(This story was updated at 3:40 p.m.)

A state audit found over half a million dollars in cash payments made to the Clerk of Court office in Waterloo were never deposited and a former bookkeeper has been charged with four counts of first degree theft. State Auditor Dave Vaudt says the money came from people who had been convicted of a crime and who were using cash to pay fines and court fees.

"An individual was able to take cash deposits and record them as the individual working for community service in lieu of paying cash," Vaudt says. The audit reviewed records from January 1st, 2004 through the end of 2007 and identified almost 540-thousand dollars of "undeposited collections."

Tina Zieser, a former bookkeeper in the Clerk’s office, resigned on December 21st, 2007. "As in many cases, there isn’t a good track record of what happened to the cash," Vaudt says. The audit did find Zieser deposited over $28,000 in cash to her personal checking account, plus she used over $6,000 in cash to pay off her credit card bills.

The audit also found Zieser and her husband made nearly $13,000 in cash payments on their personal loans, too. Zieser was arrested Wednesday. Vaudt says there were two tip-offs that Zieser was doing something wrong. "They had a cash reconciliation problem one day and, once they investigated, they found a particular payment for $380 that they couldn’t find deposited, so that alerted them," Vaudt says.

"Previously, the office had received a call from a probation officer who indicated he was working with a particular person who said they had a receipt for a cash payment they had made, but the court on-line system said the person had done community service in lieu of paying cash, so those two things really sparked the investigation."

Many of those convicted of crime pay their fines in cash and the auditor says Iowa’s 100 Clerk of Court offices are making some changes as a result of this case.

"In this case, obviously, sometimes there’s a weakness within the control systems and it definitely identified it and the court system right now is looking at changing all those procedures and addressing the weakness that we found," Vaudt says.

Employees in the Black Hawk County Clerk of Court office shared computer passwords, so there is now strict enforcement of computer password use to be able to track who is recording transactions when fines and fees are being paid.