Can districts avoid financial misdeeds?

The State Board of Education on Thursday questioned whether its financial safeguards are tight enough to prevent financial misdeeds like those that two former Davis School District employees are charged with carrying out.

The board is expected to hear from experts including university professors in future discussions about its safety nets.

"This is a serious issue," board member Randall Mackey said in a finance committee meeting. "This (allegedly had) been going on a number of years, and the system did not detect this. So what we need to do is ensure we design a system that will detect these type of things. If not, I predict this could happen again, and the state is going to be embarrassed."

But there is some question as to whether any financial checks, no matter how solid, can be bulletproof.

"(If) you have collusion, when two or more people work together to commit a fraud, it will never be caught by an auditor," said Murray District business administrator Tim Leffel, vice president of the Utah Association of School Business Officials.

Former Davis District employees Susan and John Ross were indicted last month on 47 counts of mail fraud, money laundering, theft of government funds and copyright infringement. They were accused of defrauding the district of $4.3 million in federal Title I funds between 2000 and 2005.

Title I money is federal money intended to help children in low-income schools.

Susan Ross was Davis' Title I director. Her husband, John Ross, was working as the district's grant writer and had previously worked in the State Office of Education's Title I department.

Davis District leaders say they have instituted safeguards to alert them to questionable activity, including more closely examining vendor orders.

Meanwhile, the state, which flows federal money to school districts, wants to make sure its safeguards are sufficient.

The state says there's no single person with all control over money flowing to districts. Auditors review documents — 350 in the past quarter, said Tom Upton, assistant controller at the State Office of Education. They also look for red flags, such as several small items being purchased from the same vendor in apparent violation of purchasing rules.