Kingman will do everything it can to collect every possible penny lost to a Finance Department theft scandal, according to City Manager John Dougherty. Yet Dougherty concedes it’s possible, if not likely, that the City will not recoup a substantial portion of the more than $1.1-million allegedly stolen by fired Budget Analyst Diane Richards.
Dougherty said there’s no guarantee that the City will be fully reimbursed by the insurance company providing a half-million dollar policy protecting against employee theft. Even if the company paid up in full, the City would still be out at least $600,000.
There’s skepticism that Richards will be able to quickly pay down the portion of the loss through restitution orders that frequently accompany disposition of criminal prosecution of embezzlement cases.
The City has dismissed the company that has conducted annual audits for Kingman for 14 years.
Dougherty said elected officials could ponder litigation against the firm, alleging failure to detect corruption dating back as far as 2007.
Dougherty said he’s experienced the full rollercoaster range of emotions since the criminal investigation began in mid-November. He said his predominant emotion is anger that public trust has been abused, leaving a cloud of negativity over City Hall.
Dougherty said it’s hard to place any value on negative perception of local government that might otherwise be positive. In addition to the dollar loss associated with the theft, staff has lost valuable time to laborious auditing tasks and implementing protective measures.
Dougherty said the distraction of the scandal and the related and unanticipated duties will compress the period of time staff will have left for annual budgeting work next spring and summer.