Lääne-Harju fires CFO for alleged misappropriation of over €100,000
Lääne-Harju Rural Municipality has terminated its employment contract with chief accountant Lauri Orgse, over allegations he had misappropriated a total of €101,750 from municipal funds, over a three-year period.
The municipality, which lies due west of Tallinn and whose principal town is Paldiski, also filed a criminal complaint with the Prosecutor's Office.
Orgse has pledged to return the funds.
Lauri Orgse started working for Lääne-Harju Rural Municipality seven years ago.
His most recent monthly wage came to €2,700 gross; three years ago, in 2022, apparently coveting more funds, accessed municipal money to that end, it is reported.
According to the municipality's mayor, Jaanus Saat, Orgse did this by awarding a salary to himself higher than that stipulated on payroll.
Since salary payments in that municipality are disbursed as a single consolidated transfer, but this is done alongside payments made to agencies subordinated to the municipality, that Orgse was allegedly paying himself more than allotted went undetected for a lengthy period of time.
According to the mayor, in 2022, Orgse paid himself approximately €20,000 more, across several months, than allocated for those months.
He did the same in 2023, to the tune of €10,000 in additional money, while in 2024 that figure had risen to over €50,000 more than he was due; he additionally allegedly embezzled a little over €14,000 via false expenses claims.
This caught up with Orgse when he returned from vacation, two days earlier than scheduled, on October 25 this year then made a substantial transfer, Saat said.
According to the municipality's accountant, a transaction of this size was unusual, prompting closer checks. On doing this, it became clear that Orgse had been transferring funds to himself which he was not due.
Following the discovery, the municipality reviewed all its bank transactions and was able to identify Orgse's misappropriations.
No violations were found before the year 2022.
Upon being apprehended, Orgse confessed to his actions and told the mayor he needed the money for personal reasons.
He claimed the extra payments took the form of a loan, and pledged to repay everything.
No one else had been made aware of this "loan" arrangement, however, and Orgse did not provide specifics about his finance needs.
According to the mayor, Orgse's difficult personal situation was not apparent to his colleagues. "Our team is close-knit. We talk and notice things, but there was nothing noteworthy over these years [about Orgse]," said Saat.
Saat also noted that there were no signs that Orgse's income had gone up in any way.
"He lived a very modest lifestyle. It may be unfortunate to say it, but he dressed rather poorly and drove cars that resembled junkyard vehicles. There was no sign of any sudden additional income," Saat went on.
The municipality dismissed Orgse following the findings, on November 6.
The next day, he returned €14,174 in cash to the municipal cash register.
On November 11, the municipality filed a criminal report with the district prosecutor's office, and an investigation was launched.
Orgse does not deny misappropriating funds in his role as chief accountant.
However, he stated that he plans to return the money by the end of this year. "I'm currently selling properties to repay it," he said.
He also provided the municipality with a promissory note with a due date of December 31 this year.
Orgse said he did not wish to provide detailed explanations about why he needed more funds or why he decided to appropriate municipal funds.
He acknowledged that he could face criminal punishment as a result of his alleged actions. "Of course, this is a possibility which I don't rule out," he said.
When asked whether his felt needs for the money in question was worth the risk of potential penalty, Orgse responded vaguely, saying: "That's a matter of judgment, yes; who can say for sure."
He did express remorse over his actions, however.
Mayor Saats said the case represented a teachable moment for the municipality.
The authority had placed its trust in their chief accountant, who handled transfers, and was responsible for submitting annual financial reports.
Even auditors did not identify errors during their reporting.
The municipality has since reviewed user rights and limits at the bank it uses.
Saat said: "A dual-signature approval system for salary payments has been implemented. A multi-approver system already existed for invoices prior to this incident. Additionally, we have enhanced the municipality's internal oversight measures."
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Editor: Huko Aaspõllu, Andrew Whyte