Caltrans Hearing on Dismissal : Auditor Links Fired Cashier to Missing Funds

Thumbing through accounting documents and investigative notes, an auditor testified Thursday that fired Department of Transportation cashier Linda Silverthorn signed at least seven bank deposit slips in which more than $3,600 was missing.

However, under questioning by Silverthorn’s lawyer, auditor Gina Schumacher said several documents show that others besides Silverthorn had handled some of the cash transactions in which money disappeared from the cashier’s office at Caltrans in San Diego.

The tedious recitations regarding account ledgers, cash, receipts, and accounting procedures dominated the first day of an administrative hearing at which Silverthorn is trying to win back her $1,755-a-month job.

The hearing could also provide grist for prosecutors looking into the apparent theft of $20,000 in state funds. A deputy district attorney listened attentively from the back of the room as Schumacher outlined how checks--sometimes months old and belonging in other state accounts--were systematically substituted for missing money between the summer of 1985 and early 1986. No criminal charges have been filed in connection with the allegations.

Caltrans fired Silverthorn and chief San Diego cashier Karen Knight, and demoted Deputy District Director Michael Northeimer in June after internal audits showed money missing from several state accounts.

Silverthorn’s lawyer, Leroy Davies, blamed Knight for the losses and tried to show Thursday that others besides his client actually received money and handled some of the paper work on days that bank deposits by Silverthorn came up short.

That was true sometimes, Schumacher acknowledged. But it was not always the case. Schumacher said that, on Jan. 3, Silverthorn personally handled $1,335 worth of cash transactions. But a bank deposit she signed for showed only $14.76 in cash, with all other assets listed as checks.

Although acknowledging that her audits were based in part on “presumptions” about the amount of cash receipts that should have been recorded and later deposited, Schumacher flatly rejected Davies’ hypothesis that the supposed losses may have been mere bookkeeping errors.

She said records of money taken in should have matched bank deposits in every detail. When Caltrans employees, using the cashier’s office “like a bank,” cashed personal or travel expense checks, the inconsistencies between bank deposits and state ledgers known as Cash State Reports may well represent “a wash,” she said.

But in instances when cash was taken in, but not deposited, and checks for transportation fees that should have been listed in other accounts appeared, Schumacher said it was clear that state money was being systematically pilfered.

Although the audits did not provide absolute proof, Schumacher said, “We must presume it is Linda Silverthorn,” in the seven bank deposits she handled that came up short, “just like in other cases, we must presume it is Karen Knight.”

Schumacher’s statement, in answer to a question by Davies, was the closest any Caltrans official has come in public to accusing the fired cashiers of theft. But Caltrans officials have said that sloppy bookkeeping, rules violations and other derelictions of duty could sustain their decision to fire the employees.

The district cashier’s office in San Diego handles roughly $250,000 a month in transactions for rents, fees, road plans, books and pamphlets. The office also handles expense-account and payroll advances, and issues airline tickets.

Silverthorn was the chief cashier in the office from May, 1979, to October, 1983. She then filled in as a cashier from time to time until being suspended. She was fired in June.

A single mother of two, Silverthorn has steadfastly maintained her innocence of theft since the shortages were discovered.

In the weeks following her dismissal, she charged that Caltrans officials were retaliating against her because she exposed a case of discrimination in job promotion in 1983.

Silverthorn said it was her complaint that led to the more thorough investigation by state auditors after a preliminary internal audit pointed to some of the sloppy practices, but not to the fund shortages.

Caltrans officials, who said they have handled all the personnel actions fairly, concede that Silverthorn complained about conditions in the accounting department. That was “considered,” they said, before they fired her.

Caltrans officials said Silverthorn’s role in launching the discrimination complaint had nothing to do with their decision to fire her. During the hearing Thursday, Davies tried to introduce evidence to support his claim that Caltrans was retaliating for the discrimination complaint. But Caltrans attorney Jeff Joseph repeatedly objected that it was irrelevant.

The day before the shortages were disclosed, state Transportation Director Leo J. Trombatorre, who himself has been touched by the allegations regarding expense account abuses, sent a letter to all 15,000 Caltrans employees that began: “It is time to clean house.”

Trombatorre, the only person to head the agency in Gov. George Deukmejian’s Administration, had to reimburse more than $1,600 to the state earlier this year after it was revealed that he claimed too much in mileage for using his car and had used a state airplane for personal travel.

Three other witnesses besides Schumacher testified Thursday. The hearing was to resume today.

Despite legislative criticism, Caltrans officials have said their decision to fire Silverthorn is final even if they can never prove that she stole any of the money missing from state accounts.

The San Diego County district attorney’s office has launched a criminal investigation into the losses, but so far no one has been charged. Silverthorn, meanwhile, has filed a $23 million defamation claim against the state, claiming her reputation has been damaged.