Another employee in the District of Columbia Office of Tax and Revenue has been caught helping herself to city funds. Federal prosecutors charged Mary Ayers-Zander with wire fraud for allegedly embezzling $414,000 over the past four years by making manual changes in taxpayers’ income tax withholdings and then diverting the cash to her own personal accounts. If this sounds familiar, it’s because this is the same sort of scam her former OTR co-worker down the hall pulled off in the largest embezzlement in D.C. history. The only difference is that Harriette Walters diverted property tax refunds instead of income taxes, and Ayers-Zander only made off with hundreds of thousands of dollars, instead of $48 million. When Walters’ decades-long fraud was finally discovered in 2007, her boss, Chief Financial Officer Natwar Gandhi, took “full responsibility” and vowed to tighten up OTR’s internal controls. As a former director of OTR himself, Gandhi said he would overhaul a system that allowed his own employees to steal millions of dollars right under his nose. But that promise has not been kept.
A report by independent auditor KPMG, released this February, still listed the financial reporting process in the CFO’s office as one of the city’s “five significant deficiencies,” specifically noting “insufficient control procedures over the reconciliation of tax withholdings to taxpayer submitted data.” Reconciliation is a basic accounting function, not some “loophole” in the system that Ayers-Zanders was able to manipulate for her own gain, as some Gandhi defenders are now trying to portray it. OTR’s failure to reconcile its own books — or to detect the illegal diversion of tax dollars to unauthorized bank accounts — is unacceptable in an agency that processed $4.95 billion in tax revenues last year alone.
The February audit report also noted that “OTR has not designed an appropriate policy requiring incompatible duties to be segregated to prevent a single employee from being able to prepare, review, and approve System of Accounting and Reporting cash receipt vouchers,” adding that some employees still have “inappropriate access” to city funds four years after the Walters scandal. As Examiner columnist Jonetta Rose Barras points out, this is the third time Gandhi’s own employees have been caught with their hands in the till. In 2001, General Counsel Saamir Kaiser stole $248,105 from the city’s tobacco settlement. That’s three strikes against the CFO, who should finally be shown the door. The city can’t afford him any more.
