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.


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?

Recommended Actions

Area

Recommended Forensic Steps

Stamp custody Interview staff, review recording logs, audit stamp storage procedures.
Transaction review Analyze all expenditures linked to the stamp. Reconcile against budget and policy.
Document assessment Authenticate invoices, receipts, contracts tied to approvals.
Digital trail Extract metadata from accounting/ERP system to track creation and approval timestamps.
Interviews Speak with CFO, accounting personnel, and anyone with stamp access.
Expert tech review If necessary, involve handwriting or stamp impression analysis specialists.

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