Local News

Auditors Issue Recommendations For Wake Schools

Posted March 7, 2006

— The threat of sticky fingers is the fight from within facing the Wake County School District. The weakness was brought to light during the transportation fraud scandal. Now the school system plans to plug the loopholes.

The transportation fraud scheme cost taxpayers nearly $4 millions and it cost the Wake County School District its credibility. Now, after a three-month examination of the school district's operations, hired accountants from Alabama are showing school board members how to win back the public's trust.

"It's difficult to fight fraud," said accountant Kelly Todd. "It gets lost in the data."

The accountants said that cutting through the mathematical minutiae is as easy as buying the right software that follows the money and essentially sounds the alarm when the numbers don't crunch. Also suggested -- beefing up the school system's audit staff, which currently only three people. Similarly sized districts have twice as many.

Also, the accountants said surprise audits keeps employees on their toes. They also suggested establishing a perception of detection -- in other words, a culture of respect that stealing will be caught.

In the case of the transportation scandal, the inspiration for the audit reforms, the accountants said that tighter fraud controls would have raised the red flags. And there were plenty, including a one-year period when payments made to co-conspirator Barnes Motor and Parts ballooned to more than $3.7 million.

The accountancy firm also recommends establishing a 24-hour fraud hotline that employees can anonymously call to report suspected theft. Around 60 percent of the time, fraud is detected by tips or by accident. There's no price yet how much the recommendations will cost


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