Audits, controls drive race for treasurer
June 25, 2008 · Updated 3:35 PM
By Linda Riffe's own assessment, an attitude of civic concern and public responsibility best characterizes her campaign.
The Oak Harbor Democrat is challenging incumbent Maxine Sauter for the job of Island County Treasurer, and says she is aiming to correct some neglected wrongs she sees in how the county's money is handled.
Riffe, an administrator in the Oak Harbor School District, has made an issue of several years of state auditor findings in the Island County Treasurer's Office, findings she says show the county to be at risk for misappropriation of funds.
Although there have been no financial losses or wrongdoings in the treasurer's office, Riffe said it is a lack of controls over how taxpayer money is being handled that has driven her to run for the position.
"Mismanagement of the treasurer's office has put this county in jeopardy," Riffe said Wednesday.
She said her campaign is anchored by "a sense of extreme concern as a taxpaying citizen" that funds are not being handled according to sound, accepted management practices. At issue is a series of findings by the state auditor that has identified "weaknesses" in Island County's methods of handling cash, including an absence of strong internal controls, failure to make timely bank deposits, failure to fully receipt payments and a lack of segregated duties among staff.
Riffe said returning Sauter to the treasurer's office would be to deny problems exist.
"I know that the incumbent has said that now is not the time for change," she said. "It is precisely the time for change. For her to continually say there's not a problem, I just don't understand it."
At recent public forums and in the press, Sauter has accused Riffe of falsifying and misinterpreting the truth. In response, Riffe has encouraged voters to read the auditor's reports for themselves. She said she's made it her goal to inform the public about what's going on in order that voters make good decisions at the polls.
"This is not rumor, this is not innuendo, it's documented fact," she said. "People have a right to be educated and a right to get the facts."
Riffe said one of her first goals if elected will be to bring the treasurer's office into compliance with the auditor's recommendations, enacting "generally accepted accounting procedures." Her current position as a high school vice principal, along with previous experience owning a business consulting firm and work as a budget planner in the corporate world, have prepared her for handling the county's money, she said.
Riffe has a master's degree in administration and is co-author of the book "Leadership in the 21st Century."
"I think the breadth and depth of my skills have prepared me very well for assuming all aspects of the treasurer's office," she said.
Riffe said a number of changes are needed in the treasurer's office. One of her first moves will be to call in the state auditor to "have everything reviewed with a fine-tooth comb." Crucial in this regard is bringing the office up to speed with new technology, including getting office staff online with e-mail and voice mail.
Riffe said the office has lagged in its use of technology.
"The infrastructure is there, but the employees have not been allowed to use it," she said. "This will save taxpayers money in the long run, through cost efficiencies."
Riffe said she also would try to create more cohesion within the office. A high staff turnover rate in the office -- 19 employees in the last five years -- has created a drain on taxpayer money. Though Sauter has said such numbers have been misinterpreted, Riffe said "disgruntled" employees are another a sign of mismanagement, and a further challenge to creating accountability.
"You really don't know people very well until they're there for a while," she said. "Coupled with a lack of internal controls, you raise your risk tenfold."
As treasurer, Riffe said, she will give county citizens a "State of the Treasurer's Office" report regularly. She said this fits with her "open door" policy of management, which she described as a proactive way of serving the public.
"People can call me, they can come in to speak to me if they have concerns or questions," Riffe said. "I consider that a public service. They have a right to know."
Riffe said a concern for the people of Island County and how their money is being managed has given her a powerful sense of obligation to seek the treasurer's position, and to serve with "honor, credibility, both ethically and professionally.
"I care about people," she said. "It's out of that concern that I've put my career on hold to run for this office."
Incumbent Sauter sees no problems in office operation
In the conversation of Island County Treasurer Maxine Sauter, the phrase "checks and balances" crops up frequently.
It is an assertion she claims characterizes the tight financial controls in her office.
Sauter, a 16-year Republican incumbent, is currently locked in a tight race for re-election against Democrat Linda Riffe, an administrator in the Oak Harbor School District. Riffe has blasted Sauter for a series of state auditor reports citing poor financial controls in how the county treasurer handles public money.
"Where is she getting this from?" Sauter asked Tuesday. "I have never been faced with such inappropriate and false statements, ever. She's lying, everything she says. There's no money lying around."
For the past several years, the county has received warnings from the auditor's office over exactly what Riffe has claimed. But in speaking engagements during this campaign season, Sauter has stated repeatedly that no money has ever gone missing since she took office. She said the current auditor, Brian Sonntag, doesn't understand the specific requirements of handling money in a small jurisdiction. She also dismisses the severity of the auditor's findings.
"I've been around a lot longer than the state auditor has," Sauter said.
Still, she has not rejected all the auditor's suggestions out of hand. She said she has made a number of suggested changes in her office. Soon, she said, a new computer system will provide printed receipts for all transactions.
Any concessions she has made, however, are her doing. Sauter said she will not make any state-suggested changes until she is comfortable with the idea.
"In many ways, I've adjusted," she said. "Where I will adjust is when I think it has the appropriate checks and balances that I need. Otherwise, I'm totally responsible."
Sauter, in fact, exudes pride over the office she has built during her four terms. She said she has instituted an exacting system of accountability in the transference of funds.
"I've installed the most updated checks and balance system in the state, and I guarantee that," she said.
Riffe has also challenged Sauter's claim that she earned the county a bundle of money through investments. She noted county treasurers are bound by statute to invest only through the state-sanctioned Risk Pool, so there is not much room for creative investing.
Sauter is free to invest in local banks at her discretion, and by doing so, she said, she has kept the county afloat during its current recent budget crisis. She said she has never invested in the stock market.
"I do whatever I want," Sauter said, adding that she regularly invests through four local banks, including Pacific Northwest and Whidbey Island banks. "I have the highest income interest in the state. I'm totally responsible."
Sauter points to her experience as a financial manager on Wall Street as being partly responsible for her good record on earnings. Over a five-year period, she said, her investment income for the county has been in excess of $22 million. She also cites the county's high rate of property tax collection -- 99.4 percent -- as another indicator of her success as treasurer.
"I've made a lot of money, and held down costs," she said. "We're the only department in the county with no increase in budget costs."
Part of these savings may be due to the fact that the treasurer's office has fewer employees now than 16 years ago. Her opponent has claimed this reduced staff comes as a result of high job turnover, leading her to question Sauter's leadership.
Sauter said she feels the data itself on this issue has been seriously misinterpreted and misrepresented.
"The changeover in personnel should be interpreted appropriately," Sauter said. "Several employees retired, and some were requested to leave due to inability and non-compliance requirements."
Though Sauter expresses shock over what she deems the undue controversy surrounding the treasurer's race, she yet maintains that she is ready, willing and able to serve. She said her ability to earn and manage money is crucial to the county in light of the current budget shortfalls.
"The county needs my expertise in cash flow and investment, and I take credit for keeping their revenues high," Sauter argued. "It's something that comes easily to me."3000