Auditor: School employee stole $806,644

RIDGEFIELD, Wash. – State investigators revealed Monday the stunning amount of money that totaled hundreds of thousands of dollars they said a Ridgefield School District employee took over 10 years.

According to a report from the Washington state auditor, 56-year-old Peggy Kane, a 21-year employee, siphoned at least $800,000 from the district that may have helped to help pay the mortgage of her two-story country home just outside Ridgefield.

The state auditor said Kane, the district’s business manager, inflated her pay from $1,000 to $10,000 a month, which totaled at least $806,000. By destroying district payroll records and manipulating the computer system, the fraud went undetected for 10 years.

“It looked like some kind of expenditures that were going to some agency, when in fact it was going to herself,” said Art Edgerly, superintendent of the Ridgefield School District.

“She gained the trust of a lot people, including myself.”

The district discovered the fraud this past April and Edgerly said Kane admitted to the fraud after he confronted her about the missing money.

“When she was able to share the fact she’s been doing this, it was almost a relief (to her),” said Edgerly. “(She) was relieved that part of her life was over.”

More than $650,000 was cut from Ridgefield schools this year and parent Kyra Harmon said kids needed it for educational purposes in an already tight budget that has cut funding for music and drama.

Harmon said she thinks about the stolen tax money and the district’s levy just passed by voters, 67 percent to 32 percent.

“It makes me angry because as a community they ask for levies and someone is out there blowing $811,000 or whatever the amount it was,” she said.

Edgerly denied the district tried to keep the fraud investigation quiet before the vote.

“This is the act of an individual,” he said. “It’s a different issue, an act of dishonesty; it’s not about school programs or facilities.”

 The U.S. attorney’s office is working to bring charges against Kane. According to the district, Kane was the only person who had control over the finances. The district has now put in place some checks and balances to keep a similar situation from happening again.