Last week, a former Grove City employee pleaded to stealing more than $67,000 from the city.

Last week, a former Grove City employee pleaded to stealing more than $67,000 from the city.

Jacqueline K. Kincade, 62, a former payroll specialist for the city, pleaded guilty July 10 in Franklin Common Pleas Court to three felony counts -- theft in office, tampering with records and filing an incomplete or fraudulent income-tax return.

"This brings to closure a situation which should never have happened," said Mayor Richard "Ike" Stage. "It has caused the community considerable embarrassment and financial liability."

According to a release from the city, Judge Richard A. Frye announced he would seek restitution from Kincade and scheduled her sentencing for Thursday, Aug. 23.

Kincade, of Birch Park Drive in Prairie Township, was employed by the city from 1987 through January 2011. She could receive probation but a faces a sentence of up to seven years in prison and more than $20,000 in fines.

A report from the state auditor's office in October 2011 indicated Kincade wrote 26 checks to herself totaling $67,799 between Jan. 1, 2004 and Dec. 31, 2010. Bank records were only available for seven years prior to discovery of the thefts, though Kincade's employment with the city payroll department stretches back 17 years further.

The audit also noted there were instances in which payroll account deposits did not match payroll register reports.

The theft was discovered in December 2010 when the city received a notice from the Internal Revenue Service of funds due. In their investigation, city officials found 49 letters from the IRS in her desk at work, many serving notice of penalties for not properly withholding payroll taxes for Grove City employees.

Kincade is reported to have delayed or failed to pay withholding taxes for city employees to cover her thefts, resulting in penalties from the IRS and accumulated interest. She also diverted money from other city funds to conceal discrepancies created by the thefts.

"We had been paying penalties and interest for a long time, and we didn't know that," said Community and Business Relations Officer Don Walters. "They were paid by her without us knowing, using future income tax revenue."

In all, Walters said, the entire situation cost the city $942,869, which includes the money stolen, penalties and interest paid to the IRS, the cost to conduct the state audit, police overtime during the Franklin County Prosecutor's Office investigation and subsequent legal fees.

Last year, the IRS waived the $667,551 in unpaid penalties and interest on the penalties it had assessed the city for failing to pay withholding taxes.

Walters said the city is currently working with its insurance company to determine an appropriate claim settlement.