missing money

Audit: $270K gone from Wagoner schools Child Nutrition Program source of problem, audit saysMore than $270,000 has been identified as missing from Wagoner Public Schools’ Child Nutrition Program from 2005 to 2009, according to a state audit.

State Auditor Steve Burrage released the audit Wednesday. He said in a media release the missing money is the result of a lack of oversight and giving too much authority to one employee.

Mary Gaylor, who worked for the district about 15 years and was child nutrition director and district treasurer until last year, took complete control over receiving and depositing lunch and breakfast funds, according to the audit.

The district had an average annual loss of about $67,000 while Gaylor was in charge, the audit states. The audit only covered four years because there were no records available for longer than that period.

The audit compared bank deposits with records from each of the district’s six nutrition sites and found they did not match in 43 of the 44 months reviewed, Burrage said.

Gaylor was suspended in April 2009 and the school board accepted her resignation last June.

The state audit came on the heels of an audit by the Oklahoma Department of Education that found discrepancies in the number of free and reduced price meals reported by the school district. Burrage said his staff believes Gaylor gathered all the documents from each of the district’s cafeterias every day. She then allegedly rewrote the deposit slips to make them match the funds she put in the bank. It is also believed she fraudulently inflated the number of free and reduced meals the district was serving to conceal the discrepancy.

“Breakfast, lunch and snack sales didn’t match deposits and fund balances couldn’t be reconciled in any of the records. Unfortunately, it appears no one knew the fund was short,” Burrage said in a media release.

Investigators were able to compare computer-generated daily sales reports prepared at each site to the actual bank deposits made by Gaylor in order to identify the fund balance discrepancies, Burrage said. “We documented annual losses ranging from more than $58,000 to almost $81,000 for the four years that records were available,” Burrage said. “We were unable to determine when the misappropriation may have begun because we could only go back to 2005, even though Gaylor had been there a lot longer than that.”

The report states the auditor was unable to determine how much of the missing $270,000 was in cash. However, bank records show that through August 2008 and April 2009, the amount of cash deposited totaled $3,800.68 After suspension in April 2009, there was more than $5,000 deposited in the remaining three weeks of that month and nearly $7,000 in cash was deposited the next month.

Charts prepared by the auditor’s office showed the variance in the amount of money collected at each cafeteria and the amount deposited ranged from $95.20 in June 2007 to as much as $17,000 in May 2006.

The report also states that Gaylor did not make daily deposits:

• In April 2006, money was collected on 18 separate days and two deposits were made: One on the 11th and one on the 25th.

• Site reports indicate $95.20 was collected in June 2007 and nothing in July. On July 3, 2007, $8,613.42 was deposited.

• Site reports show no money was collected in June 2008. On July 1 2008, $5,545.25 was deposited.

The discrepancies may have gone unnoticed because nutrition program funds were deposited and held in one account throughout the school year while all food service costs were paid from the district’s general fund. The funds in the child nutrition bank account were eventually transferred in one lump sum to the district’s general fund at the start of a new fiscal year. Any discrepancy in the fund balance may not have been as easily detectable once the money was added to the $18 million general fund account.

Burrage said the school district began corrective action on setting up internal controls even before the audit was completed. “I recommend every school district take a close look at cafeteria funds, activity funds and every other activity where cash is received to make sure every penny collected is deposited and accounted for,” he said.

The audit has been turned over to the District Attorney’s Office for possible prosecution.

DA Jerry Moore said his office assisted with the investigation and he has received a copy of it but has not made a decision as to whether charges will be filed.