OKLAHOMA CITY — An investigative audit of the Varnum Public Schools district in Seminole County found problems including check tampering, undocumented purchases and missing cash deposits, State Auditor and Inspector Cindy Byrd said Thursday.
Byrd’s office conducted the audit at the request of Erik Johnson, district attorney for District 22, the office said Thursday in a news release. Johnson sought the audit in response to concerns that the Seminole County Sheriff’s Office had raised.
The district’s use of a signature stamp, combined with incidents where people signed documents on behalf of others without proper authorization, contributed significantly to the findings in the audit report, Byrd said.
“The signature stamp strikes again,” she said. “I strongly encourage every government entity in Oklahoma to discontinue the use of signature stamps and implement stricter controls over authorization for approvals.”
According to the news release, the problems uncovered by the audit included:
•Check tampering: Stacey Benard, the district’s encumbrance clerk and secretary to then-Superintendent David Brewer, issued fraudulent payments totaling $9,621.80 to herself.
Benard also changed vendor payee information in the accounting software to print checks payable to herself. She then deposited those checks into her personal bank account.
•Undocumented purchases: The district spent $92,59348 on Amazon purchases between June 2018 and June 2020 but could not provide supporting documents for 27 of the 61 purchases reviewed.
The district also made 77 purchases with the activity fund debit card in fiscal year 2021. All of those transactions, totaling $8,300.84, lacked supporting documents.
The district wrote 206 checks from the activity fund and the general fund, but 150 of those payments either did not have adequate documents 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. But in fiscal year 2021, bank deposits were $9,581.55 less than the cash that had been collected.
The auditor’s office noted that the actual cash loss may be greater because the review was limited to deposits for which supporting documents were available.
“Numerous records were missing,” the office said.
•Restitution unpaid: Benard signed an Aug. 24, 2021, resignation agreement, which said district officials believed that she had embezzled money from its accounts.
Benard acknowledged misconduct and agreed to repay $50,000, but no one could explain how that figure was determine. She made two $500 payments before discontinuing future payments on the advice of her legal counsel.
The Varnum case had a bad actor, but the ultimate responsibility for monitoring the district’s finances lay with the members of the school board, Byrd said.
“One of the fundamental duties of a school board is to keep an eye on the money,” she said. “This includes overseeing the integrity of deposits and withdrawals from the district’s accounts. Blind trust is the opposite of oversight.”
The full report is available through the Oklahoma State Auditor’s and Inspector’s website, www.sai.ok.gov.