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Landfill scandal investigation: Records easy to manipulate, Carlton County says

By Tom Olsen / Duluth News Tribune

The Carlton County transfer station kept financial records, but those records did not prove useful in catching the alleged embezzlement of significant amounts of cash by an employee, a county official acknowledged Monday.

Heather Cunningham, who oversees the landfill as the county’s zoning department administrator, told the News Tribune that financial records could be easily manipulated and that it took security cameras to uncover the alleged activities of cashier Joanne Wappes.

“When you’re not ringing things up, it doesn’t show up in the books,” Cunningham said. “You don’t know unless you have cameras.”

Wappes, 62, of Cloquet was charged on Sept. 20 in State District Court with theft by swindle and theft of public funds. An employee of nearly 30 years, Wappes is accused of manipulating cash in multiple transactions to steal more than $1 million.

A source told the News Tribune last week that the transfer station lacked a bookkeeping system. That oversight thwarted an initial investigation of Wappes, the source said, after David Michael Smith was caught burglarizing her home in 2010 and told authorities about finding large sums of cash and landfill receipts inside.

Cunningham disputed the source’s contention that the bookkeeping system was insufficient, but conceded it did not catch Wappes’ alleged embezzlement.

Cunningham became Wappes’ boss in July 2012. She said she first received a complaint about financial improprieties at the landfill in March. There was no evidence in the books to implicate Wappes, so security cameras were installed in June, she said.

Financial discrepancies were not easy to detect, Cunningham said, because self-haul customers pay by volume, while the county pays disposal fees to the Western Lake Superior Sanitary District by tonnage.

“People ask why she wasn’t caught sooner,” Cunningham said. “Well, we charge by volume, not weight. But when our trucks offload it, we pay based on tons.”

In short, Wappes allegedly used two sets of books to skim money off the top of customer payments and record different totals in county records. The result was a substantial financial loss to county taxpayers, but not WLSSD, Cunningham said.

Cunningham said her department is looking at ways to prevent future employee theft. The cameras will remain at the site and will be monitored, she said. Additionally, surprise cash counts and audits will be performed regularly.

The zoning department is meeting with its solid waste advisory committee to develop additional procedures, and a public survey is expected to be distributed to customers in November to seek solutions, Cunningham said.

While charging customers by weight would make for an ideal system, it isn’t a practical solution because of the expense of purchasing scales, she said.

One option might be to eliminate cash transactions altogether, Cunningham said. The county could switch to a system similar to St. Louis County, in which cash-paying customers would need to purchase landfill vouchers at sites like gas stations and the county courthouse.

However, the decision will largely come down to customer preferences, Cunningham said.

“We want to make sure we’re providing good customer service,” she said. “If they still want cash as an option, then we’ll continue with the cameras and continue with the surprise cash counts and audits.”

Wappes’ position has not yet been filled, but has been posted as two part-time jobs, Cunningham said.

“We hate to lose a full-time job, but for checks and balances, we just can’t have the same person working there all the time and having sole control,” she said.

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