Special report: payroll records, Fort Valley State College, Fort Valley, Georgia, July 1, 1964 through November 30, 1965 [1966]

SPECIAL REPORT PAYROLL RECORDS
FORT VALLEY STATE COLLEGE FORT VALLEY, GEORGIA
JULY 1, 1964 THROUGH NOVEMBER 30, 1965

SPECIAL REPORT PAYROLL RECORDS FORT VALLEY STATE COLLEGE - FORT VALLEY, GEORGIA - TABLE OF CONTENTS -

LETTER OF TRANSMITTAL

COMMENTS

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E. B. CAVIS
STATE AUDITOR

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January 4, 1966

Honorable Carl E. Sanders, Governor Members of the State Board of Regents President and Comptroller, Fort Valley
State College
Gentlemen:
We have made a special examination of the payroll records of the Fort Valley State College, Fort
Valley, Georgia, for the period July 1, 1964, through November 30, 1965, and submit herewith our report, with
contents enumerated on the preceding page. Copy of the special report has been filed as a permanent record in the office of the State Auditor and made available to the press of the State, as provided by Code Section 40-1805.
Respectfully submitted,
~~ State Auditor
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FORT VALLEY STATE COLLEGE - FORT VALLEY COM MEN T S
The within report covers a special examination of the payroll records of the Fort Valley State College, Fort Valley, Georgia, for the period July 1, 1964, through November 30, 1965. This examination was made after certain irregularities in handling payroll records were reported by officials of the Fort Valley State College to the Treasurer of the University System.
Code Section 40:1805 provides that the State Auditor shall audit all accounts of each and every State agency and make reports thereon "and in which report the State Auditor shall call special attention to any illegal, improper or unnecessary expenditures, or failures to keep records and vouchers required by the law, and all inaccuracies, irregularities and shortages" and shall file same "for the use of the Press of the State."
In compliance with the provisions of the Code Section quoted, the following conditions and transactions and the fraudulent appropriation of State funds for the personal use of Rashe W. Stephens, a former employee at Fort Valley State College, are cited:
Rashe W Stephens was employed as Secretary of the Buildings and Grounds Department and made up the payrolls of this department. Two copies of each payroll were prepared, one was retained by the department and one, which bore the approval of the Superintendent of the Buildings and Grounds, Mr. V. E. Harris, was submitted to the Business Office from which payroll checks were drawn.
Upon investigation and comparison of these two copies of the payroll, it was found that alterations had been made in the copy submitted to the Business Office, but not on the copy retained by the Buildings and Grounds Department.
Alterations in the copies occurred in the payroll periods May 26, 1965, to June 25, 1965, June 26, 1965, to July 25, 1965, July 26, 1965, to August 25, 1965, August 26, 1965, to September 25, 1965, and September 26, 1965, to October 25, 1965.
The alterations in the original payroll copy consisted of names being added to the payroll submitted to the Business Office for payment. Mr. Stephens told the examiner he added names to the payroll copy submitted to the Business Office and that no one knew he was doing this. The examiner was informed that after payroll checks were drawn, Mr Stephens generally picked up checks for the Building and Grounds Department and distributed them. There were cases when Mr. V. E. Harris, Superintendent of Buildings and Grounds, picked up the checks but the examiner was informed that when
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FORT VALLEY STATE COLLEGE - FORT VALLEY - COM MEN T S - cont'd

he did he would distribute only a portion of the checks and turn the others over to

Mr. Stephens for distribution. Mr. Stephens stated that he would remove the checks

for the names added to the payroll copy submitted to the Business Office and would

then endorse checks with payee's name and his name and would then cash checks.

The names that were added to the payroll copy were fictitious or were names

of persons that were not at that time employed by the Buildings and Grounds

Department of Fort Valley State College.

A list of the payee, check number, date and amount of each item added to the

payroll copy submitted to the Business Office and charged to Rashe W Stephens is as

follows:

CHECK

PAYEE

NUMBER

Al T Smith

8736

Willie Harvey

8977

Al T Smith

9002

Willie Harvey

9564

Al T Smith

9613

Ernest Hale, Jr. 10054

Willie Harvey 10062

Al T Smith

10120

Willie Harvey 10342

Jerry Malcolm Al T Smith

10399 10402

Willie Harvey 10645

Al T Smith

10655

Clarence Johnson 10656

Claude Simmons 10678

DATE
May 28, 1965 June 28, 1965 June 28, 1965 July 27, 1965 July 27, 1965 August 30, 1965 August 30, J965 August 30, 1965 September 29, 1965 September 29, J965 September 29, 1965 October 28, J965 October 28, 1965 October 28, 1965 October 28, 1965

AMOUNT
$ 265 03 221 97 223 03 261 52 210 64 113 34 317 01 210 68 239 47 197 26 203 47 320 61 234 36 206 52 221 97
$ 3 446 88

Mr Stephens informed the examiners that he endorsed the names of the payees

shown above and then endorsed checks with his name and then converted all of the

funds derived from above for his own personal gain.

There was one instance where the name of Ernest Hale, Jr., appeared on both

payroll copies, but the examiner noted that this check number 10335 dated September 29,

1965, in the amount of $59 28 was endorsed "Earnest Hale"and then endorsed by Mr

Stephens. Mr Stephens informed the examiner that this person was not employed at

that time by the BUildings and Grounds Department and the funds received from the

cashing of this check had been converted to his own personal use.

The $59 28 and the $3 446 88 make a total of $3 506 16 fraudulently appropriated

to his personal use by Mr Rashe W. Stephens.

The net salary check in the amount of $224 38 due Mr Stephens for the month of

November, 1965, has been held by the Fort Valley State College to apply against the

funds fraUdulently appropriated to his own use by Mr Stephens. Applying this check

to the amount fraUdulently diverted would leave $3 281 78 due Fort Valley State - 3-

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FORT VALLEY STATE COLLEGE - FORT VALLEY
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College.
The provisions of law violated by the actions and misappropriation of State
funds by Mr Rashe W Stephens as reported herein, are covered by the following Code
Sections:
"26-2801. (184 F.C.) Fublic officers, agents, etc. Any officer, servant or other person employed in any public department, station, or office of government of this S"ate or any county, town or city thereof, who shall embecZzle, steal, secrete, or fraudulently take and carry away any money, paper, book or other property or effects, shall be punished by imprisonment and labor in the penitentiary for not less than two years nor more than seven years."
"89-9903. (284 F.C.) Stealing, altering, etc., of pUblic documents. If any public officer or other person, shall steal, embezzle, alter, corrupt, withdraw, falsify, or avoid any record, process, charter, gift, grant, conveyance, or contract; or shall knowingly and willfully take off, discharge or conceal any issue, forfeited recognizance, or other forfeiture; or shall forge, deface, or falsify any document or instrument recorded, or any registry, acknowledgement, or certificate; or shall alter, deface or falsify any minute document, book or any proceeding whatever of or belonging to any public office in this State; or if any person shall cause or procure any of the offenses aforesaid to be rommitted or be in anywise concerned therein, he shall be punished by imprisonment and labor in the penitentiary for not less than two years nor more than ten years."
Mr Rashe W Stephens, Jr., in a signed statement before witnesses admitted that
he falsified the payrolls of the Fort Valley State College and drew rhecks to
various parties and personally obtained the funds represented thereby. This statement
is quoted, as follows:
"January 6, 1966 Atlanta, Georgia
I, Rashe Walter Stephens, Jr., made the following free and voluntary statement to Mr. George Armstrong, State Auditor's Department, and John F. Cooney, Investigator, Attorney General's office, State of Georgia. I have been advised that I do not have to make any statements, but any statements I make can be used against me in a court of law. No threats, promises or rewards have been made to me. I have been advised of my right to an attorney.
I am twenty-four years of age, and reside at Fort Valley, Georgia. I am divorced, and have two children. I have completed approximately three and one-half years of college.
I became employed at Ft. Valley State College in January, 1965, as Secretary, Building and Grounds Department, and as so employed, I was in charge of the disbursement of certain employees' checks. My job was to prepare two payroll forms, one of which was submitted to the Business Office and the other retained in my office. The payroll checks would then be issued from the names contained on the payroll form submitted to the Business Office. In May, 1965, I devised a scheme whereby I would add names to the payroll form sent to the Business Office and as a result have payroll checks issued in the names of non-existant employees. These checks, along with the legitimate employee checks would be sent to me for disbursement. I would keep the checks issued to the non-existant employee, endorse them, using the names under which they
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FORT VALLEY STATE COLLEGE - FORT VALLEY - COM MEN T S - cont'd

were issued, then sign my own name, Rashe Stephens. I used the following
names, Al T Smith, Willie Harvey, Ernest Hale, Jr., Jerry Malcolm, Clarence Johnson and Claude Simmons, and fraudulently obtained approximately
$3,500.00. I was aware that what I was doing was unlawful and criminal. My scheme was discovered shortly before Thanksgiving, 1965, by W. O.
Mac oms on, Ft Valley State College. I realize that what I've done is wrong and would like a chance to make restitution, if at all possible. I
acknowledge full responsibility for the stealing of this $3,500.00 and state no other person is in any way involved in this scheme.

I have read this two page statement and it is true and correct to the best of my knowledge. I have initialed each page and correction thereon.

Witness:

(Signed) Rashe W. Stephens, Jr.

Geo. F. Armstrong
Chief Examiner State Department of Audits John F. Cooney
State Law Department "

Mr Rashe W Stephens along with all employees of the University System are

covered in a blanket surety bond for $100 000 00 each, written by the Aetna Casualty

and Surety Company, Hartford, Connecticut, bond No. IlS 28143.

Appreciation is expressed to the officials and staff of the College for the cooperation and assistance given the examiners during this examination.

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