Fraud strikes every school district, no one is immune. Just look at the headlines for the last few years for the state of Texas. Each corner of the state has been hit by school district fraud.
In East Texas, a school district had a rash of high-profile frauds. At just this one district there was a ghost employee scheme ($300K), a payment/wire fraud scheme ($4M), and other fraud schemes that lead to the takeover of the district by the state.
In central Texas, a former associate superintendent for operations and construction was recently sentenced to a decade in prison. He was guilty of misdirecting district funds, property and materials associated with the district’s 2008 bond projects (construction and procurement fraud with a district vendor).
North Texas is not immune either. A Dallas-Ft. Worth area district suffered a $2M payment fraud. In this scheme, an email was sent to the district’s Director of Accounting, falsely claiming to contain updated banking information for a construction company with which the ISD did business. The information was for the fraudster’s personal bank account. This fraudster had no ties to the district or any of its vendors.
Finally, a West Texas school district’s superintendent was sentenced to 42 months in federal prison. His crime? Committing state mandated student assessment fraud. Why? Because his bonuses were tied to student performance on these standardized tests.
As you can see, school district fraud knows no boundaries. What might be surprising is that in each of these fraud cases, there were some sort of controls in place. However, either the controls were ignored or circumvented by those with the power to do so. This is why having a robust series of internal controls is not enough. It is also important to periodically test and update those controls to meet the changing work environment.
EduFruad is committed to helping school districts like yours become aware that you are susceptible to fraud and provide you with the tools to combat any potenital frauds. Please keep coming back to this site for future blog posts that deal with fraud detection and prevention, common fraud schemes, and different fraud cases that we can dissect and learn how to keep fraud out of your district. In addition, EduFraud is developing courses (COMING SOON) for you, your staff, your board, and your booster clubs and PTAs to be able to help the fight fraud and protect the assets and reputation of your district.
