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The former clerk of Grant County Mosquito District 2 is being investigated for misappropriation of funds totaling more than $129,000, a state investigative audit of the district states. The clerk is denying the allegations and has hired an attorney.

Karyn Byam of Electric City, a 20-year clerk of the mosquito district, resigned her position March 4, after being interviewed by the investigative unit of the State Auditor’s Office.

A “Fraud Investigation Report” released last week states that between 2010 and 2014, the clerk was compensated approximately $122,128 more than the district’s approved budgeted compensation, about three times as much as the budgeted salary. The audit report published July 9 concerned only that period. A spokesman from the auditor’s office said the mosquito district is not under a regular audit schedule, but in this case the SAO did an audit because of information received.

“Ms. Byam vehemently denies the allegations in the auditor’s report or any wrongdoing whatsoever during her tenure with the Mosquito District,” stated Byam’s attorney, Kenneth Chadwick, of Schultheis Tabler Wallace, PLLC. “Further, she is confident when the full factual background surrounding the auditor’s report is revealed, it will vindicate her position.”

The report states that while the district’s policy required two signatures on checks, the commissioners allowed Byam to handle all check signing without a second approved signature.

During 2012 and 2013 the clerk reported a high number of hours worked on a weekly, monthly, and yearly basis.

“We identified concerns over payroll and general disbursements paid directly to the District Clerk, including a lack of appropriate monitoring by the District Board members,” the SAO report states.

The board of commissioners told auditors that the hours Byam worked should have averaged 20 hours a month. The report referred to her position as full time due to the number of hours she turned in for compensation.

The report notes that the agency also known as the North Banks Lake Mosquito District had significant turnover in the makeup of its board in 2012.

The current commissioners are Randy Gumm, chairman; Carl Russell, Diane Canady, and Hank Wiebe. A fifth commissioner, Kary Byam, father of the clerk, submitted his resignation in writing to the city of Electric City dated July 10, 2015, stating that his actively being part of the board of commissioners “long exceeded” his term, which had expired, according to city records, on March 1, 2013.

Three of the commissioners, Russell, Canady and Wiebe, were appointed by Grant County commissioners, Gumm was appointed by the city of Grand Coulee and Kary Byam had been appointed by the city of Electric City, which is advertising for his replacement in this issue of The Star.

The audit showed:

In November, 2012, alone, the clerk reported 225 hours worked and was compensated $4,810.

In November, 2013, alone, the clerk reported 242 hours worked and was compensated $5,743.

In December, 2013, the clerk earned $7,464 (no timesheets to show hours for $5,453 of this total), the report showed.

In January, 2014, the clerk earned $7,885 in net pay. Gross pay was not reported because files for 2014 were missing.

The auditor’s summary shows Byam’s actual salary for 2010 was $13,620 and that her board-approved salary was $10,000 ($3,620 over); in 2011, actual salary $28,652, her board-approved salary $12,000 ($16,652 over); in 2012, actual salary $37,100, her board-approved salary $13,200 ($23,900 over); actual salary for 2013, $45,464, her board-approved salary of $13,500 ($31,964 over); and her 2014 actual salary of $59,992, and her board approved salary of $14,000 ($45,992 over) for a total of being paid $122,128 over her board-approved salary.

The auditor’s report went on to state that during a four-day period, Sept. 28 - Oct. 1, 2013, the clerk reported 85 hours, equating to 21.25 hours worked per day; and for the nine-day period, March 5-March 13, 2012, the clerk reported 135 hours, equating to 15 hours per day including weekends, all while being employed “by at least two other agencies during this timeframe.”

Thomas Shapley, deputy director of communications for the State Auditor’s Office, said Monday records show Byam was also active with Grand Coulee Dam School District and Grant County Fire District 12, and ran her own restaurant, MJ’s, in Electric City at the same time.

The report also notes “questionable expenditures” for which the clerk was reimbursed more than $4,000; instances of reports to the board not matching disbursements, including some to the clerk; information technology assets, including multiple computers, for which board members cannot account; and Internal Revenue Service penalties of more than $5,000 for “ … penalties incurred related specifically to the reporting of the District Clerk’s reported quarterly payroll.”

The report notes a copy of a 2009 board resolution approving extra contract work pay for the clerk of up to $697.24 a week if more than 70 hours were worked, but it questions the authenticity of the provided copy and information on it.

During the audit, when discrepancies were found, the fraud division of the State Auditor’s Office interviewed commissioners separately. Commissioners asked her to turn over all district records, and she resigned on March 4.

Since her resignation, the commissioners have hired Darla Orr as clerk, and revised the way reporting is done. Now checks have to be signed by two sitting commissioners. The district is insured and will file a claim, it told the SAO.

The fraud report is being referred to the Grant County Prosecutor’s Office, the SAO report says. County Prosecutor Garth Dano said Monday that he couldn’t comment on the report because he hadn’t yet seen it.

The report will be included in this story online at grandcoulee.com.