On a relatively frequent basis, state and local audits and investigations highlight instances in which city and county employees have crossed a line, increasing their personal income by taking advantage of lax internal controls and their own poorly overseen access to taxpayer dollars.

These situations can be particularly onerous when the amounts taken have been siphoned away over extended periods by individuals who are in top government positions, with staggering losses recorded. And here’s a doozy.

On July 15, 2026, a well-detailed forensic audit of the small Town of Washington, Oklahoma, population 673, shows the many ways in which questionable expenditures, unauthorized payroll payments, and other misappropriated funds resulted in a little over $1 million over a number of years that auditor Cindy Byrd terms “fraudulent or unauthorized.” This represented 31% of the town’s total annual expenditure of $3.25 million.

The forensic audit was requested by the town’s Board of Trustees, which raised concerns “regarding the management of public resources under the former clerk/treasurer and the former Town Administrator.” The major focus of the audit concerns former Town Clerk/Treasurer Susan Noel. The audit details many issues that raised concerns, including a misappropriation attributed to Noel of $678,368 of town funds between July 1, 2020 and July 31, 2024. (Noel’s employment was terminated on July 18, 2024, after serving as Town Clerk for 17 years.)

Other issues that contributed to the town losses, were unauthorized payroll and other employee payments. The audit also includes information about a $210,400 agreement that was made without board approval with a tax resolution service. As the audit describes this issue, it stemmed from evidence “that Noel failed to remit required payroll taxes to the IRS between 2012 and 2019.”

With the completion of the forensic audit, the information has now been turned over to the state’s District Attorney and the Attorney General. “I don’t think the State of Oklahoma has seen something this egregious in a municipality since the City of Hartshorne audit was conducted, Byrd told us. The forensic audit of that small Oklahoma city was published in October, 2017.

How do messes like this happen? In the most recent case, while the actions of the clerk/treasurer generated a massive amount of attention in the audit, the lack of internal controls, the absence of any separation of fiscal responsibility, and a significant failure of oversight also draw criticisms.

The current audit explains how questionable transactions had been “purposefully hidden” from board oversight,” and it credits a few board members for raising concerns and asking for documentation of executive actions. But it also faults the board for extremely limited oversight which “created an environment in which unauthorized transactions and fraudulent expenditures occurred and remained undetected for an extended period.” 

The audit does not provide much information about any involvement by Town Administrator Paul Adair, but notes that he, along with Noel had extensive authority over town finances and that he and the town clerk were the “sole signatories on the Town’s bank accounts” from April 2008 until July 2024. Adair was also terminated in September 2024. It is also noted in the audit that the town’s staff of four individuals included both Noel’s daughter and son in law.

What happened in this small town is unusual, but mirrors other past cases in which a lack of attention, a powerful and unchecked central financial figure, a trusting small-town atmosphere, and a lack of documentation, allow fraudulent practices to continue sometimes for years.

For example, back in 2022, this website included a Q&A with Kelly Richmond Pope, an accounting professor at DePaul University who produced and directed “All the Queens Horses”, which chronicled the enormous embezzlement of $53.7 million from Dixon, Illinois by the former longtime comptroller.

That was a small, but much larger city (population 15,000) and a more staggering  loss, but with some of the same issues that occurred in the Town of Washington. As Pope said at the time, “I think the commonality is there’s always an abuse of power and always unlimited access because of the blind trust that’s given.”

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