BEAUMONT, Texas – A forensic audit into how the Beaumont Independent School District spent a 2007 bond issue worth $388.6 million revealed rampant “poor management and poor oversight” that equated to about $7 million in authorized spending.

Jefferson County District Attorney Bob Wortham released results of the investigation in early February that showed several contractors, school officials and an insurance adjuster worked together to bilk the district out of millions, but statute of limitations on the possible crimes had run out, the Beaumont Enterprise reports.

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“A large percentage of the statute of limitations had already occurred by the time the audit was concluded,” First Assistant District Attorney Pat Knauth told the news site. “Discovering this kind of behavior, white collar crime, is very challenging.”

An auditing firm first flagged at least $7 million in unauthorized spending from the 2007 bond funds in a report to the superintendent in October 2015, and Wortham’s office spent a year reviewing the details of the 2,700 page document for possible crimes.

“The audit revealed that, during the period audited, the Beaumont Independent School District was poorly managed, that school board oversight was also very poor despite concerns voiced by two of its members, and that funds were poorly spent,” Wortham said in a statement.

The report, which was referred to a joint federal and state task force, highlighted six people or companies involved in possibly scamming the school district, including John Elamad, CEO of International Design and Consulting Group.

Elamad was hired to advise on engineering and architectural aspects of damages to Smith and King middle schools in the wake of Hurricane Ike in 2008, and he approved reports alleging contractor HRE completed work that went unfinished.

Elamad also “potentially conspired with former BISD Superintendent Carrol Thomas and former Chief Business Officer Robert Zingelmann to cover up HRE’s failure to finish the Smith project,” according to the news site.

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Assistant District Attorney Tommy Turner, who reviewed the audit, told the Enterprise Elamad was paid more than $1.2 million for his services through a contract that was not reviewed by the school board.

Also involved in the alleged scheme was insurance adjuster Scott Favre, who managed grants through FEMA and the Texas Education Agency for the work. The audit alleged Favre was paid at least $300,000 more than his contract allowed, and he played a role in as much as $1.5 million in overpayments for work.

The TEA was supposed to audit 16 districts that received grants for Hurricane Ike damage, including BISD, to ensure the money was properly spent, but never did so, which made impossible to prove the funds were misused.

“Wortham said the previous school board, which was ousted in July 2014 by the state education commissioner and replaced with a board of managers, ‘did not authorize (school board) lawyers to pursue’ investigations of the bond funds when taxpayers first started questioning how the money was being spent,” the Enterprise reports.

By the time the alleged crimes were uncovered, it was too late.

“Nobody was watching,” he said.

School board president Jimmy Simmons told the Enterprise the district is now pursuing “civil litigation on behalf of the district” but did not elaborate on the efforts.

Wortham noted that all of the bond funds were spent – albeit poorly – on school district projects, which included repairs to existing infrastructure, construction of new buildings and a multipurpose sports venue, KBMT reports.

The district attorney said that because of the statute of limitations had run out, criminal actions against administrators and hired contractors is very limited, though his office “has not closed any of our investigations.”

Wortham also said his office is also continuing to investigate “other matters” involving district spending.