- Associated Press - Saturday, October 11, 2014

MUNCIE, Ind. (AP) - Muncie schools risk losing federal money because of a decade of weak financial reporting and spending controls that also could lead to mismanagement of funds, financial experts say.

The most recent state audit of Muncie Community Schools found that some high school students were overcharged for textbook rentals because annual fees were treated as semester fees. It also noted that the school district lacked a system to vet vendors to ensure they haven’t been sanctioned by the federal government.

The audit also found discrepancies in per-pupil spending of Title 1 funds between the five schools with the lowest poverty rates and the five with the highest rates.

Other examples in audits dating to 2004 included a lack of management oversight of school lunch program claims or reports, overdrawn cash balances and under- or over-reporting of the actual number of honors diplomas, The Star Press reported (https://tspne.ws/1nXvuWT ).

“That many items in that many reports means there is probably not an adequate amount of board and administrative oversight in the process,” said Martin Birr, a certified public accountant and lecturer at Indiana University’s Kelley School of Business.

The audit reports found material weaknesses in internal controls, which puts the school corporation at high risk of being audited, Birr said. That, in turn, increases the level of scrutiny and the costs of routine financial examinations.

Mark Burkhart, the district’s former longtime chief financial officer, blamed the lack of internal controls on “excessive staff turnover,” the “school district’s need to reduce staff” and an inexperienced director of Title 1.

“The material weakness issue is if you only have one person doing everything,” Burkhart told The Star Press. “You can always find a need for more oversight - another person checking the numbers instead of just one person.”

Superintendent Tim Heller acknowledged that internal controls over financial reporting and federal spending “were a little loose.” He said there was no excuse for wrongdoing.

“No one’s ever come to me and said we don’t have the time or money or people to do the job,” he said.

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Information from: The Star Press, https://www.thestarpress.com

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