KNOXVILLE, Tenn. — The Tennessee Comptroller's Office found former Knox County Rescue employee Charlotte McLawhorn stole at least $44,020 from the rescue squad, a report released by the office shows.
10Investigates first reported on the alleged theft this summer.
McLawhorn was hired as an administrative finance assistant Dec. 16, 2017, a letter in her personnel file shows.
A Knox County grand jury indicted McLawhorn for theft, fraudulent use of a credit card and forgery this month.
The Knox County Rescue Squad is a non-profit. The city of Knoxville provides $41,500 annually to the rescue squad. In the last fiscal year, Knox County contributed $283,755.
The squad told WBIR it was looking at the office's findings.
"In advance of those findings we worked diligently in coordination with the Comptroller’s Office to strengthen our internal control measures to prevent similar events in the future. Over the coming weeks we will evaluate additional steps that should be taken as a result of the investigation. At no time has the investigation – or the events leading to the investigation – had any impact on KCR’s operations, and we continue to serve the citizens of Knox County and the region in their times of crisis," attorney John M. Lawhorn said in a statement.
The Comptroller's Office said between Sept. 5, 2020, and April 20, 2023, McLawhorn spent $24,550 from her personal Knox County Rescue credit card on airline tickets, salon expenses, medical bills, vacation rentals and shopping.
McLawhorn was also responsible for canceling and disposing of former employees' credit cards, which she used instead to make purchases of at least $17,370, the Comptroller's Office investigation report shows.
Investigators said they found $2,735 in questionable fuel purchases and $2,099 in misuse of the squad's Amazon account.
McLawhorn then made false entries into Knox County Rescue's accounting software, the Comptroller's Office investigation report said.
The 10News investigative team reported this July that Knox County Rescue believed a former employee misappropriated funds and filed a notice of fraud with the Tennessee Comptroller's office. 10News received McLawhorn's personnel file through an open records request that month.
In January of this year, McLawhorn's personnel file shows she sent an email informing leadership she had found another opportunity and would be stepping away from the rescue squad. In March of this year, one of the Knox County Rescue board members asked McLawhorn to turn over ownership of the organization's bookkeeping information to an accounting firm.
The next month, the Knox County Rescue Squad executive director informed Knoxville's Chief Operating Officer David Brace the squad had identified possible fraud within its organization.
Meeting recordings showed Knox County Rescue discussed reimbursing county funds McLawhorn may have misused.
"KCR acknowledges there have been discussions about reimbursing County funds that can be identified as misappropriated by its former employee," the rescue squad's attorney said in an email to 10News earlier this year.
The Comptroller's Office found several deficiencies in Knox County Rescue's handling of finances. Investigators found McLawhorn was the only employee responsible for maintaining accounting records, collecting, depositing and disbursing funds. The report said Knox County Rescue didn't provide adequate oversight of the organization's spending.
On Feb. 1, 2023, the Knox County Rescue Squad was audited by Knox County Auditor Richard Pugh. The auditor warned Knox County Rescue about similar deficiencies.
"The lack of a proper inventory tracking system opens KVERS up to risk that could include fraud or abuse," Pugh wrote. "Best practices direct uploading receipts in a computer format to allow for quick access, add an additional level of security, and a more robust records storage process."