Hey. Hey. Hey. Dave Tally here. Leandre Camel. Alyssa Devon here. Michael Dixon. Mark Baster
here. Darina Bowererman here. Frank Barbie here. We have quum. Okay. Thank you. And we'll as we always do go around the room with introductions and we'll start with Gloria.
Gloria Branch, school board member. Stephanie Tara, auditor. Alex Sosa, auditor. Let's go. Go to the back. Second represents Emma. Okay.
Randy Laws, IG's office. Tracy Shear, IG's office. Dave Tally, audit committee. Theresa Michael, Inspector General. And Carrie High, Council Inspector General. Joyce Edison, Inspector General Office.
Christina Daniels, Inspector General's Office. Mark Bmaster, audit committee. Fred Mari, audit committee. Dorina Bowerman, audit committee. Central RSM Okay. Uh before we approve the agenda, I
want to recommend rearranging the agenda. And I'd like to take item 6.2, which is a review of Inlet Grove, and move that up to uh where 6.1 is for Lakew Worth. So, we'd have 6 point we'd
have Inlet Grove is 6.1 and uh Lakew Worth High is 6.2. And with that, I'd recommend approval of the revised agenda. Second. Second. Okay. Discussion. All in favor? All opposed? Pass unanimously. Take a minute
and review the minutes of the July 17th meeting. And after you've had a chance to do that, I'll accept a motion to approve. We have a motion. I'll make a motion to approve the minutes. Second. Discussion. All in favor? All oppose?
Pass unanimously. Heather, we went around the room with introductions, but I want you to go ahead and introduce yourself, please. Heather Frederick, chief financial officer. Great. Nice to have you with us. Okay, public comments. No public comments.
Hearing none, we'll go to item four, the inspector general update. Terry, I'm going to keep this pretty short because we have quite a few guests here and I don't want to take up too much of their time. Uh, basically, we have another policy that we're going to be doing today. Um, this is part of the
district's uh total view of reviewing all of the policies and updating them. Uh, Mr. Carrie High will be uh presenting that one when we come to his term. And other than that, um hopefully we will have the annual report u to
everybody either next audit committee or the committee after that. So you'll be able to take a look at what we've been able to do this past year. Um that there's no updates. Okay, we'll move on to item five, Terry. All right. During the July 2025 audit committee
meeting persuading to board policy 1.0 091.4D. The audit committee unanimously recommended that the current audit committee chair be permitted to extend his term for one year. On August 13, 2025, the school board unanimously approved this recommendation. Based on
the committee's prior recommendation to extend Mr. Tally's term for one year and the board subsequent approval, Mr. Tally is eligible for nomination and again to serve as chair. We will now follow the procedures for electing a chair and vice chair as promulgated under school board policy 1.03 03 B12 and used when
electing school board chair and vice chair. Chair and vice chair are selected by majority vote of the audit committee. At this time, I'll call for nominations for audit committee chair. Excuse me. Good morning. For the record, Mr. Dixon is here.
I I nominate Mr. Tally as the chair. Do we have a second? I'll second. All in favor? I I opposed. All right. Congratulations, Mr. Tally. Thank you very much.
All right. At this time, we call for um nominations for the vice chair. Do we have any nominations? If you want to nominate yourself, you can nominate yourself. I nominate Mr. by master vice chair.
Do we have a second? I could second that. All in favor? Opposed? What happens when you congratulations vice chair? Oh boy. Okay, at this time I'll pass the gavl. I
now literally have a gavvel. Somebody let me have one. So I'm going to pass this over to Mr. Dixon. I mean Mr. Tally. Okay, we'll move on then. We'll start out with a special review of Inlet Grove Community High School and the foundation
and I'll turn it over to Randy. Good morning and thank you, Mr. Mr. Daddy. Uh today I'm going to present the uh special review of the inner grove community high schools and uh its foundations review. Uh the primary okay
the reason for this uh uh review is that uh we received that several complaints anonymous complaints during the summer of 2023 and after we uh reviewed all the seven comp uh the complaints we categorized those you know issues into seven uh
categories like uh you know listed uh on the screen. The the primary objective of this review is to examine all the concerns outlined in the complaints and then to determine the adequacy of controls in the financial controls within both the
school and its foundation. The uh in the group community high schools it used to be a district operated uh uh schools before 2004. In 2004, it was converted to a charter schools and receiving of of course the
state monies to run the school and it also uh uh established the foundation to help raise funds uh to support the school's programs and students. are reviews also are based on those uh
seven categories of the uh complaints issue. The first one is about the potential abuse and misuse of the foundation money. We requested the uh financial records for 18 months period from January 2022
through June 2023. That is right at the you know at the time of the complaint we received it and our comparison of all the financial records from the bank and the credit card uh bank statements and compared it to their ledger records the accounting
records. We found that uh quite a lot of the records were not recorded in the accounting systems, including $46,000 in deposits and $173,000 in expenses that were not recorded in
the jail ledger. And then another uh additional deposits and expenses recorded in the jail ledgers did not have adequate supporting documentation to prove like the source of income, the purposes of the expenditure and so
forth. And here is a a summary of those uh expenditures that did not have adequate supporting documentations. uh all $173,000 not recorded in the GR after we review it. it didn't have adequate supporting
documentations and then another $40,000 even though they recorded in the GR but did not have a detailed uh resist to show like itemized the reset and what the expenses were and so forth and uh another $13,000
again not recorded in GL with scholarships paid to uh some eligible students but not recorded in the jail ledger. These are all related to the foundations. The next one is upon review all the uh
the records we identified uh $4,200 in deposits that were uh deposited into the school's CEO's personal bank account for scholarships. Uh during that time period there were 19 recipients of a
scholarship totaling uh $33,000 and then upon review of any supporting documents of those uh payments. We found that they did not maintain any of the active attendance records like uh class
schedules, transcript and so forth. So there's no proof to indicate that the recipients actually was attending postsecary schools. The third item is they were operating a a concession uh uh snack concession
sales during the day and but the school also receive uh USDA's uh lunch program uh funds. According to the USDA rules, they cannot sales uh sell any competing uh products during the school day. They
can only sales uh some of the products 30 minutes after the last bearing. And then uh after we started this review starting January 2024 when we went out to go back and do an onset observation, we didn't see any uh concession sales
anymore. So according to the uh CEO they have stopped it the selling of the concessions uh uh snack starting July of 2023. The second area is about the potential nepotism. The complaints identify the six
individuals that they were related to the CEO uh including uh her children, cousin and uh uh son-in-law. we look at their uh payroll records. There were a total of 80 employees in
fiscal year 2023. So the six uh employ uh uh identified uh individuals represent 7.5% of the total employments at the school and then their salary represent about uh close to 12% of the
total salary expenses of the schools incurred during FY23. uh the contract specific I mean the uh charter contract specifically said that and also the employment contract with the employees said that the CEO is not
supposed to directly supervise the employees these are six individuals but still they are related so uh to the uh uh uh CEO in addition to the payroll salaries we also identified uh another
$2,300 $100 of additional payment to one of the uh family members, but they were not processed through the payroll just uh through the you know uh uh regular uh checks cut through the uh the school under the operating account.
The the third category is about the use of the uh referendum money. Uh excuse me, the uh complaint uh mentioned about the uh not issuing uh teachers
retention supplements uh to the teachers. After we looked at the records, we found that the school did pay teachers retention supplements in fiscal year 2022 and 24, but there were no supplement payments in 23. So they
reinstated it in 24, but there was no payments in 23. But all the referendum monies after review it, they were in compliance with the uh referendum ballots, the allowable use. So even though the uh allowable use
include teachers retention supplements but it's not mandatory to use it. It's up to the school they decide but all the expenses we look at were eligible under the referendums are balanced. Conclusion number four
is about the uh potential theft of uh of money. We did find uh some of the u expense at the school had two credit cards issued to employees and uh when we look at it there were
$46,000 uh payments through the uh credit card issued that the former treasurer did not have any documentations uh maintained it to show what we purchased it and what were the expenses.
And then another about six $86,000 in credit expenses incurred by the current bookkeepers uh PE card were also without adequate supporting documentation to show the expenditures. And then for those credit card
expenditures about $9,000 of uh credit card expenditures were not recorded in the jail ledger or that we did not find any entries in their ledger. The fifth area is about the potential for falsification financial records.
We looked at all the records and then we did not find any uh apparent fortification records. But we did uh noticed that that when we received the first batch of records from the school especially at jail ledger there were a
number of uh you know transactions when we compared it to the bank statements and so forth when not recorded in the jail. We uh you know uh discussed it with the school. Subsequently, the school provide us with a revised jail ledger and then we compare it back to
there. Those uh the new revised ledger has some additional items in there but those that we identified were missing from the original one still were not in the revised ledger. But but overall when we look at all the records there were no
apparent or very uh apparent uh falsification of records just some of the records were provided to us late and some of the records were not there. Concern number six is about the uh board meetings minute were not uh posted on
the website and then when we go to the school website we did confirm that that uh those records were not available on the website but the school said that they did maintain the hard copies at the school site and will be available upon request.
The last area is about uh bullying and harassment of staff. This is uh another complaint that was you know had been uh filed with us uh previously and was investigated by our investigation units and then the conclusion was not substant
not substantiated. So there were no uh substantiated harassment identified during the investigation. In addition to the seven areas that we look at because we look at all the uh financial records at the school and uh
some other areas not mentioned in the complaints included uh some of the administrative staff they were incurring uh vacation times. they but they were not
allowed or not eligible to have uh do some times according to the employment contracts. Second, there was some uh payments of the uh vacation times, you know, cash out their vacation times uh about $12,000 to the
employees. And then another two employees that they incurred uh another 96 ineligible vacation times too. Uh the next is uh all our field work were completed back in early
January of 2024 and after we have internal discussion and then we made another decisions to uh refer it to this to the law enforcement and Mr. High will cover the rest of it. As the uh slide indicates, the um
inspector general's office is bound by a set of standards. We call it the green book. It's the principles governing the offices of inspector general. Whenever we have any uh reasonable indication, I like to call it a whiff of criminality. It becomes our obligation to refer that
to law enforcement. In this particular case, as you've seen, there was a lot of relatively, not even relatively, complex uh financial transactions that um we decided to refer directly to the office of the state attorney rather than
utilizing school police based in part on one of the recommendations that's in the green book. So on April 9th, the matter was uh referred directly to the office of state attorneys uh public corruption unit. the uh assistant state attorney who was working at the time received the
information um asked for supplemental information and um proceeded to do what the state attorneys do. Um around November uh when we called to to check in, excuse me, around June when we called to check in as to the status, we
were informed there had been a change in the prosecutor who was handling public corruption. the um the change in leadership resulted in in a transfer of of information and files and the new public corruption prosecutor who took over uh informed us on December 4th that
it would um be his recommendation to refer the matter to school police so that they could conduct a criminal investigation. Uh on June 4th, school police uh notified us that the allegations that um were presented and the evidence that they reviewed did not
rise to the level of criminal conduct. And then uh subsequently the state attorney uh informed the inspector general in writing that they were taking no action because the school police uh never provided a criminal complaint uh nor did they receive anything from any other law enforcement agency.
Okay. Questions, comments? I have a I have a couple I'd like to mention. I apologize again for coming in late. Um number one, um this is the first time I've heard about a foundation that's related to a school. I I've never heard
this before in like how many how many years? Um and a foundation is usually funded by a maybe a person indivi group of people. What is our responsibility with respect to investigating
this type of action in a foundation that's related to a school? How does the how do these entities come together with our school district and a private is I I guess this is a private foundation. I don't know what it is. It doesn't tell you what is it. What could that's to
start with. What I can tell you is based on what we've learned during this audit as it relates to this particular foundation, it is a notfor-profit entity. The foundation is right. Correct. That that is affiliated
and was established for the benefit of the Inlet Grove High School. It's noted in their charter documents that it it's there. It's part of the district's role as a sponsor to monitor that. Um, I think that's maybe something better
answered by um, Miss Frederick. Okay, wait wait wait wait wait for Heather. Excuse me. So, in the document of the foundation, it refers to supervision by the school district in the document. I'm just trying to in the charter actually it in fact it
refers to the inspector general having the ability to step in the foundation's document. In the charter document, correct? Well, in in the the charter schools charter got there. That's all. That's that's that would be the basis for the jurisdiction. Got it. I'm sorry, Heather. I would I would slightly, I guess,
disagree there. So, with foundations, Inlet Grove is a charter school. Charter schools are separate legal entities with their own boards, right? As a district and for district oversight and monitoring, it is extremely limited and restricted by Florida statute.
So, I I don't I would not say that our purview extends to the foundation. And I think that was, you know, I think some of the challenges that the inspector general ran into as well, at least from um from the financial perspective, we're responsible for the charter and ensuring
that the the charter school is complying with state statute. We are not allowed to go beyond state statute. There are very specific regulations and and our district has gone past the statute previously and we've been told, you know, at the state level that we need to to stay and and we're really truly
restricted to to whatever the the state guidelines are. One of the Thank you. This this is a charter conversion and in the charter school um that is sponsored by it states that the foundation is under. This one is different than the
rest of the other charter school applications that we've seen where the foundation is is separate and doesn't fall. But for this one, the charter school application and the charter school that has been approved puts it under the IG's office. What's a what's a
charter school conversion? What is that? I don't know. I'm asking. So, we have two uh conversion charter schools in in our county where they were originally district operated schools that were then converted to a charter school. And and in terms of
requirements, they are no different. You know, once they convert to uh a charter school, they are really they're they would fall under the the regulations of a charter school. If the the uh application or or contract is different and includes the foundation, you know,
it we would be required under whatever those the application documents are. But if there is conflict with state statute, state statute would rule over our contract. At least that's what we have found um based on on our district being
overruled many times at the state level. Yeah. I just want to make sure really clear on this because what we were operating under was the agreement that the district has with the charter school and and I just want to make sure that this this wasn't
something where the IG's office I'm not saying that you insinuated that went rogue but but to be very clear though in the charter agreement section 9D.2 two, it specifically states, "The sponsor's office of the inspector general shall have completed unrestricted access." Interesting.
Owned again to to all facilities and other assets owned, borrowed or used by the sponsor, the school, a foundation for the benefit of the school or its ESP management company. So, this was disclosed in the engagement letter. I and and I I was not implying that at all. I'm saying within my department,
correct? We are very restricted. The IG has has more authority than we do. had to be something going on here. Yes. Yeah. I did not I did not intend that in any way. Another question. Are these uh charter schools subject to our internal fund audits? Uh no. The charter schools are not part
of it. And why is that? Because you know like uh Miss Brad said they are outside now. They operate independently from the district itself. So they are separate from us and whether they maintain internal funds or not is up to them. It's up to them.
Yes. And also similar to what Mr. bar before now we're auditing them for some criminal allegations. Right. So, but we're inside, right? We are looking at their financial records. Right. Also, yes. And then to uh just give you another update. Yeah.
The foundation for that school, they have changed the name back in uh June of 2024. So, now it's no longer called in Growth High School's uh uh foundation. They change it to another name. And they also made some amendment to their articles
too. So and then the uh the other thing talks about how the conversion charter school is is uh like uh uh miss fed said is a district operated school before when they wants to convert to a charter school then they needs to meet certain
criteria set by the state law that uh how many% of faculties and then how many% of family uh parents agreed the conversion then they can start the process to convert Well, okay. Thank you.
If if I could just add that charter schools are required by state statute to have an annual audit each year by an external auditor. My department receives those annual audit reports each year. And so we monitor them. Um if there are any findings, we make sure that they
create a corrective action plan and we follow up on those findings. So every single charter school is required to have an annual external audit and it has to be submitted to the state. And was this school submitting that audit? Yes, they were. And it had no exceptions in it.
No material except interesting. Uh well, you you have to understand an audit of the school is is not conducted in a way to look for fraud. I understand that. I understand that. Just because there's an audit doesn't mean that there was nothing going on. Bookkeeping. I'm not talking about
fraud. I'm just bad bookkeeping. Yeah. But uh I have a question. the the the funding of the foundation, does does that come from outside sources or is that directly from the charter school? Foundation. I believe we have um representatives
from Inlet Grove if they would like to speak to the the funding for the foundation. You want us to sit up there? You're more than welcome. Please. Yes. It's not
funded by parents of the school. It comes from donations from various individuals, various other foundations that are not for profofit. That's how it works. May I inter interject here? First of
all, my name is Stuart Kaplan. This is Joe Sconzo. We are the attorneys that represent Inlet uh school, Inlet Grove. This is Emma Banks. And if none of you or some of you have never introduced been introduced to Emma Banks, she's been in education for over 50 years. She
literally is a legend in this county. And I just want to draw uh your attention to really what should be the focus notwithstanding this presentation. First and foremost, if you take a look at the track record of this school, at least last year, the year before, the
preceding year, all I underscore, all of the children graduated, whether they graduated or went into military service. That should be the first and foremost concern in this district, whether or not any of these children got cheated or
slided or deprived of what we all would expect when a child goes to a school. This is nothing more than an example of just bad bookkeeping. And what exactly? And I what I want to say and what I want to give the asurances of everybody in
this room is Miss Banks has now employed a full-time certified public accountant who is present on site in the building. So there is no longer this um inconsistent
just shoddy shuffling of paperwork. But what I don't want to be lost in this presentation, which quite frankly when you watch it or listen to it, it really potentially looks bad, right? Especially when you see that there was some ask or
request to the state attorney's office to take a look and see whether or not there was any criminal impropriety. And I personally take exception. Mr. Scono and I are both former FBI agents. And I will tell you, he and I who were born and raised in New York City, me being in
the Bronx, and Joe being in Staten Island, we didn't have someone like Emma Banks who literally literally has dedicated her life to education. And if anybody is concerned about the foundation, the reason why there is a
foundation that goes along with this charter school is for the obvious reason. Because when there is a shortfall and they don't have enough money, Miss Banks either goes into her own pocket or leans on this fund, this
foundation to make up that shortfall, for example. So kids when they come to school in the morning and they don't have a meal, they're provided a meal or clothing or books or computers. So, let's focus on what's really important
here because quite frankly, I think this audit really smells and stinks, especially with the fact that it was entertained by an anonymous complaint and it got such traction and such a waste of time of resources, manh hours,
and dollars. Let's put our attention to where it should be, whether or not our kids are getting what the education that we all bargain for with respect to living here in Palm Beach County. Emma Banks should be awarded and applauded for her dedication in this county, which
is a lifetime. I would challenge anybody in this room to point out another school in this county who has such an incredible track record for an accomplishment where these kids when they graduate actually graduate with an incredible education and go on to
college and then come back and some of them have come back now to teach. So, I just want to make sure that there's clarity in this record. Thank you. You have any other questions? I don't have any questions, but I respect what you just said
totally. The number one thing is children, education, graduation. That's what we're all here for. I think you have to respect where we're coming from here before you know I I understand like boom, I got it.
We as a committee here often get allegations about things the allegations maybe not came from as a developed maybe I don't know the deep how it started and how it festered. You said it festered and it became bigger
and I respect Emma. Thank you Emma for everything you've done. I don't I've never met you but it sounds like you're like a legend like it was just said. So thank you for what you've done for education. We as a committee, however, we get these things all the time and
we have to pursue our procedures to do what we're supposed to be doing. Um, the fact that it got criminal, I I I can't I can't defend that, but as an audit committee, the bookkeeping, you mentioned it, I
mentioned it, was horrible. Maybe maybe that's just the sign of the times. And it's for very fortunate that you've hired someone to pick up the pieces and move forward. So, um I can't I I don't
I'm not in a position to apologize for a criminal action that maybe shouldn't have gotten that far, but as far as a a financial recordkeeping thing, what we do, uh I don't I I don't have any input other than today's meeting and what I got here. So, I don't know any
background, but um I just I I can understand what you just said and I appreciate what you just said and thank you for your comments. I'm going to add something now with regard to certain elements. There's
elements related to scholarships. I understand what was done in an audit. However, certain factors were completely missed. The first part is we actually self-reported 31 different scholarships, not 19. So we
went above and beyond in our response and each and every one of those scholarships was identified to a specific student. There were checks written to a specific educational institution
with each child's name on it. So any allegation or any indication that there might be some impropriy to me and I did public corruption in Palm Beach County. To me that's sickening because I got it.
You cannot you cannot give a scholarship to a child. I do it with the sons of Italy. I'm the president and the the scholarship chairman. I send that money directly to the burser's office. They
disperse not to the child but to their own internal expenses. It doesn't go to the kid. Any indication that there's something wrong with those scholarships? And Miss Banks actually went to the
school and tried to get them to verify IDs and you the school raised and I spoke with Mr. High about this. There's privacy concerns. they will not release documentation to individuals whether it's the student
the uh administrator who's granting that there's a problem I mean and we we shouldn't be looking and focusing at that there's the nepotism issue if you guys saw our response it is clear these are qualified people
her son was involved with the initial formation of that school and has been working there from day one. In fact, you saw it on the charter. He is specifically kept out along with her daughter who was
a former Jupiter police officer. The girl is beyond reproach and she is earning a salary that's less than most of the other people doing her job. Lastly, the one thing that concerns me
the most is where the complaint emanated from, and I don't know what type of investigation was done into that person. However, without going too far, I know where it came from, and I can tell you
where it came from, that person had responsibility over a significant amount of those things that were on there. And that's pathetic that this woman has had to stand quote unquote under this guise where that person is more responsible for the money and the issues and the
expenses and the things especially the annual leave stuff. But I could leave it there. I mean that's where that's where it becomes sad here for her. If I may, I'd like to clarify a few things. Number one, the inspector general follows the association of
inspector general standards. And part of those standards are both by the association of inspector general as well as the commission for Florida law enforcement accreditation. When we see something that has an appearance that could be criminality, we
are bound to refer that and that is just factual. We also has holding the same standard that our public district schools are held to for the charter school. There's no difference. We don't treat any differently. We go and
approach it the same way. Now, we're not no one has said that there is not a a genuine uh desire for the school to educate. We've not said anything like that. This is an audit. It is a factual
audit. It's based on six anonymous complaints that were received. We take anonymous complaints because there is retaliation in the world. We do whistleblower complaints. So an anonymous complaint, we're required to look at those as well. This whole
process we have followed our policies and procedures and accreditation standards as required. I don't have the ability to say no, we're not going to do this because I think Dr. Banks is a wonderful person. I can I don't have the ability to say I'm going to go and do
this because um you know I don't like charter schools or I like charter schools or or whatever it is. We're bound by our standards and that's what we have followed. I'm going to have Miss Banks uh make a statement.
To your point though and where I think there's a little bit of a disagreement here is when I sit here as not only her council but because we're up on Zoom and this is open to the public someone who doesn't know Dr. banks or doesn't
understand the process when they listened to the presentation. That's one side of the story. And where I depart is that at no time during this presentation did he decide to
incorporate our responses or the evidence that completely exonerates those original accusations. And that's where I depart and say it's totally unfair. It totally smears
bismerches Dr. Emma Banks because the public doesn't have the benefit of our responses for our investigative findings and for what I now knows by way of example that a bookkeeper took checks
that should have been personally deposited into Dr. banks account and inadvertently picked up the wrong deposit slips and it went into the school account. When they realized that it went into the wrong account, they immediately took the money out and put it into Dr. Banks's account. Bad
paperwork, shoddy paperwork, but an honest mistake. But nowhere this morning do I hear any clarification or any any attempt to balance and level those accusations. We watched a PowerPoint
presentation which basically regurgitated the original allegations with no attempt whatsoever to say what we provided to the state or provided to this district to exonerate. not to try
to just fudge it, but completely exonerate Dr. Banks and more importantly Inlet Grove from any potential impropriety. I'm going to allow Dr. Banks to address you. Good morning.
My cons my concern is number one stating that I took money that was supposed to go to my teacher hero award when it was my own personal
money that I received from renter I have renter property it was a check made out to Emma Banks for rent and it stated for rent Then I had another check from where
I live from Ivy's Golf and Country Club reimbursing me back $750. Then there was $44.39 I think it was that I took from my child's piggy bank and I made deposit.
The bank provided me the checks and all and I told the auditor and generals that when they came out and I say I will provide the documentation which I did. So that told the amount of money and the dates that they say that I took money
that was geared for my teacher hero award but nobody never said anything about all the extra money. Yes, I go to flea market and I do everything I can to raise money to help our kids go to college. I was on a TV show. Money that
I had, I donated it to it. See, nobody talk about that. I will never take a penny from Inlay Grove. I've given Yes, I finance kids full year of college. I've done two. I do that.
I do everything I can to help children. The other thing that I dislike is you're saying I'm a criminal. I know the person that did this. He came and apologized to me and told me why he did it.
And that's, you know, that broke my heart because this man was part of like part of my family, but he was trying to help another person who the state said could not work there. and this person wanted to work there and wanted me to do something illegal by letting him work
there. So they came up with this scheme and he told me to this day now he said he would testify and say that he did it. But the bottom line is I feel like my character is a character assassination
towards me. Uh everything that I do I go through the district. If I feel like I've done something wrong, I will call and I say, "I think I did something. Can you help me on this?" As far as uh
referendum money, we pay everybody. We do everything that we supposed to do. As far as my kids working with me every year, I mean every year, we have an attorney for our school. We check with IG to make sure
that we are in compliance. I do not supervise them. Never have. My son helped me start uh in let go. He's worked for me all his life. I've
had numerous of businesses. So I'm not a child that a person who is looking trying to get money. I have money. I want you to know that. Okay? And I help children
and everything. As I said earlier, I do it for the kids. Yes. I go to the line, but I will not cross it. I check as far as the school store. I check with food service. They told me I could,
but yet it's still I'm blamed for it. And this I know you have a job to do just like I have a job, but I want to assure you I'm for the kids and I will never I've been in education for 60 years.
I worked for the State Department for 18 years in education. I had the highest position. I started a lot of things here in Palm Beach County. The film festival, I was the one who initiated that.
So that the mentors program in Palm Beach County School District, I'm the one who initiated that career education. I'm the one who wrote the guideline for it for the state department of education. The standards that we are using in the
school today, I'm the one who did that. I've got recognition from the governor, from the president, from everybody. But I don't do it for recognition. I do it for children, but I don't want my name
tarnished for something I didn't do. I'm taking the blame for something somebody else do. If I do, some I'mma tell you what I did. In my also my kids at school, I tell them when you graduate from high school,
you go to college, we give them all that apply a $1,000 and more. I said, 'When you graduate from college, if you don't have a job, if we have a job at our school,
I'm going to give you that job if you're qualified. I got rolled up for that. The same I didn't know it was a board member's daughter or stepdaughter, but the child graduated from my school.
And when I tell kids I'm going to do something, I do it. even if I have to come out of my own pocket. So, I don't I know you have a job to do and I have a job to do. And my job right now, as long as I'm living, I'm going to help the
children. Now, whether people like it or not, yes, I have employees don't like what I do. And everybody have employees that don't like what they do. But the bottom line, we're here for children. And that's what I'm all about. And I
just want all of you to understand I don't need a dime for men let go. Not a penny. See, I want you to understand that. And the other thing I want you to understand, I would never
go against policy and procedures. I started law school, but I didn't want to be a lawyer. I wanted to help people. And ever since I was 6 years old, I've always helped kids, help people, parent. So with that in mind, I just want y'all
to understand, please do not put in your mind that I have done something wrong because I have not. And the person that did it, I'm going to deal with them. The only thing I'll add, and this will
be the quickest thing that we've said so far, and it's very simple, there is now an internal accountant that has been put in place. They have had an external accountant from day one. There was an audit as Miss
Frederick uh pointed out at the same exact time period as this OIG investigation was going on that was selfinitiated by Dr. Banks. That audit did not find. Now, however that works,
I'm not an accountant. I never will be. Don't go there. Right. Exactly. But in any event, just for your sake, there's been a change of the personnel involved in bookkeeping, an inside accountant, an exterior accountant.
I'd like to say this, the last thing, please. Let me just say this from Ren's office, and I'm using your name. You had a person to come on the job on my job and harass me.
So, I want you I want that on the record. I have a question. Um, I want to ask I don't Yes. I'm sorry. I have a question. So, you mentioned that you hired a full-time accountant for the school. What about the foundation? Is
there a full-time accountant working for the or the same accountant working? There is no more foundation. Foundation is gone. Okay. It's gone. got rid of it. Okay. I'm doing the foundation with the community now. What does it do? Has nothing to do with the school. This
is outside of my job. Ju just for clarity. Yeah. When we got involved, we understood the blurriness or the potential optics. So, we have shut it down so that moving forward there's no blurriness, there's
no optics, there's no perception. Her foundation no longer has any connection with this chartered school. Her desire to continue to raise money, provide resources and funding is strictly
outside the school for the community. Okay. So, it's not connected to the school. That is correct. Okay. Further questions? And yes, one last question. So when we did the investigation, did we include
the funds going in and out of the foundation or no? Yes, that is in uh in conclusion number one. Okay. Okay. Further questions or comments? If not, is there a motion to approve
this audit? Motion to approve. Is there a second? Second. Is there discussion? All in favor of the motion signify by saying I. I opposed.
Passes 51. Thank you all for coming. Thank you. Okay. We'll now move on to uh what's been revised is item 6.2, which is Lakeworth High School's flea market program. Randy, you can start off and
then again we'll welcome Stephanie and Alex to the group and uh you'll do the presentation. So, Randy, yes. This audit uh will be presented by uh Mr. Tara and uh Mr. Sers.
Good morning. We're here to present the report of the Lakew Worth High School flea market audit. We performed the audit to determine number one whether the flea market revenues were properly accounted for, meaning the monies were collected
properly and deposited. Number two, if the operation of the flea market had adequate controls in place. And number three, compliance with the use and occupancy agreement between the Florida Department of Transportation and the school board, the consultant agreement,
and applicable schoolboard policies, including the district money collection procedure and guidelines. To provide you with a little background knowledge of the Lakew Worth High School flea market, it was established as a fundraiser back in 1987. The flea market
provides funding for scholarships and student programs at Lakeworth High School. It is managed by a consultant and operates every Saturday and Sunday on property leased from the state department of transportation located under Interstate 95 underpass near the
school. During the 5-year period from FY2020 to FY2024, a total of $39,749 was provided from the flea market for funding scholarships and student programs.
We concluded $40,224 and rental collections were unaccounted for. The consultant who managed the flea market used district classroom receipts to collect the rents. The classroom receipts are comprised of three copies.
White is issued to the payer. Yellow is submitted in conjunction with the money's collected report and daily collections to the school for deposit into the bank. In a pink copy of the receipt remains in the book for recordeping. When comparing the pink copies that
remained in the book to the yellow copies that were submitted for deposit along with the monies collected report during fiscal years 2022 through 2024, it resulted in $29,817 in rental revenue shortage. The shortage
included $40,224 in unaccounted for revenues and unexplained overage of $10,47. To further explain the $40,224 in unaccounted for revenue, the receipts indicated three $33,539
was collected, but no deposit records were found in the internal fund. Additionally, there was $6,685 cash shortage found in 47 deposits. Through our review, we identified $10,47
in unexplained overage where no records were available documenting the sources. An example, when OIG completed an unannounced cash count at the school on May 19th, 2025, it revealed cash discrepancies with the flea market
collections. A May 10th, 2025 collection that had an unexplained overage of $80. The collection had a total of $5,25 in cash and was supported by classroom receipts totaling $5,125.
Another collection from May 18th, 2025 had a cash shortage of $160. This collection was supported by 11 classroom receipts totaling $2,315. However, only $2,155
was recorded on the MCR and submitted for deposit. While inquiring about the reconciliation of collections with payments from the flea market, the current school treasurer informed OIG auditors and the investigative school police officer that
when processing flea market collections for deposit, she compared the monies submitted with the amount recorded on the MCR without reconciling it with the yellow copies of the classroom receipts. Also, according to the school police investigative report, the document
custodian stated that she did not verify all pink copies are present when the books are returned. The second conclusion of the audit revealed inconsistencies with the scope of work between FY2023 and FY2024's
consultant agreement. The FY2023 agreement required the consultant to maintain a record of transaction as well as collect rent with a police officer on duty. The agreement for 2024 did not include those provisions.
Although money collection procedures and required documentations were not listed in the agreement, the consultant generally followed the district's money collection procedures. Due to inconsistencies in the scope of the work, the following are examples of non-compliance.
The consultant retains $17,725 in rents collected for 11 to 65 days. District policy requires that money be dropped the same day as collection. The consultant was non-compliant with maintaining the daily vendor's check-in
sheets as required as part of the agreement. 22 of the 50 sample days reviewed were missing the vendor's check-in sheets. Now, my colleague, Mr. Sosa, will present the remaining conclusions.
Thank you and good morning everyone. So the rest of this is going to be more about the operational side of the flea market. And the first of those conclusions is there was an adequate lack of proof of insurance per our agreement with FDOT. The vendors who are
renting spaces should have insurance that states the school board and FDOT as additional insured. And the way that we check this is with the daily vendor signin sheets for every day that the flea market is operating. Vendors come in, they sign in, and they state how
much or vendor states how much they paid. So, we kind of have a sheet of that. And we tested seven days between April and May of 2025. And we indicated a total of 42 different vendors were operating those days. However, the school was only able to locate 31 uh
certificates of insurance for those vendors. And due to the lack of complete information on the daily vendor signin sheet, there was no records of full names. It was usually only a first or a last name basis. So, we cannot determine
who exactly has the insurance and who doesn't. There's no way to cross reference that. And as a continuation of that, there was 31 available certificates of insurance. None of those 31 certificates indicated the district, the board, nor the FDOT as
an additional insured party. 13 of those, they did not meet the requirements of the general liability, which should be 2 million. They had either 500,000 or 1 million. And two of those vendors did not have commercial
general liability insurance. in lie of that they had professional liability insurance under the minimum requirement. And then for our fourth conclusion, we did on-site observations on April 18th,
and we noticed two non-compliances with schoolboard policy 2.383, which is firearms and weapons that prohibit these items to be on school property or sponsored events of school property. And
the second is non-compliance with schoolboard policy 7.19, which is a tobaccof free environment. And to illustrate that, there's some pictures here of items being sold such as stun guns, pepper sprays, brass knuckles, pocket knives, and as well as other
multiple vendors doing machetes and pocket knives as well. And other vendors were selling tobacco related products and lighters. And I believe I'll be handing over Oh, sorry. To
continue that, the consultant agreement stated that for their safety, police officers should be present when they are collecting rent due to it being a very large cash based uh flea market. And
during our observation, we noticed the flea market was patrolling the market unaccompanied by the police officer and was collecting rent solely by himself. And I would like to refer these next
couple slides to Mr. High. Yet again, we um as mentioned before, unlike the review that we just discussed in the last presentation, because this was strictly an audit, um we were bound by rather than the green book, we were bound by the GAO auditing standards
known as the yellow book, as well as board policy to refer this matter to law enforcement. This was something that we deliberated with the the audit team and when I say we, I mean myself and the inspector general. We uh really felt the
need that because $33,000 uh plus was recorded in 152 classroom receipts. Um chances are this wasn't a one-off. It wasn't a mistake that was made a time or two. There were 152 instances where money was recorded as having been
collected that subsequently was not deposited. And I hope that's not being lost on everyone. Additionally, there was a cash shortage that was found in 47 deposits and that included the audit team looking at 971 classroom receipts
totaling $183,000. I know we like to use the term materiality. this feels pretty material and particularly because we have that strong whiff of of potential criminality here. Um the uh corresponding again the
difference the MCRS and deposits were only for 176,000 and some change. Um additionally part of the basis for our referral it involved the $10,000 in unexplained cash overage. And as far as red flags go, when you see these sort of
discrepancies, you see shortages and then overages. It also lends itself to potential criminality. Um there were 28 deposits that totaled 105,000 plus. Again, supported by numerous classroom receipts that totaled $95,34
and there was no available records documenting the source of that $10,000. Additionally, you all have seen the pictures and although this is not fraud or theft related, still part of our obligation and also quite striking was the fact that um uh metallic or brass
knuckles were being sold at this flea market. And um it also raised that's a seemingly a direct violation of Florida law. It also raised the question of whether or not these weapons were furnished to minors. And it it certainly would be something if a student of the
district were to buy a weapon on Sunday afternoon and then go to school on Monday and be forced um into a zero tolerance expulsion. So we referred this matter to school police um on April 28th. We met with the lieutenant and detective. Uh this meeting included both
director law uh supervisor Nicole Ing uh as well as the senior auditor who handled this and the auditors that are presenting today. Um, we provided reasons uh for this referral and and again we focused on the financial stuff but we also provided
those same photographs. And although it seems complex, the example that was given was we had a consultant who was essentially the equivalent of the person working at the cash register who repeatedly was turning in money or
sometimes not turning in money or holding in money that didn't match what the receipt said. It really was that easy. And so we provided those records. School police said they were um ready to take a look at it. Um additionally, we we gave the draft findings. We had all
of the receipt books uh present at that meeting or available. We showed examples. We had the money's collected reports, the same photographs as well as the contracts and other audit working papers. Um on May 22nd after looking at this the school police uh concluded that based on interviews review information
pro provided by the IG's office receipt books MCRS and sworn statement of the flea market consultant uh the detective was unable to establish probable cause for violation of Florida statute 817.034. We'll talk a little bit about that later, but that's basically the
organized uh scheming to defraud statute. and I will at this point pass it back to Mr. Sosa. Thank you. So to continue with conclusion number four, after our exit conference with uh Lakeworth School staff, we did a follow-up roughly a
month later on May 31st, 2025. And we noticed there was no more sales of prohibited items and the police officer was accompanying the consultant. So, we would like to commend the Lakew Worth staff for their swift correction.
And for our final conclusion was the filing of sales and taxes. There was eight of the 14 months during the period of July 2022 through August 2023 that the school did not timely file and pay their sales tax to the
department of revenue. These delayed ranged anywhere from 9 to 115 days and they have anywhere from the 1st to the 20th of the following month. But we did notice that post September 2023 through
March 24, they were timely filed. And as a continuation, there was an overpayment of roughly $5,726 in sales tax due to an incorrect calculation of how they calculated the sales tax.
And there was also an incomplete sales tax filing records for 14 of these payments totaling $10,16 during the period of FY2023. they were missing the form that is required to be submitted with that which is the sales and use tax form or DR15.
And then due to these incomplete records, we were unable to determine the following information for these 14 payments, which is when exactly were the reporting period for this sum of payments, the payment types, and whether some of this sum is undocumented during
FY2033 and if they were for underpayments of prior years or for penalties and fines for paying late. And then if there's any questions. Okay, questions. Mark,
since this is I'm just trying to get this clear since the at the school level the receipts weren't reconciled to to what was given to them. We really are unclear of where the money's missing.
Correct. To where it's either at the consultant level or at the school level. Is is that correct to state that it's unclear where the money's missing? Basically, when uh the auditors reveal and compare the PIN copy, the pink copy
is a file copy of all the classroom receipt issued it to the package that the consultants turn in to the bookkeepers for deposit and then uh the bookkeeper based on the total on the cover page is the MCR money collector
report attached with multiple uh classroom resets. What we found was like Mr. Han mentioned, 152 of the PIN copies that supposed to have been issued and collected money never reached the bank,
never went to the bookkeeper for deposit. That's the total that we found was missing. But we don't know if the cash was given and then not deposited or not given but a slip was given.
Correct. Based on the record, it appears that the bookkeeper deposit all the monies that the uh consultants turned it in because the total that he turned it in should have you know correctly recorded on the MCR
and the bookkeepers based on the MCR to deposit the money. We also compare the attached yellow copy of the classroom research total to the MCR. What we found it was there were only a few of them had sort solages meaning
that the yellow copy total was more than what he put on on the cover sheet and some of them with $10,000 more than what the yellow copies you know represent. So basically you know uh based on all the
evidence or the records we look at it appears that is the uh 152 uh classroom resist isue that those money will never reach the the school. That's one inference you could make. I'm watching. I don't think you can really
inference that. I mean, if there's no rec because it's not like you have a check, it's just this is a lot of cash and if you don't have like a scan of the cash with the receipt, you really have no clue where it went missing. Correct.
I mean that I wouldn't you you either because it wasn't there's not a reconciliation done that certified kind of reconciliation going you know before it goes to the bank. So I I think to me
it's just unclear where the money went missing and I I think that the answer the lack of clarity is shared by everyone. The detectives were unable to determine what happened to the money if the money ever existed even. But if if receipts are being issued, 152 of them,
right? Again, were they being issued in error? There were no voids. To my knowledge, I don't want to speak out of turn, but that was part of why we brought law enforcement to see if they could determine what happened to the money or again if the money even
existed. But um we don't know. Okay. Yeah. I don't want to really speak on behalf of the school principal. I think the principal is in uh virtual and then based on her response to our report it seems that the school is hiring another
staff I mean a pe a person to collect the money and then the bookkeeper will count the money together with the new person when the this new person turn in the money for deposit and if I could just add as well I mean my department is working now with the
school and we're working on opportunities to reduce the amount of cash collect elections and uh the principal is very open um to any suggestions and improvements that we have in order to reduce the amount of cash. So, we only have one operation
like this within the school district. So, we're looking at other flea markets and how they operate and especially ones that are nearby um so that we can set something the payment up online. We can review that in advance as and the director of risk and benefits is also
working with the school in terms of the insurance requirements so that the school and whoever is collecting that information understands what it needs to include to ensure that we're complying with the FDOT requirements. Um so you know we agree with all the improvements
that the principal is putting in place. Um, and it did just come down to I just think it's it's bad rep recordkeeping at the school level and they're implementing procedures in place that we're fully in support of, but we also want to reduce the amount of cash as
much as possible um at the flea market because that is really the only way um to to avoid what happened here. Mr. Chairman, just a good point of just quick information to build on on what Miss Frederick was saying. Um and I don't want to put words in the auditor's
mouths but the um vendors themselves actually as they were selling their wares they were utilizing cashless payments correct I don't know if I can ask the on-site auditors or yes
so so I I believe that you know definitely utilization of cashless is is certainly something that can happen. Can I ask a couple real quick questions real quick so I can catch up to this? Um, how long has this flea market been
going on? 87 did I say? Was that mid mid 80? In the mid 80s. Mid 80s. Okay. And what brought about this audit? Can I ask? This was uh uh part of our work plan. Pardon me. Part of our last year's work plan.
Oh, it was Yes, I missed it. It's not uh uh any complaint or anything. is in our plan. That's the basic because we we know that uh this uh program generate a lot of money especially cash. That's the reason why we going to take a do an audit of this.
That's great. That's great. Um and can I ask another question? Sales tax. Sales tax was who's respons who's responsible for the sales tax payments? I guess the vendor collects it. No, they're not paying their own sales tax.
What are we what are we filing sales tax? Who's filing sales tax returns? Understand? We are not talking about the uh sales of merchandise for that sales tax. We are talking about the rent collection similar to our leasing of a school property. I understand. Thank you.
It's the rent proportion. And is that a school district sales tax payment? No, it's the uh who's paying that? No, the vendors. The vendor the rent usually is $25 per day. So that $25 already included the sales tax in it
and they pay the school. If they pay the school and then the school will send the sale tax up to Tallahassee. So you guys are paying the sales tax. We are required to collect sales tax when we're selling items. Yeah. But I in the presentation somebody said sales tax returns weren't being
filed. Yes. Now where is that? At the school or at the school site? School site. It's a little bit confusing. If we are talking about the school facility leasing, they will send the sales tax up to the central office and uh
the the the school is technically the less in this case and the less is required to collect the sales tax from the lei and then revert it to the state. Correct. Okay. So, so the delinquency in filing sales tax or paying sales tax wasn't the
school's problem. It was our problem, the school district. Is that right? According to the uh department of revenues, those sales tax collected must be transmitted up there. I get that. But who actually has the responsibility? Is it the school? The school itself.
School. Am I missing something? Because it's the school collected the sales tax. I got it. I got it. Yes. And then they need to send it up. It's the school. Heather's office. It's the school failure. The school pays it. Yes. Oh, they have their own separate identity.
No. No, no, no. It's the school collected the fee and then they send it up to Tallahassee. Under what identification number we do have one at the as a district. Yes, it's the schools the school with. Okay. Basically, the school is like
representing the entire district. I didn't know we had individual schools with their own sales tax stuff. No, the school doesn't have its own. Right. Thank you. Sorry. That's all I have to ask. Just trying to catch up. Mr. Uh, a very quick question because there's so many discrepancies in in the
report going back and forth and if this is happening at this school, my concern is how many other schools this is happening at. And then there's so many discrepancies that I I would think that the bookkeeper knew of the discrepancies
as they were going because there's inconsistencies in the cash receipt, what's deposited, and so on. So, do we have any policies and procedures in place where the bookkeeper can not really report a concern because
it's not a concern just kind of report that there's discrepancies in the cash receipts and dispersements because this is has been going on for for a while and how it wasn't cut. Why the audit has to catch all these
discrepancies going on? This is the only flea market that we operate in the whole entire district. Okay. It is very unusual and most of the other collections are all through fundraisers with teachers and sponsors. This is in a
way it's been completely outside the normal process. Um a consultant was hired and it wasn't you know considered a the consultant wasn't considered a district. It's usually not considered a district staff when they're acting as a consultant. So I think there was some confusion there as to what rules they
actually have to follow. So this we have very strict procedures in place with all other operations that are going through u the teachers and sponsors with the district and there is a reconciliation with the drop safe log when the the
monies are are put in the drop safe by the actual um uh sponsor. Uh there's a reconciliation from the bookkeeper. There are two people that are counting the money when they take it out of the safe. There was a lot that didn't happen, okay, that that is outside of our normal
process. And I think I remember from last meeting, this was the high school where they kept most cash compared to the other high schools that were examined. This school stood out in terms of having most cash on hand and and a lot of the high schools do just because of the activity uh with the
the football and all of those type of gate receipts. Uh we do have a a program where we're expanding. We had a pilot program that we ran last year to expand the use of um cashless options through GoFan and we're expanding that this
year. Um so we're up to 55% of our collections are actually running through and through credit card uh versus cash. So each year our goal is to reduce the amount reduce the amount of cash. Mr. Barbie, go ahead. On the same subject, I got a
different question. Okay. The I I know that they're they're probably going to update the internal controls so so that these reconciliations are done. The the one item I'd like to add to see if if this is going to be done in the updated procedures is if the school is going to
independently verify the amount of vendors per day so that there there there are no because the the the consultant could revert the receipts and the right amount of cash but they might be able to skip
over vendors. So the so the school should independently verify the amount of vendors operating for that day. Should be an added procedure to to to the updated internal controls. Good point. Good point. Good point.
Frank, I'm concerned with the board's liability with respect to the insurance. Um, Heather, when you when when the district uh when a school leases rooms at a school, I know that they have to go through the process of showing the the
insurance has been collected. With all these different vendors, who's going to make sure that the liability of the district, the school board is is limited because that insurance is in place. And and if there's 43 vendors, that mean there's 43 insurance policies somebody has to look at. And you know, we're all
used to looking at insurance policies. It's hard to read through 45 pages to figure out what's what's covered and what's not. So, how are we going to make sure with all these different vendors that that insurance is in place? So, the consultant that is part of the process right now that was put in place by the principal. Um, so the consultant
is looking at that and I believe that there's also a school staff that's going to be assisting. Um, something that was requested by Mr. law is whether we could have a blanket policy because that is something that we had previously where the district could purchase a blanket insurance policy and then we could
increase the prices that we're charging to each of the vendors and we wouldn't have to worry about collecting for them. about three years ago, I believe the um the the insurance provider would no longer write that blanket policy. And so they put in a pla put in place the
option where vendors can still go through uh our provider for their own insurance. Um and so Mr. Law asked if if I could double check and make sure to see whether we had the ability to put a blanket policy back in place and we do not. It would be cost prohibitive for us
to do that. So, we do have one at the district level that the school is purchasing. Um, and that that policy alone is $8,000 just for the school to cover to make sure we're complying with the FDOT requirement as well to have the proper coverage. So, the district is
self-insured, but for this purpose, we are purchasing an an additional insurance policy that is running through the school and being funded through the revenue collections. and they are collecting now each of the the insurance documents and the director of risk and
benefits, Nancy Bolton, is going to work with the school so that they understand what to look at to make sure that each of the insurance documents has the proper insured amounts as well as the district being named. All right. Thank you. I have I have one last question. The
consultant, is it the same consultant from 1988? No, they've changed it, you uh several how long has the consultant been involved with your audit period that you've done? How long this one is uh you know for the all uh
four five years is the same consultants and uh you know if I remember correctly this consultant was you know used to be a full-time employee with the district after he retired he became a consultant for this. Any further questions,
comments? I'll accept a motion to approve this audit. Motion to approve. Second, discussion. All in favor? All opposed? Passes unanimously. 6.
Before we go on to the next item, uh I want to go back for a minute to the uh previous uh Inlet Grove Community High School audit and I want to make sure that let the records reflect that Mr. Dixon voted no on the audit approval.
Just want that in the records. Okay, we will move on then to uh the opposed amendment to board policy 2.61 carry. Hi All right, it's a marathon meeting. Um, as as we've talked about the past past couple meetings, certainly last one, um,
and I think one before that, we are currently in the process of the district-wide overhaul of all, um, policies, um, and the inspector general office has, I believe, five that we're responsible for. Today, we will be discussing the proposed amendments to
the fraud policy 2.61. As you can see on this slide, I very cleverly added in red line because I'm getting better at it the um and other fraudulent misconduct. What you'll see today through today's presentation is having um familiarized ourselves with
these policies and myself as an individual, there was a need for expansion because the examples of fraud that were utilized really made it difficult when trying to establish a case of fraud even though there had been clear uh deception that had taken place.
We'll go into more details later, but the uh solution to that was adding the definition of other fraudulent misconduct. So, here we go. Um the purpose section 2.611. Um the fraud policy basically is designed to prevent fraud, right?
Provide consequences for engaging in fraud and obviously heighten awareness districtwide of potential fraud. uh goes all the way from you'll see in a moment our volunteers who work at the school district all the way up to the highest level um officials working in
management. We want everyone to be aware that um there's a lot of different species of fraud and if if you're engaging in it, it's it's problematic. Um first and foremost, we added the term deceptive acts on line seven to to better clarify what exactly we as a
district consider to be fraud. Now, the new language states the board will not tolerate fraud or the concealment of fraud. That was original. This is the addition regardless of whether the fraudulent activity was completed. And the reason that we are proposing this is
because we've seen um a few cases that have been investigated. I want to give props to our investigations folks where a lot of times the subject of the investigations will say, "Well, hey, nothing ever happened. No money was lost. You know, we didn't really do anything wrong." and and well, no, you
know, you put together a scheme, you decided that you were either going to flip a supplement to somebody who didn't perform or somebody who wasn't eligible to receive it. And what we believe and what we're proposing the district adopt is that um it's almost a consideration
of the incohate crime of attempt or conspiracy when you're really engaging in in in the intent to commit the act. And if you uh if you don't go through with it, it really doesn't matter from our perspective as it relates to fraud prevention. So scope expansion, please
forgive the fonts. I couldn't get them to work. Um we've added for section 2.612 um all charter schools officers and employees, meaning again this policy will apply to them as well. As you saw today, um, pursuant to charter
agreements, we have the ability um to to audit and investigate certain charter schools who have agreed to it through through contract. What we're proposing is in this policy um charter schools officers and employees also be aware of and abide by the um the fraud
requirements understanding that if charter schools don't agree, they can't be bound to any specific policies that we create. Um, additionally, we also want to extend it to district volunteers. We've had more than one case, particularly re recently, where
folks who are affiliated with the district who may have the ability to utilize the district's uh name and and effectively take on the role of an agent for the district, they are out engaging in conduct that involves material misrepresentations. They are sometimes seemingly looking for
a a gain based on that reliance of the misrepresentation. So, we believe it should be expanded to district volunteers as well. Um, we've uh provided some clear definitions and as I mentioned at the very beginning, we've expanded some examples that that I think were lacking that will make our offic's
job a lot easier when it comes to uh detecting and deterring fraud. Uh, first and foremost, we updated well one definition that relates to this particular excuse me, the particular species of document fraud. And we've also um gotten away from the intent of
unlawfully depriving the district because that was really the only intent um that existed before. You had we had to be able to demonstrate that somebody um had the intent to unlawfully deprive the district. What we're now doing, as I mentioned before, is we are um adding
attempted fraud that that incohate offense. And we also would like the public to know that even if it doesn't result in an actual loss to the district, meaning even if that money isn't converted, even if that that item
of value isn't taken uh unlawfully, if you are still out there presenting facts to be true, knowing they are not true, and people are relying on it, we want to be able to say that that constitutes fraud in our definition. Um here's the
fraudulent misconduct. These are the new examples. Um there's six different types that we're proposing, right? Uh first and foremost, the one that does exist, I was a slide ahead a minute ago. It relates to that document um fraud. And before we just said document
falsification, but now we're specifying um letters, forms, contracts, or really any other records submitted by or on behalf of the district. uh directly I can tell you this arose out of an investigation where um during an audit in order to avoid an audit finding uh
district representatives went back and adjusted a contract, right? Um made it appear as though to the auditors the contract was in place when it really wasn't under our old definition or the existing definition. Now, did that actually result in a loss to the
district? No. But it certainly was a material misrepresentation that they intended the auditors to rely on when they submitted those documents. And ultimately during our investigation they admitted that that that type of misrepresentation was
was wrong. But um what we are specifying here is again whether it's a letter head, right? We've had a case where somebody has um submitted an appointment verification utilizing a district letter head and attaching the name of a director to verify employment. That
potentially may have impacted whoever was seeking the employment verification. But from our perspective, we don't want there to be a loophole that allows for um our our employees again or agents, contractors to be submitting that kind of information that's fraudulent in
nature. So here we go. So here are new examples creating. Excuse me. Can I can I interrupt? Sure. Your item number n under definitions. Correct. Is that the right do we want to use rig in our policy statement? Rig bids. Can
that be stated a different way? Rig what does that rig mean? Item delusion with contractor vendors to rig bids. I mean is that what we want in our policy state? Rig bids. Can't you say it a different way? We could, but that I believe is the
common parliament when you're dealing with with contractbased fraud, procurement. Is it legal? Is it legal rig? Bid rigging. No. Oh, no. Can someone argue the definition of what that means? Presumably, someone could argue anything. We'll look into it.
I I I would like to make that comment. That's okay. Yeah. No. Yeah, we definitely will, but that that was relying on I know what it means. Okay. But yeah, we we can we can take a look at that. Great bids. Mr. Bliss can help. Um, so creating false invoices, that was a specific example, right? Again, whether or not those invoices are ultimately processed
and whether or not somebody ultimately is enriched by that, we now we we no longer um want that to be a required element. Um, falsifying grant information, right? Using deceptive practices to obtain services or funding. Here we go. This is, I think, the one
that Mr. Dixon just referring to. Collusion with contractors to rig bids. We'll look for some different language if if if we can. um misusing district credentials. That kind of goes back to sort of the example that uh that I gave before where the letter was sent to verify employment. And then most
importantly, the attempting, right, the attempting the prohibited acts even without success because we've had more than more than one subject say, well, hey, nothing happened, you know, no harm, no foul. And and that's really not a good way to uh to to prevent and deter um fraud.
Additional updated language. This goes back to the policy statement and what we're proposing is utilization of the term fostering. Um because again that that implies we're going to continue to grow. We're going to continue to develop. We're going to continue to work
on new ways because hey the fraudsters they're normally two or three steps ahead of us. And so what we want is the policy to demonstrate that we as a district and we as the inspector general are committed to, you know, continuing, you know, not just establishing and maintaining, but we're also looking to
grow and develop an organizational culture in which fraud prevention detection is integral. Um other um key changes, we added the reference to unauthorized and deceptive acts. Again, this is getting back into, you know, sometimes you may have the power to do
something. We we see this a lot at at at um at the discretionary level and you can do it but if you're doing it for some purpose where you're misrepresenting something and you're doing it to mislead someone else that would constitute again unauthorized
um conduct. We've also clarified that um again we're focusing on whether or not harm actually results and that's located at 2.61 um lines 102 to 104. So, we're really focusing on on doing away with the notion that, you know, we don't have to
have somebody get hurt before we can say, "Hey, this is fraudulent." Um, here we go. The management responsibilities. These are are are really very much the same. Um, we've added some more specific definitions to help management
understand and and really just sort of better craft the sort of stuff they should be looking out for. And that again specifies a lot of the different examples I utilized. I won't read them to you, but we're really getting into the other deceptive or unethical practices. Just because something
doesn't violate the criminal law, just because it's not against the law doesn't mean we should be doing it. And it certainly from our perspective doesn't mean that we can't say it's a species of fraud. Um uh now we've incorporated CARES, the centralized reporting system that's been around now for I think coming up on three years. We've just
clarified and tightened up the language there indicating that uh rather than utilizing only the inspector general, you still can report to us, but we also have the centralized assessment system for people that want to report potential violations of this policy. Um and again,
the goal here was to provide a more detailed roadmap for management's role in prevention and reporting. you know, just really again let them know that we're um we want to help them understand um employee responsibilities and investigative authority. The um a lot of
these are existing, but I I I just kind of tightened them. What we're proposing here is we want to remind everyone you have to adhere to internal controls. That's what's really important. I think that we saw today without getting too much off topic was what may be called bad bookkeeping in in in the world of
fraud prevention. That's that's certainly either not adhering to internal controls or not having internal controls. And when you have controls, it reduces not only the the likelihood but also the appearance that there may be fraud. Um we also want people to continue reporting fraud. And we also
want that continued cooperation with the inspector general. And one of the things that's been in this policy that we um again just just reiterated was if you report something involving fraud letting management know that a lot of times at that point whether it comes through
CARES or directly to the IG please let the inspector general do what it's trained to do. The office will then either if we believe it's something that needs law enforcement or some other regulatory um investigation will go from that direct go in that direction. But we want to make sure that um again there's
no uh no desire to to remedy everything from soup to nuts. If you think you see it going on, report it and then let us let us investigate or or audit or review the revised policy um at at 192 through 224. This again it clarifies the
references to board policies that already exist. Our IG policy 1.092 and the whistleblower policy 3.28. What we've um what we've added in here also is the new proposed language under 1.092 involving conflict subjects
remembering that we even if we receive a report of suspected fraud that is um alleging a board member or the board at large or the the general counsel or the IG or someone from the IG's office, we can't investigate ourselves. We can't evate we can't investigate the folks that we report directly to. Um, so we've
put that conflict subject definition in there as well to to harmonize it with 1.092's proposed language. And we've um, again, we've reiterated because this has presented a problem historically um, as it relates to document-based fraud
investigations. When we request or when we say we need documents, we're supposed to have immediate access to those documents. In fraud a lot of times we worry about destruction of evidence you worry about shredding parties you know Allah Enron and WorldCom from a few
years ago so what we ask is again if a request comes through just you know remember that 1.092 the IG policy says you need to to turn those records over to us. We don't mean to harass anyone. Um I don't have a slide for it but the last two sections I believe were 2.618 and 2.619.
A lot of those amendments were really instead of reiterating what exists in 1.092 92 just making references to 1.092 or references to 3.28 just so the hopefully the policy will be a little bit shorter and a little bit cleaner. But that um concludes my presentation
and there are no flying monkeys this week. Okay, questions, comments? I have one comment on uh your item. I'm sorry to do this. 215 line 215 um where you're referencing all employees. Should
that also include consultants? I can see here. Chances are it should. Yes. And if it's not covered in the scope, um I don't know. I'm just commenting on line 15. That's all. Let me take a look. What we heard today.
Yeah, that that's correct. I don't know. Yes. To all employees. And I Yes, we should. I I believe that that's kind of why I said if you look at 1.0925F, 0925F that includes I believe consultants, contractors, folks who are I'm not a legal guy in privity of contract.
Thank you. You're welcome. Further comments? If not, I'll accept a motion to approve. I'll approve it. Motion. Second. Is that a second? Discussion. All in favor? I.
All oppose. Passes 6. Okay. The next item, investigations, was previously provided to you. Uh, I want to make mention of a birthday that's coming up next Friday. It's Joyce's birthday and it's Terry's birthday both on the same
day. So, happy birthday in advance. What a coinc. Uh, Stephanie and Alex, I want to thank you both for joining us and I think you did a great job this morning. So, we're glad to have you with us. Uh are is there any further uh business to come before the board?
Well, just one quick thing just uh remind you that you're in for another year, Mr. Tally, as our chair and you got a year of fun as the vice chair, Mr. Bmaster. Thank you for volunteering. My pleasure. Thank you. One quick consideration for the
committee is the date of the uh December 19th audit committee. that is after the board meeting on December 17th. Uh we will be bringing the audit forward and the audit committee uh we prefer to have the audit committee review the audit
prior to it going to the board. So if you could consider moving that meeting before that board meeting that would be appreciated. I was just informed by Miss Edison that's already been moved to December 12th. Okay, great. Thanks.
Okay. Any other comments? If not, I'll entertain a motion to adjurnn. Thank you. Second. Meeting adjourned. Thank you all.