Well, here we go with another school district being the victim of millions in not ONE, but THREE different employee embezzlements...one for $4.3-million, a second for $338,000 and a third for another $1-million... there is something drastically wrong nationally with management skills related to school districts...
vj
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from the CBS affiliate in Salt Lake City, Utah...
http://www.kutv.com/news/local/story.aspx?content_id=a6f2d1b8-8630-47d4-b912-3f8f40f82b71
School Districts Addressing Problems Released In Audit
Two school districts ( in the Salt Lake City, Utah area) that uncovered cases of employee embezzlement and fraud are addressing problems in their systems that allowed the fraud to take place, according to a legislative audit.
The report also says that most school districts have controls that would prevent fraud from ever taking place.
“We regret the fact that this did go on, but we have made a concerted effort and put into place the controls that are necessary to eliminate the chances of this going on in the future,” said Bruce Williams, business administrator for Davis School District.
Nearly a year ago, a federal indictment accused the district’s former Title I director and her husband of defrauding the Davis District out of at least $4.3 million by selling unauthorized copies of books and materials to the school district at highly inflated prices. A second indictment alleged the director’s assistant embezzled another $338,000.
Months later, a former Weber School District secretary acknowledged embezzling nearly $1 million over a five-year period.
State leaders worried there weren’t enough safeguards to prevent fraud throughout the state and ordered the audit. The audit found Davis has addressed its internal control deficiencies and other districts do not have the weaknesses initially found in Davis.
Davis leaders started working on ways to safeguard against further fraud nearly three years ago after discovering fraudulent activity, which launched an FBI investigation.
Since then, officials have limited employees’ ability to input new vendors into a computer system and beefed up the process for approving sole-source vendors. A hotline has also been established to receive anonymous tips alerting auditors about suspected fraud. Employees must also sign a conflict-of-interest and ethics statement.
“We welcomed the audit. ... We have taken very seriously some of the concerns that were brought out, and a lot of the issues have been dealt with,” Williams said. “I think the audit validated the things that we have done – it’s accurate and reflects well some of the things we have done.”
Auditors also examined Box Elder, Duchesne and Washington school districts.
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Here is a separate Editorial column on the subject from the Salt Lake Tribune
http://www.sltrib.com/ci_7205713
Keeping watch: School districts must keep track of their money
Tribune Editorial
Salt Lake Tribune
"I put those people in place. I trusted them. I had no idea they would do anything like this."
- BERNIE EBBERS
WorldCom CEO, serving a 25-year prison term for fraud and conspiracy in the largest accounting scandal in U.S. history
Sometimes trusting your fellow man is a mistake. Davis School District found that out when it apparently was bilked out of at least $4.3 million. Three district employees have been indicted for fraud and embezzlement in that case.
A Legislative Auditor General's performance audit of other Utah school districts found that the "weaknesses" in the Davis control system have been corrected and other districts aren't vulnerable to the same type of fraud since they have adequate controls in place.
That is comforting, as far as it goes. But the audit also showed that some district foundations, organizations that raise money to supplement state funding for school programs and materials, are not being watched adequately by the school districts they are meant to help.
The Weber School District Foundation was the victim of an embezzlement scheme and lost more than $1 million because no one was overseeing how donation checks were recorded and deposited.
Such sloppy accounting procedures must be corrected. There is no excuse for such negligence when money that is meant for schoolchildren is involved.
The audit suggests that every school in a district receive regular reports so that principals are aware of donations and how much foundation money should be in the school's account at all times. That seems to make good sense.
The audit also found that several schools in Granite and Jordan districts had no idea of how much money had been donated or how to monitor their account activity. That only invites unscrupulous employees to dip into the till while backs are turned.
The auditors suggest better "oversight and guidance," not only of state funds and donations but of federal Title I funds, some of which were lost in the Davis District fleecing.
The report sounds a low-key alarm and offers common-sense remedies that school districts should immediately adopt. Utah's underfunded schools need every dime they are due. Only proper accounting procedures will ensure delivery.
