When the COVID-19 pandemic upended the workplace, jobs went remote, offices had to adopt new technologies and longtime employees suddenly departed. Federal stimulus dollars flooded into state and local government accounts, and fraudsters had a heyday.

The pandemic was only one of several recent disruptions to roil the financial operations of state and local governments, which oversee $4 trillion a year in spending. Payments — and paper trails — have gone digital. Scammers can now use AI tools to streamline their hunt for victims, including within government agencies. And local newspapers in the United States, one historic line of defense against graft, are disappearing at a rate of 2.5 a week.

Few states have a better view into the latest ways people are stealing and otherwise misspending local government dollars than Washington.

Its Office of the State Auditor is the second-biggest state auditing shop in the country by budget ($64 million) and fifth by employee count (400). By state statute, the office must regularly examine the books and operations of Washington’s every town, county, port, stadium authority, asparagus commission, cemetery district, drainage district and mosquito control district. It conducts as many as 2,400 state and local audits a year, rooting out fraud and waste.

To get a better sense of what these audits can tell us about how fraud is evolving, ProPublica met twice recently with Brandi Pritchard, a careerlong Washington auditor who helps lead the state’s fraud-preventing special investigations unit.

In our conversations, which have been edited for length and clarity, Pritchard described how fraudsters seem to be stealing more money more quickly and why her job hasn’t made her lose her faith in humanity.

Has fraud changed since the pandemic?

Right as the pandemic was happening, when everybody was remote, there was a huge increase in fraud risk. All so quickly, governments had to change their entire internal control structure. We’re used to walking into somebody’s office and setting a piece of paper on their desk to review. Now you could no longer do that. But since then it feels like it’s mostly back to normal, with exceptions.

What are the exceptions?

With remote work, we’re starting to see some problems with folks working two “full-time jobs” with different agencies. They’re supposed to be working the full 40 hours from 8 to 5 for two agencies. Clearly, that’s physically impossible.

Another thing that came out of the pandemic: It forced governments to move to a more electronic documentation system. That’s great and more efficient, but the downside is it can be more difficult to spot forgery or somebody making an edit, using Photoshop or other tools, to financial statements. [In one recent case, the auditor’s office said that an altered utility bill led to an investigation of a former city clerk-treasurer, who was eventually charged with forgery involving checks totaling $3,700. Danni Lee Speelman pleaded not guilty and awaits trial in July. According to the auditor’s report, the clerk said she was “not responsible for the altered customer utility statement and attributed it to a computer system change.”]

Obviously, technology has made a lot of advances since the pandemic, AI being a big part of that. There’s FraudGPT, which is like ChatGPT — but it’s for fraudsters. [The bot’s developer claims it can create malicious computer code, write scam letters and hack websites.] It’s paving the path for them to easily get fake checks, fake statement templates, emails to do phishing schemes and so on. We wouldn’t know whether folks are using FraudGPT or not in the schemes we see, but I could guess based on the emails our governments are falling for.

You see the phishing emails they fall for?

Our governments are required to give us a copy. And it’s amazing how many commonalities I have found, which tells me either these originated from one particular crime ring, or maybe they’re all using FraudGPT. The word “kindly” shows up in almost every email. “Can you kindly change this?” “Kindly reply back to me?” and so on.

Any other examples beyond “kindly”?

There’s a sense of urgency. You know, they’ll wait till the day before payroll, then suddenly it’s, “I know payroll is going out tomorrow. Can you quickly change it to my new bank account?”

So is fraud getting worse? Better?

I don’t know that our case counts have really changed a ton, but people are stealing more and quicker, and we’ve had a few cases where it didn’t appear that they tried very hard to cover it up.

The town of Cusick is a great example of that. The town’s clerk treasurer drained the bank account from $200,000 to $240-something in a matter of months. It was alarming, the intensity with which that case unfolded. [In March, the clerk treasurer, Luke Michael Servas, was indicted on accusations of wire fraud and bank fraud, among other charges. He pleaded not guilty and awaits trial. Servas did not respond to ProPublica’s requests for comments before publication.]

How did you find that one?

We were attempting to start a routine audit, reaching out to the clerk treasurer, and to be honest, he was kind of ghosting us. He wasn’t giving us the records we needed. We eventually reached out to the mayor, who worked in concert with a council member to get ahold of the bank statements. As soon as they saw the statement, they noticed.

Is this typical? How often do you uncover fraud through routine audits?

Most fraud is detected by tips. About 5% of fraud is detected by auditors. I will say that more recently, in the last year or so, it feels like our auditors are finding more. And the cases that involve very, very large dollar amounts, we’re the ones finding those: Pierce County Housing Authority, close to $7 million. [A former Housing Authority executive, Cova Campbell, pleaded guilty to wire fraud in early 2021. Through her attorney, she declined to comment on her case.] We’re drafting a report right now about one we found that was close to a million. Then there’s Cusick. That was hundreds of thousands, and we found that one.

Any guesses as to why the auditor’s office is the one finding these high-dollar cases?

I wish that I knew the answer to that, because then we’d probably find them more quickly. Thinking back, we found most by reviewing bank statements. So that gets down to the question, “Why are governments struggling to do their own reviews?” In some cases, I think it’s because the elected officials didn’t run for election to review bank statements. We try to convince them of their fiduciary role and how down in the weeds that might have to be.

That’s like Cusick, right? For years you had been warning them they didn’t have proper financial controls. Are repeat offenders common, or does one bad audit convince most governments to get their affairs in order?

I wish I could say it was an outlier. We have probably four or five other small towns I could name offhand. Because they’re small, they put a lot of trust in the people they hire to do these finance roles. One thing we feel is problematic is when elected officials are related to each other. What good is a review if the person reviewing you is your wife or your mother or your father? But when we talk to governments about this, they say these are the only people who are willing to serve. [In its response to the auditor’s report, the town of Cusick said it opened a new bank account that allows multiple town officials to review online statements and that now its “transactions and payrolls are cross-checked by clerks.”]

What about the psychology of all this? How do fraudsters justify what they did?

One thing we hear a lot is that it wasn’t fraud: “I didn’t take the money. It wasn’t a misappropriation. It was a loan, and I intended to pay it back.” I don’t know if they actually convince themselves of that, but I do feel like some of them have, because it’s easier to look yourself in the mirror as somebody who borrowed money. I could speculate all day long. One thing I do know is that many of them have gambling problems.

You enjoy catching people in the act?

Yes and no. My honest answer is that we don’t want to catch it. We want our governments to have the right controls to catch it themselves.

What’s the most shocking fraud you’ve ever run across?

Pierce County Housing Authority comes to mind. As far as we can tell, it’s the largest government misappropriation [by an employee] in Washington state’s history. And considering who the users of that particular district are, low-income folks needing housing assistance, that makes it even more staggering.

But on the fraud-nerdy side of things, it’s a wonderful case study. The way our auditor used professional skepticism was absolutely magnificent, in that she wasn’t just paying attention to the physical pieces of paper in front of her. She was capturing the environment, the culture there, and it felt off to her. The way our subject treated her staff compared to the way she treated the auditors felt off. So by the time the auditor looked at that bank statement and saw that weird wire to some title company, she was on high alert.

How did your subject treat auditors differently than she treated her employees?

She raised her voice quite often at her staff. She did not treat them very well. But when we had a question, she was incredibly kind. The auditor felt like the subject was trying to butter us up. The other part of it was, if we had a question, we weren’t allowed to talk to staff. Everything went straight to our subject, which was another red flag.

After two decades in this job, has your view of humanity darkened?

Not really. I think working here has made me think better overall of humanity. I’m seeing so many people choose a career in public service. Whether that’s elected officials, department heads or down to the finance staff, there’s just so many people that work so incredibly hard and probably get a lot of grief, unfortunately. We have our fraudsters, but it’s such a small percentage.