District Administration - August 2009 - (Page 32)
security By alan DessoFF t’s no surprise that schools are as vulnerable to fraud as the private sector or any other segment of government. crimes in districts include collusion with outside vendors who provide kickbacks to employees, misuse of district-issued credit cards, embezzlement of district funds, and theft of district property. “Fraud happens everywhere,” says David neter, chief business officer at Wake county (n.c.) public school system. The district created the new position in 2006 after losing at least $3.8 million in a case wherein a local company sent the district phony invoices, which the district paid without receiving anything in return. Then the company kicked back some of the money to the director and other employees of the district’s transportation department and they used the money to buy luxury items. neter is a cpa with an MBa from Duke university. There is no national data on fraud in school districts. But, says Don Mullinax, a former inspector general in the los angeles unified school District, “i think there is a lot more than administrators are aware of because they’re not looking for it, and if you’re not looking, you’re not going to find it until it hits you.” he now leads the government practice team of Forensic/strategic solutions, a forensic accounting firm that has worked with districts including Wake county and lausD. Most district leaders lack ways to uncover it, and when it is found, it is not always reported, he says. “What’s scary is that a lot of administrators and principals figure that’s not their job,” Mullinax says. “They are hired to be educators, and they don’t have a background in financial management or accounting or auditing, so they don’t focus on fraud. They wouldn’t see it if it walks up and hits them in the face.” and sometimes what looks like fraud is not. The california state legislature created the Fiscal crisis & Management assistance team to conduct audits if district leaders suspect possible fraud. FcMat conducts up to 50 audits a year and often finds that while poor internal controls, processes and procedures give the appearance of fraud, those cases generally turn out to be “either a compliance issue or some procedural policy not being followed,” says Joel D. Montero, ceo of the fiscal management team. FcMat recommends about 15 percent of the cases it audits for further investigation by law enforcement authorities. 32 August 2009 I Fighting Fraud in Schools School Challenges in the los Gatos (calif.) union school District in 2006-2007, a district technology staff member was found guilty of stealing about $200,000 of computer equipment from the district and selling it to a local reseller. When richard Whitemore was appointed los Gatos superintendent in May 2008, he assured the community that he would manage better the district’s financial and physical assets. “We have put the building blocks in place for a best-in-class inventory management system,” Whitmore stated. he declined to give details. in los angeles, Mullinax, while he was inspector general, investigated a high school construction project, the Belmont learning complex, that began in 1997 with cost estimates that rose to $200 million, making it the most expensive project of its type in the united states before the district stopped construction in 2000, he says. he called in Forensic/strategic Lax controls open doors to crimes.
Table of Contents for the Digital Edition of District Administration - August 2009
District Administration - August 2009
From the Editor
Standards & Assessment
Tell It to the Mayor
Fighting Fraud in Schools
Recovery High Schools
Keeping the Community in the Know
How Well Does This Web Site Work?
District Administration - August 2009