Eight months after the Santa Barbara Police Department’s business manager was arrested for allegedly embezzling parking-citation revenues, a forensic audit has determined more than $500,000 was stolen, according to the Santa Barbara County District Attorney’s Office.

Karen Flores

Karen Flores

Earlier estimates had placed the amount allegedly taken by Karen Flores at $200,000.

Flores assumed responsibility for the parking-citation collection after her supervisor’s position was eliminated in 2004 to save money, and various other duties were split between Deputy Chief Frank Mannix and the head of administrative services.

Only now is the department addressing that latest vacancy, and the City Council approved bringing back the business manager position at its meeting last week. The new hire will be responsible for managing the budget and supervising business-office and parking-citation collection staff.

Financial discrepancies were found by the Finance Department, which launched a seven-month investigation into Flores.

She allegedly began embezzling from the city in 2006, according to the criminal complaint, and is charged with grand theft by embezzlement, destroying parking citations, filing false income tax returns from 2007 to 2010, and the felony of public officer crime, which applies to people responsible for safekeeping public money.

She was a civilian employee with the department for 22 years.

How so much money disappeared without earlier warning signs may only be explained at trial.

A very detailed forensic audit looked into the city finances and Flores’ personal accounts to track down each dollar, according to Senior Deputy District Attorney Brian Cota.

Embezzlement cases are nothing new to Cota, who is prosecuting the Montecito Motors case and obtained a five-year prison sentence for Kim Herman, a woman who stole $365,000 from the local dentist she worked for as an office manager.

Long-term embezzlement cases often arise out of opportunity, not need, he has said.

“The problem with these cases is, at a certain point, you’re going to have to trust someone,” he said. “My advice is always of course to trust but verify.”

Police Chief Cam Sanchez called the embezzlement “tragic and very disappointing,” and Mannix said the department was shocked when it first learned of the investigation into Flores.

“The nature of her position made it a lot easier to find the opportunities where money could be taken,” Finance Director Bob Samario has told Noozhawk.

The Finance Department found the discrepancies that launched the investigation, but it’s more difficult when the person is in a position of authority and can manipulate financial records, he added.

Annual audits of the city’s finances make sure the Comprehensive Annual Financial Reports are accurate; they’re not designed to catch what amounts to maybe $100,000 annually versus the hundreds of millions handled by City Hall, he said.

Parks & Recreation collects money for summer school classes, community development collects planning and permit fees, and the Police Department gets parking citation revenue. But out of a $250 million operating budget, $100,000 is insignificant from the perspective of an audit, according to Samario.

The city’s insurance covers all employees who handle cash, and it appears the insurance would cover the amount allegedly embezzled by Flores. However, the city has “a long way to go before we get insurance to agree what the loss really is, and what’s attributable to her,” Samario said.

Flores’ next hearing is scheduled for June 15 in Superior Court, and she could be facing nine years in state prison and paying restitution if convicted.

She was released from the County Jail after making bail, but with the conditions that she not access any California Public Employees Retirement System pension or benefits without court approval, hold a job that handles financial transactions, contact police employees or leave the county.

Noozhawk staff writer Giana Magnoli can be reached at gmagnoli@noozhawk.com. Follow Noozhawk on Twitter: @noozhawk, @NoozhawkNews and @NoozhawkBiz. Connect with Noozhawk on Facebook.

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Giana Magnoli, Noozhawk Managing Editor

Noozhawk managing editor Giana Magnoli can be reached at gmagnoli@noozhawk.com.