GRANGER, Iowa – The horrific fact is that large-scale embezzlement happens far too often in America’s public school districts, frequently because adequate accountability procedures are not built into financial systems.
Lots of people deserve a share of the blame when this occurs: the employees who actually steal the money, the district administrators who don’t keep a close eye on it, and citizens and local reporters who fail to press those administrators to make sure safeguards are in place.
One of far too many examples came from Iowa’s Woodward-Granger Community School District in 2017, when an auditor determined that the district lost more than $190,000 through alleged payroll theft.
The case apparently involves the district’s former business manager, Missy Lantz, who resigned in 2017, not long after payroll irregularities were discovered. We have found no reports that Lantz has been charged with any crimes, but the situation, as reported earlier this year by ThePerryChief.com, cast a dark light on her.
Shockingly, it appears that money had been disappearing through the payroll system for three long years before anyone caught on, and Lantz was allegedly receiving a lot more money than she ordinarily would.
“According to the Auditor’s report from Nolte, Cornman & Johnson PC, the payroll calendars for 2012, 2013 and 2014 appear to be calculated correctly, but a total of 101 extra checks were written to former W-G Business Manager Missy Lantz between 2015 and 2017, totaling $190,511.43 over that period,” the news report said.
The fact that the money disappeared in the first place, right from under the school district’s nose over an extended period of time, was inexcusable enough. Even worse was that there was apparently no guarantee that it could be recovered.
“…(T)he District notified their insurer of a possible loss that might be covered by insurance, and also notified the Iowa Board of Educational Examiners, which is the licensing board for School business officials,” the news report said.
“The District will pursue every means available to recover the loss via refunds, insurance, and/or the individual responsible for the loss.”
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Note the phrases “might be covered by insurance” and that the district will pursue “every means available” to get the money back. That sounds like there’s at least a decent chance that the money is gone forever.
This should serve as a reminder to taxpayers everywhere (as well as local education reporters) that they need to be proactive and find out what kind of controls are in place to prevent this sort of thing from happening.
Asking questions now could prevent catastrophic losses of school resources down the road.
A preliminary auditor’s report that was recently released revealed that the Woodward-Granger School District lost approximately $190,000, according to a statement recently released by Superintendent Brad Anderson.
According to the statement, the investigation is still ongoing.
“The auditor indicated that more work needed to be done before its work could be concluded,” Anderson stated. “The District has notified local law enforcement and the Dallas County Attorney’s office. Their investigation is pending.”
“In the last quarter of 2015, six extra checks were written to the payroll clerk,” the report explains. “The gross amount of these checks was $11,171.79. Also, the contracts were adjusted to increase the direct deposits gross by $3,953.32.”
Additionally, the employer’s share of social security, Medicare and IPERS for those excess wages was about $2,507.74.
The report reveals that in the 2016 calendar year, 54 extra checks were written to Lantz. While seven direct deposit checks were voided on the system, they were included in the direct deposit list to be deposited in the employee’s bank accounts.
“Total gross salary paid out to the employee was $146,984.64,” the report explains. “The W-2 filed for 2016 had a gross payroll of $65,307.57, a difference of $81.677.07. The net checks the employee received on this amount was $67,605.86.”
The report states that the direct deposit checks were again manipulated by increasing contracts, adjusting the number of payroll periods and adjusting the number of contract payments completed.
From Jan 8 through Aug. 15, 2017, 41 extra checks were written to Lantz, along with the direct deposits for a total gross salary of $153,570.74.
“The contracts for the period were $64,369.16, leaving a gross of $91,201.52 not supported by contracts,” according to the report.
As previously suspected by school officials, the preliminary report confirmed that there has been no adverse impact on District programs and services as a result of the loss.
The news release stated that the District notified their insurer of a possible loss that might be covered by insurance, and also notified the Iowa Board of Educational Examiners, which is the licensing Board for School Business officials.
“The District will pursue every means available to recover the loss via refunds, insurance, and/or the individual responsible for the loss,” Anderson said in the news release.
The audit is ongoing as the exact loss has not been yet known.
“We know that during this two-year period the clerk found ways to adjust the payroll numbers for quarterly and year-end reports,” the report says. “This allowed the clerk to not pay some of the withholdings created by the extra checks that were written. That is why the exact amount of the loss is not known yet.”
The investigation began after the District was notified on Aug. 4, 2017 by one of its contractors that there were discrepancies within the District’s payroll accounting system, which resulted in Lantz being placed on administrative leave with pay, as a standard operating procedure.
Lantz would later resign from her position and her resignation was accepted by the School Board on Aug. 10.