Santa Cruz Landfill Manager Accused Of Embezzling Over $8,000

The Arizona Auditor General’s Office reported this week that Santa Cruz County management “took appropriate action” by reporting a fraud allegation against Gary Shadrick, a former landfill supervisor, to a law enforcement agency and the Auditor’s office.

The Auditor General’s Office investigated the fraud allegations, and determined that from March through April 2015, Shadrick embezzled $8,233 of landfill receipts that should have been used to support county operations. On September 15, 2017, a criminal complaint was filed against Shadrick.

Auditor General Overview

The County operates three landfill/transfer station sites, and in fiscal year 2016, these sites reported revenue of $2,061,792. For the last 7 of his 15 years as a county employee, Shadrick managed two of these sites. His responsibilities included reviewing daily receipt reconciliations, safeguarding landfill receipts, preparing deposit forms, and submitting landfill receipts and deposit forms to county officials.

As a result of Auditor General’s fiscal years 2012 and 2013 audits, county management was advised that it should improve its procedures over landfill receipts due to certain deficiencies we noted regarding landfill receipts and deposits.

In fiscal year 2014, county management implemented new internal control procedures to better safeguard landfill receipts, including assigning an employee to review the timeliness of landfill deposits. This employee took corrective action after noticing landfill receipts were more than 2 weeks late for deposit. Specifically, on May 4, 2015, this employee conducted an unannounced spot check at the main landfill site Shadrick managed and determined that although check receipts were secured in the safe, no cash receipts were present. Shadrick admitted to the employee and, later, to other county employees that he had taken cash receipts but did not know how much. The County immediately placed him on administrative leave and on May 14, 2015, terminated his employment.

From March 19 through April 28, 2015, Shadrick embezzled cash receipts totaling $8,233 from both of the landfill/transfer station sites he managed. These daily cash receipts ranged from $54 to $2,186 and should have been deposited with the county treasurer; however, Shadrick kept these monies for his own personal use. Shadrick admitted to Auditor General staff that he had taken the money and claimed he was going to pay it back. He further admitted that for at least a few months’ time prior to March 19, 2015, he had delayed making deposits, instead taking landfill cash receipts for his personal use and later depositing the amount he took with either subsequently collected landfill cash receipts or with some of his personal monies. Although transaction amounts for the few months’ time that Shadrick admitted
he was delaying deposits while personally using cash receipts cannot be quantified because certain county records are incomplete and inaccurate, other county records depict that at the end of his scheme, missing landfill receipts totaled at least $8,233.

Shadrick offered to repay these monies; however, as of June 16, 2017, no repayment had been accepted.

The Auditor General found that “county officials did not provide adequate oversight or maintain effective internal controls to ensure all landfill cash receipts were appropriately collected, recorded, and deposited.

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