Former Columbus Chief Financial Officer Milton Rawle was arrested Monday after being indicted in June for embezzling almost $290,000 from the city between 2016 and 2018 and falsifying documents to conceal the embezzlement, State Auditor Shad White told The Dispatch on Tuesday morning.
The case is the largest municipal embezzlement in the state auditor’s database, which dates back to 1993, Communications Director Logan Reeves told The Dispatch on Tuesday afternoon. Following the investigation, the city implemented several policies to strengthen its fiscal management, Mayor Robert Smith told The Dispatch on Tuesday night.
The embezzlement charge came to light after a Fiscal Year 2018 audit report of the city revealed several discrepancies in its fiscal management, according to a Tuesday press release from White’s office. Wanda Holley, certified public accountant at Watkins, Ward and Stafford — the firm that conducted the city audit — brought the discrepancies to White’s attention in August 2019, which prompted the investigation, White told The Dispatch on Tuesday.
The audit, conducted in November 2019 and accepted by the city council in July, documents the poor health of city finances during FY 2018 and points out multiple deficiencies, including unapproved money transfers and the city’s failure to monitor the use of public funds, The Dispatch reported.
Rawle — who worked as the city’s CFO between 2013 and 2019 — made unauthorized transfers from the city’s bank accounts between December 2016 and December 2018, which amounted to $288,000, White said Tuesday. To cover his tracks, Rawle is believed to have labeled those unauthorized transactions as “payroll” or “reimbursement” and used “clip art” to alter the city’s bank statements, according to the release. Combined with interest and investigative expenses, Rawle now owes the city $354,896.27, White said.
The 49-year-old CFO resigned in February 2019 after a 16-workday suspension for failing to alert council members of the city’s steep deficit until November 2018. The city operated at a deficit exceeding $800,000 in both FY 2017 and FY 2018, plunging its general fund balance to $2.3 million.
White said state investigators are aware of the city’s deficits. However, the $288,000 was all the money they could prove that Rawle stole from the city.
“We try to identify every single dollar that we can prove was stolen,” White said. “Some of that overspending could have just been, of course, incompetence — spending more money than you have. That’s not necessarily criminal, but it is incompetence. … Sometimes there’s an amount of money that we believe may have been taken, but it’s impossible to prove beyond a reasonable doubt that it was taken.”
White added that the amount of money embezzled was “disturbing,” especially in the context of the city’s budget size. The city approved a $24.31 million budget for FY 2018, The Dispatch reported.
“When you are talking about a city missing $288,000, it’s not just how the $288,000 compares to all the other cases we’ve had,” he said. “These are large numbers for the city, so the taxpayers of Columbus have taken a big hit thanks to Mr. Rawle.”
Rawle was released on $65,000 bond Tuesday from Lowndes County Adult Detention Center, where he was held after his arrest in Jackson County, according to the facility and the Circuit Court Clerk’s Office. A court date was set for Nov. 18.
If convicted, the former CFO will face up to 20 years in prison and up to $25,000 in fines, in addition to restitution. Local District Attorney Scott Colom, who will prosecute the case, told The Dispatch on Tuesday morning his priority is to get the money back to Columbus taxpayers as quickly as possible.
In his Tuesday press release, White urged prosecutors to “not go lightly” about the case due to its gravity.
“Mr. Rawle stole much more than many burglars could ever get away with,” White said. “We shouldn’t treat him differently just because he wore a tie and stole with a pen.”
City has strengthened management of taxpayer money, mayor says
The state investigation sparked changes in the city’s fiscal management system, Smith told The Dispatch on Tuesday night.
Instead of letting the CFO handle transactions and signing checks, Smith said he now has to approve and sign all transfers and co-sign the checks with Human Resources Director Pat Mitchell. Deposits are verified daily by the CFO, he said, but are collected and made by other designated employees.
The council already reviews the claim dockets — which documents the city’s monthly payout — at each council meeting. In terms of transparency, the CFO now has to present a monthly financial report to Smith and the council along with bank statements, Smith said.
Faced with the discrepancies found in the FY 2018 audit, Smith said the city has corrected all of them. For example, he said the city now makes monthly reconciliations with the bank — a measure to compare the city’s ledger with the bank statements to catch financial mistakes and correct them — and gives Chief Operations Officer David Armstrong the authority to approve them.
With the measures, Smith said he is “very confident” that the city will salvage the damage caused by the embezzlement.
When asked why Rawle was embezzling for as long as two years under the city’s radar and what he thinks of the city’s past fiscal management system, Smith declined to comment in detail and cited concerns about the ongoing litigation against Rawle.
“I can’t go into details because the auditor and the district attorney asked us not to discuss it,” Smith said. “But … there was check and balance to a certain extent.”
Council members Ethel Taylor Stewart of Ward 1, Charlie Box of Ward 3 and Stephen Jones of Ward 5 all declined to comment when asked the same questions. Other council members could not be reached for comment by press time.
Yue Stella Yu was previously a reporter for The Dispatch.
You can help your community
Quality, in-depth journalism is essential to a healthy community. The Dispatch brings you the most complete reporting and insightful commentary in the Golden Triangle, but we need your help to continue our efforts. In the past week, our reporters have posted 41 articles to cdispatch.com. Please consider subscribing to our website for only $2.30 per week to help support local journalism and our community.