David Jacobs/ The Center Square
Weak internal controls allowed cyber thieves to steal almost $1 million from the Caddo Parish School Board, though much of the money has been recovered, the Louisiana Legislative Auditor says in a report made public Monday.
The School Board also accidentally overpaid the IRS by more than $6 million, and was still waiting for the federal government to pay it all back.
In July 2018, a school board employee made an electronic bank transfer of about $988,000, with the intent that it would be deposited in an account for Magnolia Charter School. But someone claiming to represent the school provided fraudulent information via email about where to send the payment and the school never got the money.
The Caddo Parish Sheriff’s Office and the FBI investigated the theft. A total of $832,864 was recovered, counting $100,000 received from the insurance claim.
“Procedures have been implemented to prevent email scams or phishing schemes from occurring,” the LLA’s report says. “These procedures include placing a phone call to businesses notifying the School Board of a bank account change.”
Last February, the board’s payroll manager mistakenly overpaid payroll taxes by nearly $6.2 million. The IRS repaid $4,779,847 in June, but still had not refunded $1,408,579 at the time of the auditor’s report, which is dated Jan. 15. The sum could have been used in operations and earned a significant amount of interest, the LLA notes.
“New controls have been implemented by the School Board to prevent future payroll tax disbursement errors,” the report says. “All payroll related tax payments made by the Payroll Manager are verified and approved prior to submission by the Controller.”
In another report made public Monday, the Legislative Auditor provides an update on Jeanerette, which is currently being managed by a court-appointed fiscal administrator on the recommendation of the state’s Fiscal Review Committee.
The city has many “very past due” utility bills that, if collected, could help pay the utility expenses of the struggling city, the report says. Officials also failed to collect $277,162 in delinquent property taxes.
Jeanerette also is in violation of a loan agreement with the U.S. Department of Agriculture because it has failed to make deposits into two reserve accounts. Officials did not make the required monthly payments for “several years” and as of June 30, the city owed $31,468 to a “debt service reserve” fund and $33,632 to a “short-lived assets” fund, the report says.
The Legislative Auditor blames the city’s last administration for the mismanagement and reports the fiscal administrator has put procedures in place to ensure the payments are made on a monthly basis.