Auditors last year flagged five cases in which they say money was misappropriated at Baton Rouge public schools, ranging from $530 stolen overnight at a middle school to more than $21,000 in cash raised from candy sales and other events that was never deposited in the bank.
The scattered cases are highlighted in the latest annual audit for the East Baton Rouge Parish school system, released Monday morning. It covers all financial activity in the state’s second largest school district during the 2017-18 fiscal year, which ended June 30.
A preliminary version of the audit, prepared by the system's outside auditors, Postlethwaite & Netterville, was presented to the School Board on Dec. 6. However, the final version was not released until Monday after it was posted online by the Louisiana Legislative Auditor.
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The cases of apparent misappropriation of money were not part of the Dec. 6 presentation. They appear at the end of the 268-page document under a section called “Report To Management.” All five cases were uncovered by the school system's own internal staff auditor.
Postlethwaite & Netterville found other problems, with bank reconciliations, collections and disbursements — enough that the school system has committed to corrective action plans to improve how it handles those areas. Nevertheless, the outside auditors have issued an "unmodified opinion" saying that the school system's basic financial statements are sound.
Here are the five instances of alleged misappropriation of funds:
- A former employee of Westminster Elementary over a six-month period deposited barely half of the cash raised from candy sales, tuition for an extended day program and for other school events including a school trip. A total of $21,274 was missing. The former employee, who was not identified, agreed last summer to repay the school system $11,015 via monthly installments, though had paid back only $450 by Thanksgiving.
- A former employee of McKinley High School tapped into the student activity fund to purchase $3,468 worth of cheerleader uniforms for a cheer group not sponsored by the high school. The individual, who was not identified, was arrested on Dec. 11.
- An employee of University Terrace Elementary failed to log about $3,000 worth of sales of food, snack and other concessions over a 10-month period. The employee later reimbursed the school $3,150, the estimated amount of missing money that had not been deposited in the back.
- A total of $1,270.74 was fraudulently withdrawn electronically from the bank account of Lee High School. No school employees were implicated in what authorities said could have been a fraud by someone outside the school system. The bank later refunded the money.
- A teacher at Istrouma Middle reported that $530 was stolen overnight from the teacher’s classroom. The teacher used his personal money to repay the students who had contributed the money. The missing money was reported to the Sheriff’s Office as a burglary, but no arrests have as yet been made or any of the money returned.
Postlethwaite & Netterville auditors commended the school system’s internal auditor for uncovering the problems and actions taken in response, but said more needs to be done to prevent problems in the future.
“However, given the magnitude and significance of the internal auditor's findings, the system should consider increased frequency of audits, additional audit resources and enhanced training and education of school principals and administrative staff,” the auditors recommended.
At least one school, Tara High, had problems that were uncovered by the outside auditing firm rather than the school system's own, internal auditor.
Postlethwaite & Netterville found that almost $2,000 was spent without supporting documentation. That included $1,261 was spent on travel on school related business. In addition, the outside auditors found, $22,000 worth of bills were paid late, prompting $57 in interest charges.
In its response to Postlethwaite & Netterville’s findings, the school system pledged to offer more training for executive secretaries and other school level personnel.
“It is also our goal to have more of a presence within the schools,” according to the response. “We will begin conducting random visits at the school where the Internal Audit department will perform an overview of the record-keeping processes to ensure that the financial records are being properly maintained.”
The school system, however, made it clear it’s not looking to hire more staff to fix these problems.
“At this time. It would be cost prohibitive for the school system to hire additional 12-month staff members,” responded the school system. “The benefits received from the hiring of additional non-instructional staff at the school level are far less that the costs of salaries and benefits associated with these additional positions.”