Auditor says nearly one-third of town spending over four years was fraudulent or unauthorized, citing what she called the worst breakdown in board oversight she has seen in nearly three decades.
WASHINGTON, Okla. — A state forensic audit alleges more than $1 million in fraudulent or unauthorized spending by former officials in the Town of Washington, concluding that years of inadequate oversight allowed widespread financial abuses to go undetected in the McClain County community.
State Auditor & Inspector Cindy Byrd described the findings as an unprecedented failure of local financial oversight.
“This is the worst example of board oversight I have seen in my 29 years of government auditing experience,” Byrd said. “The Town of Washington is a small community with limited resources. From FY2021 to FY2024, roughly one-third of the Town’s total expenditures were either fraudulently misappropriated or spent without Board authorization.”
The audit found that between July 2020 and July 2024, the town spent about $3.25 million. Investigators determined $1.02 million — approximately 31% of all expenditures during that period — were fraudulent or unauthorized.
According to the audit, former Town Clerk/Treasurer Susan Noel misappropriated $676,368 through unauthorized checks, debit card purchases, electronic transfers and payments toward personal credit cards, loans and other expenses. Former Town Administrator Paul Aday was found to have misappropriated an additional $705 through unauthorized debit card purchases.
Investigators said Noel allegedly used town funds to pay personal Bank of America, Citi, Discover and other credit card accounts, mortgage payments, online financial accounts, Amazon purchases, PayPal and Venmo transactions, veterinary expenses and other personal expenditures. The report includes hundreds of alleged transactions involving personal purchases that investigators concluded served no legitimate municipal purpose.
Among the audit’s most serious allegations is that Noel altered bank statements provided to the State Auditor & Inspector’s Office before the forensic audit began. Investigators said they later obtained original records directly from the town’s financial institution and identified 64 altered transactions totaling more than $62,600 in which payee names and vendor information had been changed to conceal the true recipients of town funds.
The report also details broader management failures beyond the alleged misappropriation of funds.
Auditors found $70,607 in unauthorized payroll, bonuses and employee benefits, more than $72,600 in utility cash collections that were never deposited, approximately $22,200 in cemetery revenue that could not be accounted for, and widespread failures to maintain financial records or follow basic accounting controls.
The audit also found Noel entered into a contract with 20/20 Tax Resolution Inc. without board approval after failing to remit payroll tax withholdings to the Internal Revenue Service between 2012 and 2019. The town paid the firm $210,400, but auditors said none of that money reduced the town’s IRS tax liability, which still totaled $176,887 as of May 2024. According to the report, records from the tax resolution firm showed portions of the payments were for representation of both Noel and Aday in matters involving personal IRS Trust Fund Recovery Penalty assessments.
While sharply criticizing the governing board’s lack of oversight over several years, the audit also notes that not every trustee failed to raise concerns. Investigators wrote that current Trustee Joel Siria and former trustees Duane Branham and Kara Cook sought access to financial records and questioned town financial practices but encountered resistance from Noel and Aday.
The current Town Board requested the forensic audit after concerns surfaced over the management of town finances. The audit notes that Noel was terminated in July 2024, Aday was terminated two months later, and the town subsequently established new bank accounts and financial controls. Current officials have also suspended cemetery operations pending legal review and have taken steps to address deficiencies identified during the investigation.
The audit does not indicate whether its findings have been referred for criminal prosecution, and no criminal charges had been announced as of Thursday.
