Audit: School accounts missing fundsJuly 9, 2013
By CLAIRE MOORMAN
Herald Staff Writer
LINCOLN CITY — A North Spencer School Corp. treasurer has been accused of improperly accounting for more than $70,000 over the past six school years.
A recently released state audit shows that former Heritage Hills High School and Middle School extracurricular treasurer Melissa “Missy” Isaacs failed to deposit large sums of money collected from textbook rentals, school parking permits, athletic funds and school lunches. She also allegedly issued several checks to herself from various school funds.
The audit findings have been sent to the Spencer County prosecutor’s office for review. She was released from her position at the corporation in February after having worked at the schools for six school years.
According to the audit, Issacs failed to deposit a total of $45,705 in textbook rental fees from 2007 to 2013. As the extracurricular treasurer, she was responsible for collecting yearly book fees from parents and entering them into the school’s account. A total of $1,115 from athletics-related fees in 2009 and 2010, $1,655 in parking permit fees from 2011 to 2013 and $7,862 in school lunch receipts from February 2013 were also not deposited.
The audit report says that in August 2011, Isaacs withdrew $4,252 from an athletic fund money market account using a cashier’s check and later altered the outstanding check list on the bank reconcilement to allow the bank balance to match the ledger.
Isaacs allegedly issued three checks to herself totalling $1,000 in June 2011, $3,000 in July 2011 and $3,000 in August 2012 for a stipend for extra duties, which were not included in the payroll system or on the salary ordinance or resolution. She is also accused of writing herself a check for $500 in August 2012 as an advance payment for an anticipated mileage expense and for paying travel claims without supporting documentation, such as receipts.
The auditor also found that Isaacs often failed to deposit checks within a reasonable time. In some instances, money was held for more than four years, and some checks located in her files were too old to be deposited.
The state auditor held exit conferences in April and May with Superintendent Dan Scherry, corporation treasurer Virlee Huffman, Heritage Hills High School Principal Nick Alcorn and Assistant Principal Jeff Cochren, Heritage Hills Middle School Principal Chad Schnieders and several school board members. All of the school officials concurred with the audit findings, according to the report. The findings were also discussed with Isaacs in April. She provided a written response to the accusations, claiming that she had deposited all money given to her for the athletic fund and other missing deposits were simply oversights.
“As far as timely deposits and correct forms, I have asked the auditors every time they have come in if it was OK the way we were doing things, and every time the answer was, ”˜Yes,’” Isaacs wrote.
Isaacs has been asked to repay $71,923 to reimburse the school corporation for the missing deposits along with $34,134 to pay for the cost of conducting the audit. As of June 27, she had repaid $22,502 of that total.
Her position was bonded for $50,000 each year, meaning the bonding agency will reimburse the corporation for up to that amount. Scherry explained that because no more than $50,000 was lost from any single year for which the audit showed missing deposits, the corporation will recoup all of the money. Isaacs will pay her fees to the bonding agency.
Scherry said that he, board members and other school officials were kept apprised of the auditor’s findings throughout the process, which began in October and lasted several months. He added that administrators had not noticed any reason to suspect that Isaacs was improperly accounting before the auditor made her findings known.
“She did some really good work with computer skills and got that (treasurer) position to a point where we felt it was up to the 21st century expectations. We were pleased with that side of things,” Scherry said of Isaacs. “There’s always some flags that go up and you have to discern whether or not there’s intent there.”
Now, the case is in the hands of the county prosecutor. The school corporation will not seek charges against Isaacs because of the bonding agency reimbursement. Scherry said he is hopeful that similar situations can be avoided in the future with diligence from all administrators and treasurers.
“We have extra signatures being required on things. For extra-curricular accounts specifically and our teachers who are sponsoring those activities, we’re making sure that when they turn in a deposit, they are getting the deposit slip and receipt back and it’s matching up with what they turned in,” he said. “Those things are going to be shored up for a decade or however long it takes before people get comfortable.”
The school board hired Martha Barnett in April to fill the vacant treasurer position. Scherry said that while there will be a system of “checks and balances” in place for school accounts, it is also important that the treasurers still retain autonomy.
“You’ve got to have a certain amount of trust in each other,” he said. “To be double- and triple-checking everything that everybody does is a challenge.”
Contact Claire Moorman at email@example.com.
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