policy for her daughter, the audit found.

According to the report, Skillingstad overpaid the premiums on the insurance policy she received through the district between October 1993 and February 1995.

“She then directed the insurance company to apply the excess premium amount to another policy for her daughter’s family,” the report stated. “She also falsified a district resolution and the minutes of a board of director’s meeting to conceal these activities.”

Auditors said the district’s lax oversight and poor record-keeping standards, as well as the fact that Skillingstad had sole control over all accounting functions and was married to a commissioner, made the district ripe for embezzlement.

“Internal controls were not implemented, because the commissioners trusted the office manager,” the report stated.

Hubert shook his head and grimaced Tuesday.

“That’s the whole sad situation,” he said. “It’s been hell.”

District officials said Tuesday it wouldn’t happen again.

They are in the process of adopting new policies and procedures that will put formal internal control measures in place, such as requiring employees and supervisors to sign time sheets that document work hours.

“We’re going to have a checks-and-balances system now,” Behm said.

, DataTimes