COOKS - Big Bay de Noc School is making efforts to move forward after discovering a former employee allegedly embezzled more than $800,000 from its finances.
The former employee, now deceased, was the district's business manager. Due to the former employee's death occurring before an arrest was made, officials are withholding the person's name.
During Monday's regular board meeting, Supt. John Peterson presented background on the case and expressed his concerns regarding the district's finances. He said the betrayal of the long-time employee has affected the entire school family.
Financial discrepancies were accidentally discovered in January while staff were looking for past invoices which, when found, appeared incorrect, explained Peterson in a telephone interview with the Daily Press Monday.
Peterson also released an official statement from the district on Monday. In conjunction with this, the Michigan State Police released a news release on the investigation to date. (See related story.)
In his statement, Peterson said, "On Jan. 12, 2010, the district's office staff discovered unauthorized checks written to the business manager. Upon further investigation, the amount of evidence associated with the business manager's improper behavior dramatically increased. The business manager was immediately relieved of her duties and privileges at the Big Bay de Noc School."
According to the district's statement, the "former business manager had embezzled over $100,000 of district funds per year for the past eight years... Unfortunately because of limitations on retrieving records, the full scope of the business manager's acts cannot be determined and may have started earlier..."
As the police investigation continued, further evidence of financial deception was uncovered in the district records, Peterson stated.
"The business manager manufactured invoices and altered cancelled checks to conceal her embezzlement scheme. Electronic financial records dating back to 2002 and bank records dating back to 2005 provided valuable documentation of the embezzlement," he explained.
Since the discovery of the misuse of district funds, school officials have been working with accounting staff from Delta-Schoolcraft Intermediate School District and Manistique Area Schools to get its finances back in order, Peterson said.
"What we have to do...we need to find out exactly where we are, reconcile all our accounts, see what bills have been paid and what bills have not been paid," he said, expecting this process to take about a month.
Peterson explained the district has yearly reviews conducted on its finances, including the 2008-09 audit which showed positive balances in all accounts.
"The Big Bay de Noc School District is making every effort to determine an accurate financial picture and is exploring options for realigning its financial duties including the possibility of sharing services with the ISD," he said. Peterson is meeting with ISD officials today to buy some time until a new business manager is hired.
"We have to look forward in a positive way...the only thing we can do is move forward. We're not going to recoup all the money," said Peterson. Only a small percentage of the funds lost will be recovered through the district's insurance coverage, he said.
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Jenny Lancour, (906) 786-2021, ext. 143, jlancour@dailypress.net