Comptroller releases details surrounding water co-op case
Published 4:50 pm Monday, May 4, 2015
State officials released more details on an investigation of a former employee of the Watauga River Regional Water Authority / North Elizabethton Water Co-Op charged with embezzling more than $10,000 from the agency.
On Monday, Comptroller of the Treasury Justin Wilson released his department’s official report on the investigation, stating that Lisa Dawn Cipy, 47, of Hampton, had stolen “at least $11,325 in utility cash collections” between March 2014 and September 2014 while she was employed as a clerk with the Watauga River Regional Water Authority/North Elizabethton Water Co-Op.
Officers of the Carter County Sheriff’s Department arrested Cipy on April 27 on an indictment charging her with theft of property over $10,000. The indictment was sought by the Tennessee Comptroller of the Treasury’s office following an investigation by that agency.
Cipy allegedly concealed the theft by falsely voiding the stolen customer cash payments in collection records, or by never recording the stolen customer collections in the district’s accounting records.
Auditors from the Comptroller’s Office obtained copies of certain receipts, showing customers had paid their bills with cash and there was no legitimate reason for other transactions to be voided by Cipy, the report said.
Investigators determined the customer accounts manipulated by Cipy appeared delinquent on the district’s records even though customers had paid their bills. As part of her duties at the Water Authority and Co-Op, Cipy was responsible for printing, preparing, and mailing customer bills, as well as preparing the monthly delinquent or cutoff list. She was the only employee responsible for those duties, according to the report.
“To avoid detection from customers, she apparently removed the bills of customers whose accounts had been manipulated before they were mailed, so that the customer could not see that their current bill was incorrect,” the report said. “In addition, Ms. Cipy removed the related customer names from the monthly cutoff list of delinquent customers slated to have their service discontinued.”
During the investigation, auditors from the Comptroller’s Office visited the Water Authority and Co-Op offices to inspect records.
The report revealed that Cipy resigned from the district immediately after Comptroller investigators performed a surprise count of her cash drawer and found it to be $100 short, something for which she had no explanation.
Investigators took their findings before a Carter County Grand Jury in March, and that group returned an indictment against Cipy.
Cipy is currently being held at the Carter County Detention Center. In addition to the indictment, Cipy was also served with two warrants charging her with violation of probation at the time of her arrest. She is scheduled to appear in Carter County Criminal Court on May 22.