ANDERSON — The Indiana State Board of Accounts is asking a former food service department bookkeeper to repay more than $1.1 million to the taxpayers following a special audit of the Anderson Community School Corporation.
Carla Burke was hired by the Anderson Community School Corporation in 1998, and was named food service department bookkeeper in 2006.
She was responsible for maintaining the financial records for the school lunch fund extracurricular account (ECA) including reconciling the bank account, maintaining vendor invoices, preparing checks to vendors, as well as filing the department’s federal and state payroll withholding taxes.
During an audit of the school district, auditors with the State Board of Accounts found checks meant for vendors were issued and cashed by Burke.
As a result, SBOA began a special investigation.
Auditors found from 2014 to 2019, Burke cashed 312 checks from the school lunch fund extracurricular bank account totaling $976,773.
However, records incorrectly showed vendors cashed the checks, read the audit.
“All of the 312 checks were made payable to, endorsed, and cashed by Burke,” read the audit. “The Department's records, including the check registers and purchase authorizations for the 312 checks, indicated the payments were made to vendors, not Burke. Vendor invoices were not provided to support the payments made to Burke.”
Burke did not remit payroll withholding tax payments in a timely fashion to both the federal and state government, which resulted in $20,109 in penalties and interest, read the report.
The Indiana State Board of Accounts racked up $121,442 due to the special investigation.
Burke also submitted 11 extracurricular mileage claims for reimbursement, however, did not use the prescribed mileage claim forms, read the audit.
The audit also criticized the school corporation for a lack of segregation of duties over the school lunch fund extracurricular account.
“Bank statements and canceled checks were not reviewed, so school corporation officials were not aware that cancelled checks or check images were not being provided by the bank,” read the audit.
Auditors outlined additional gaps including the software used by Burke allowed transactions to be changed at any time, including after audit.
“The failure to establish these internal controls enabled misstatements or irregularities to go undetected,” read the audit.
Burke retired in 2019, according to the audit.
The State Board of Accounts says Burke needs to pay $1,118,325.26 back to the taxpayers for unauthorized transactions, penalties and interest as well as special investigation costs.
No criminal charges have been filed, records show.
SBOA forwarded the report to the Office of the Indiana Attorney General, the local prosecuting attorney, the U.S. Attorney, Federal Bureau of Investigations, and the Internal Revenue Service.
“At the moment the theft was first uncovered, we immediately reported this to the proper authorities and took corrective action,” read a statement from the Anderson Community School Corporation to SBOA on April 18. “This includes putting additional internal control measures in place and purchasing new financial software that will help prevent a situation like this from happening in the future.”
The district provided an additional statement to WRTV.
"Carla Burke, a former Food Service employee with the Anderson Community School Corporation (ACSC), orchestrated an elaborate scheme to steal money from the department's School Lunch Fund Extra-Curricular Account," read the statement. "At the moment the theft was first uncovered, we immediately reported this to the proper authorities and took corrective action. This includes putting additional internal control measures in place and purchasing new financial software that will help prevent a situation like this from happening in the future. While Ms. Burke's theft was significant, since it was done over several years, it did not cause any disruption in services to our students. ACSC takes theft of any kind very seriously. Which is why we will continue to fully cooperate with the Indiana State Board of Accounts (ISBA), the Federal Bureau of Investigations (FBI), and other authorities throughout this ongoing process."
WRTV is working to get in touch with Burke for a statement.
"The Office has received the Audit Report today," the Indiana Attorney General's Office said in a statement to WRTV. "We are reviewing it and will be pursuing the matter diligently to ensure the best recovery possible."