Gambling problem blamed in school embezzlement case

Wednesday, Nov. 20, 2002 | 11:03 a.m.

A middle school employee who developed a gambling problem stole thousands of dollars collected through student activities, Clark County School District officials said Tuesday.

The theft was one of three cases of fraud uncovered by an internal school district audit. The longtime district employee made full restitution and has been fired, officials said.

"It's a sad story," said Lyn Vinson, director of internal audit for the school district. "This is an employee who was very well thought of. When she found out we were investigating the missing money, she came forward and confessed."

The woman, who the district would not identify, was supposed to deposit the funds collected through student activities such as bake sales and car washes, Vinson said. Instead of going to the bank, the woman took the money home -- gambling with the cash but leaving the personal checks untouched.

"Apparently, she planned to put the cash right back as soon as she won Megabucks and then make the deposits like she was supposed to," Vinson said. "Obviously, it didn't work out that way."

In the other two cases, employees allegedly stole cash from the high schools where they worked. The district is pursuing criminal charges in both cases, Vinson said.

The three fraud cases came to light as part of the district's internal audit of 76 schools. An independent audit of the district's finances found nearly 98 percent of the 76 campuses had accounting problems.

There is no money unaccounted for and no evidence district funds were improperly spent, Vinson said. However, the independent audit does indicate that the district's own rules are not being followed, Vinson said.

"We know these procedures can be cumbersome, and that our administrators already have very full plates," Vinson said. "But we have to get people to realize that there's a reason for all the paper work."

To that end, the district intends to step up training and may impose stiffer sanctions for administrators who do not follow the rules. The district needs to become more stringent about enforcement, Walt Rulffes, deputy superintendent of operations.

"It's a deterrent when we take swift and decisive action," Rulffes said. "We need to show that we won't tolerate people ignoring accounting procedures any more than we'll tolerate fraud."

Last year, auditors criticized district employees for failing to follow proper procedure when using purchasing cards, which work like credit cards. The district followed the auditors' recommendation to revoke privileges for schools or employees that repeatedly lost cards, Vinson said.

In this year's audit report, the district was praised for improving controls around the use of purchasing cards, but problems were still found at 87 percent of the 76 schools. Additionally, 80 percent of the audited schools made mistakes with checks and disbursements and 75 percent failed to keep clear and complete receipts.

The auditors' findings were "no surprise," said Assemblyman Wendell Williams, D-Las Vegas, a frequent critic of the school district's spending habits.

"This audit was just 76 schools, a small slice of the pie," said Williams, who has called for an independent audit of the district's use of construction bond funds. "Imagine what we're going to find once we really start digging in."

Tuesday's report could hurt Clark County's chances of getting additional education funds when the legislature re-convenes in February, Williams said. The state's 17 school districts are expected to ask for $907 million in extra funding for educational programs statewide. "No one's going to vote to throw money at a runaway train," Williams said.

Williams also suggested the accounting problems are evidence against the controversial reorganization of the district into five regions. The reorganization, put in motion nearly two years ago by Superintendent Carlos Garcia, was intended to improve accountability and oversight. Williams said he believes the reorganization has made the district less responsive.

But Rulffes said he believed the district reorganization, now in its second year, has actually made it easier to track the finances of individual schools by dividing the responsibility among the five regional superintendents. As the district implements changes recommended by the latest audit, the regional superintendents will be "invaluable," Rulffes said.