An affidavit lists hundreds of checks for thousands of dollars each from 2001 to 2006 used to pay credit cards. It shows the internal control risks in school districts that have separate fundraising charities.
Nobody was minding the store at the Weber School District Foundation (EIN 87-6164318 Form 990) in Ogden, Utah. The Deseret News (Ben Winslow) reports that Denise Aughney, a part-time secretary with the school district for over eleven years, admitted to taking over a million dollars from the foundation, which was used solely for fundraising and had no staff of its own. The newspaper also included a copy of the affidavit, which is worth seeing for the list of hundreds of checks—I counted eight in August of 2005 alone—that were diverted to pay credit card expenses and cash advances.
The foundation's Form 990 shows the organization with almost no expenses other than grants to the school district. The Deseret News article says that the foundation raises its funds primarily through a Christmas Tree Jubilee and a golf tournament. There is nothing in the Form 990 on line nine about special events, although the 2005 contributions on line one are listed as over five hundred thousand dollars. Of note is the listing of the trustees, twenty-two in all, including Robert Petersen, the business administrator for the school district, listed as Treasurer.
As sometimes happens with Form 990s, the trustee home addresses, telephone numbers (home, cell, and work) and email addresses are included in the listing—either they wanted an unusal degree of transparency or no one was aware that the Form 990 is published on the Internet.
Of course what sets this story apart from the usual charity embezzlement case is that this organization was part of a large school district operation, and one might have expected a greater degree of internal control. I can speculate that the reason this could happen is that the school district auditors might have missed the organization entirely, since it is a separate business entity with no staff. The lesson here would be for quasi-govenmental organizations like school districts to have a handle on their ancillary charity operations, at the very least to be aware of what checking accounts they have and who is responsible for them.
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