Theft of $25,000 of School Activity Funds at New Beginnings Foundation Charter High School

Approximately $25,000 of school activity funds were never deposited into the New Beginnings Foundation Charter high school’s bank accounts, according to an audit report issued Monday by Legislative Auditor Daryl Purpera’s office.

The theft was found during an internal audit of the senior class school activity fund conducted by the charter school for the period July 31, 2013, to January 22, 2014. The school was unable to specifically identify who was responsible for the alleged theft, but two teachers at the school who were designated as co-sponsors of senior class activities were responsible for the collection of the activity funds. One of the teachers has since resigned, and one remains employed at the school but has no access to cash, the report released by the state auditor said.

“The Foundation has filed a theft claim with its insurance provider subsequent to notifying NOPD of the alleged misappropriation. Pending the completion of NOPD’s investigation and results thereof, if warranted, the Foundation will seek full restitution from any person or persons involved in the theft,” according to the report. The Foundation also notified the Legislative Auditor.

The audit found that there were poor controls regarding school activity funds that allowed the theft to occur and not be immediately detected, including: not issuing receipts serially, not inspecting receipt books periodically, not submitting all collections to the main office daily, and not posting cash transactions of school fund activities to a general ledger system. In general, “the Foundation’s School Activity Fund internal control procedures were not monitored and certain internal controls were not adhered to during the first four months of the school year.”

Foundation management noted in their response to the report that, after the audit, “all school based staff were provided an in-service to review the proper cash handling procedures. A training document was issued to all school staff with examples and forms required to support activity expenditures. Staff was required to sign a declaration document indicating their understanding of the policies and procedures. Monitoring of the School Activity Funds has been increased.”

NOPD’s investigation is on-going, and the Legislative Auditor sent a copy of the report to the District Attorney.