A former finance clerk is suspected of embezzling at least $859,000 in funds that belonged to Esperanza High School’s student council, according to a statement from the Placentia-Yorba Linda Unified School District.
State auditors identified 270 checks that didn’t correspond with the Anaheim school’s financial records. The vast majority of the checks were made out to the former finance clerk who oversaw the books, while others were written to two of the clerk’s relatives, the district said.
“Although only $859,000 can be confirmed, patterns suggest the alleged embezzlement may have amounted to more,” according to the district’s statement.
District officials said they launched a swift and aggressive internal investigation after Esperanza administrators informed them of possible irregularities related to the Associated Student Body’s bank account.
“The ASB funds in question were raised by students for various activities and organizations on campus and were kept completely separate from the district’s operational dollars,” according to the statement. “It is typical for ASB programs to have their own checking accounts that are monitored by finance clerks.”
No charges have been filed in the case, said Kimberly Edds, a spokeswoman for the Orange County district attorney’s office.
The district attorney’s office “has asked us to be of assistance by not sharing any additional information at this time,” district Supt. Greg Plutko said in a statement to employees and parents. “We promise that, when it is appropriate, we will share updates.”
The Times is not identifying the clerk, who is now retired, because the clerk has not been arrested or charged.
The former finance clerk acted defensively when administrators first inquired about irregularities, they said.
“Based on interviews, the former finance clerk was also viewed as strict, overbearing and not easily approachable when anyone questioned ASB transactions,” the state’s Fiscal Crisis and Management Assistance Team wrote in a summation of the audit. “Because [the clerk] considered such an expert, any explanation [the clerk] provided was seldom questioned.”
The FCMAT is a financial oversight body administered by the Kern County superintendent of schools that advises schools statewide of their financial and management responsibilities.
Financial irregularities were discovered in June 2018, when Esperanza High School’s yearbook adviser asked the school’s current finance clerk to pay a $5,000 expenditure. The finance clerk researched the yearbook’s transactions and found that it had lost money.
The yearbook advisor then showed paid invoices where his signature was forged.
District staff said they found 250 irregular checks and took their concerns to the Orange County Department of Education and the Anaheim Police Department.
In September 2018, the county superintendent of schools asked the FMCAT to conduct an audit.
Bank records of mismatched checks from 2005 to 2011 show the diverted funds total more than $1.5 million based on historical patterns, amounts and payee information, the state auditors said.
After more than two months of correspondence, the former clerk and an attorney met with state auditors in February.
FCMAT representatives explained their findings and showed the former finance clerk copies of the misdirected checks made out in their name, as well as those written to two relatives — one of them deceased.
During the interview, the former finance clerk said that they were “ashamed,” that “this really isn’t me or who I am” and that their spouse was unaware of the misappropriated checks, according to the audit report.
Mike Fine, chief executive of the FCMAT, called the case unusual, saying he typically doesn’t see such high amounts embezzled from ASB accounts.
Such student council accounts are prone to irregular activity because they handle expenditures for a large number of school events. That’s why they’re audited frequently by outside firms.
“Often there’s a lot of cash activity as opposed to what the district handles, which are wire transfers from the state and federal government,” Fine said.
There are typically multiple school officials who oversee ASB accounts, including student activity directors, principals and district finance managers.
The school district has filed a claim with its insurance provider in hopes of reimbursing the high school for the missing funds.
Langhorne writes for Times Community News.