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 allegedly identified 270 checks that didn’t correspond with the Anaheim school’s financial records.
The vast majority of the checks were allegedly made out to the former finance clerk who oversaw the books while others were written to two of the clerk’s relatives.
“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 Atty.’s Office.
“… the District Attorney of Orange County has asked us to be of assistance by not sharing any additional information at this time,” Supt. Greg Plutko said in a statement to district employees and parents. “We promise that, when it is appropriate, we will share updates.”
TimesOC is not identifying the clerk, who is now retired, by name because they have not been arrested or charged.
The former finance clerk allegedly acted defensively when administrators first inquired about alleged irregularities.
“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 & Management Assistance Team wrote in a summation of the audit. “Because [they were] considered such an expert, any explanation [they] 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 allegedly discovered in June 2018, when Esperanza High School’s yearbook advisor 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 pointed out 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, according to the state auditors.
“Students are involved in knowing how much money they have and reviewing financial reports, but they are not and should not have to be financial experts; they must be able to trust those who account for their money,” the FCMAT study team wrote.
After more than two months of correspondence, the former clerk and an attorney met with state auditors in February at OCDE headquarters in Costa Mesa.
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 they were “ashamed,” that “this really isn’t me or who I am” and that their spouse was unaware of the allegedly misappropriated checks, according to the audit report.
Mike Fine, chief executive of 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 former finance’s clerk lectured and advised colleagues statewide on how to manage student council accounts.
“She was respected in her field,” Fine said. “Usually, people who are doing this don’t want to be out in the limelight.”
The school district has filed a claim with its insurance provider in hopes of reimbursing the high school for the missing funds.
Daniel Langhorne is a contributor to TimesOC. Follow him on Twitter @DanielLanghorne.