Case Summary: Alleged Misuse of Signature Stamp

What happened:
According to documents from the Washington State Auditor, CEO Crystle Stidham allegedly used the signature stamp of CFO Christopher Stamey to approve expenditures totalling $554,971. This was reported by King 5 News based on records obtained from the auditor’s office: 

Why it matters:
If accurate, this constitutes a serious breach of internal control—the CEO bypassed formal authorization procedures, potentially masking unauthorized spending and raising red flags for financial integrity.

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Forensic Accounting Considerations

1. Internal Controls & Authorization Protocols

• Stamp misuse: Authorization stamps are typically controlled and subject to dual control or monitoring.
  Investigate:

  • Custody protocols: Who has physical access or could replicate the stamp?

  • Approval logs: Are there usage logs showing when and by whom the stamp was used?

  • Stamp security: Was it stored securely (e.g., locked drawer, logbook)?

2. Transaction Audit Trail

• Spending analysis:

  • Review each transaction tagged with the stamp. Identify recipient, purpose, date, amount.

  • Cross-check with board-approved budgets—were these expenditures budgeted or justified?

  • Examine supporting documentation: invoices, receipts, approvals—determine authenticity and completeness.

3. Signature Authentication

• Digital/permanent logs: If the organization uses digital signatures or electronic workflows, there should be an audit trail supplementing the stamp.

• Handwriting comparison: Compare stamps against known genuine impressions; many stamps subtly degrade over time—compare new vs old impressions for anomalies.

4. Segregation of Duties & Overrides

• Role conflict: The CEO overriding the CFO may indicate weak segregation. Check:

  • Approval limits: Is the CEO allowed to approve unlimited amounts?

  • Policy enforcement: Were controls overridden or bypassed deliberately?

5. Fraud Red Flags

Look out for:

• High-dollar amounts: The cumulative $554,971 is significant.

• Pattern of usage: Were funds routed for personal gain, shell companies, or backdated approvals?

• Resistive behavior: Did the CEO or staff withhold documentation or impede auditors?

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