A recent accounts payable audit uncovered significant mismanagement of funds within the Pontiac, Michigan, school district, WXYZ-TV reports.
Financial analyst and certified public accountant George Smith, who reviewed the AP audit report, called the findings "mind boggling."
The investigation covered four years of spending by Pontiac administrators and staff from 2006 through 2010.
Numerous instances of fund misappropriation were revealed, including more than $86 million in checks written to vendors or other recipients who may not have been owed them, and $13.6 million in checks written without the proper documentation or authorization. An additional $279,000 in questionable payroll checks was also uncovered, $33 million was found to have been spent by employees without approval, and a plethora of duplicate payments also occurred.
Although no proof of malfeasance was revealed, Smith believes there is "a very strong likelihood" that the district's lax financial controls were taken advantage of, according to the news source.
Loose or nonexistent checks and balances can put organizations at a heightened risk of both embezzlement and good-faith mistakes. Division of duties, in conjunction with regular AP audits and recovery audits, can help mitigate misappropriation.