“Blind trust is the opposite of oversight.”
Oklahoma State Auditor & Inspector [SA&I] Cindy Byrd today released her investigative audit of the Varnum Public School District in Seminole County. District Attorney Erik Johnson requested the audit in response to concerns raised by the Seminole County Sheriff’s Office. The audit period covered June 1, 2018 through June 30, 2022.
“The signature stamp strikes again,” Auditor Cindy Byrd said. “The use of a signature stamp, combined with instances of individuals signing on behalf of others without proper authorization, contributed significantly to the findings of this audit report. I strongly encourage every government entity in Oklahoma to discontinue the use of signature stamps and implement stricter controls over authorization for approvals.”
Yes folks, there are “Red Neck Auto-Pens” here in Oklahoma.
Among the problematic findings are:
- Check Tampering
- Benard, the District’s Encumbrance Clerk and the Superintendent Secretary, issued herself fraudulent payments totaling $9,621.80.
- Benard changed vendor payee information in the accounting software to print checks payable to herself. She then endorsed and deposited these checks into her personal bank account.
- Benard stated during an interview that she routinely signed Superintendent Brewer’s name on checks.
- Undocumented Purchases
- Between June 2018 and June 2020, the District spent $92,593.48 on Amazon purchases.
- Supporting documentation could not be provided for 27 of 61 Amazon purchases reviewed.
- The District made 77 purchases with the Activity Fund debit card in FY 2021. All 77 transactions, totaling $8,300.94, lacked supporting documentation.
- The District wrote a total of 206 checks from both the Activity Fund and the General Fund. 150 of those payments (73%) did not have adequate supporting documentation or contained conflicting records.
- Missing Cash Deposits
- Collections from school fundraisers, entrance fees, and concession sales, were required to be deposited into the Activity Fund. In FY 2021, bank deposits were $9,581.55 less than the cash collected.
- The actual loss may be greater. The review was limited to deposits for which supporting documentation was available. Numerous records were missing.
- Restitution Unpaid
- Benard signed a Resignation Agreement dated August 24, 2021. The Agreement stated that the District believed Benard had embezzled money from its accounts.
- Benard acknowledged misconduct and agreed to repay $50,000. No one could explain how the $50,000 figure was determined.
- Benard made two $500 payments before discontinuing further payments on the advice of her legal counsel.
“We had a particularly bad actor in this case, but the ultimate responsibility falls on the members of the school board,” said Auditor Byrd. “One of the fundamental duties of a school board is to keep an eye on the money. This includes overseeing the integrity of deposits and withdrawals from the district’s accounts. Blind trust is the opposite of oversight.”
This is the 227th audit released by Cindy Byrd this fiscal year.
The full audit report is posted here on the Oklahoma State Auditor & Inspector’s official website.
