DETROIT (WXYZ) - An audit conducted of Detroit Public Schools has found major problems in the system.
WATCH VAL CLARK'S REPORT IN THE VIDEO PLAYER ON THE RIGHTDetroit Public Schools Emergency Financial Manager Robert Bobb announced the results at a morning press conference. He says that of Detroit's 194 schools, only 5 had their books in order. Various problems were found at 189 others, with 59% falling outside the lower risk category.
Among the problems found were poor record keeping, lack of documentation, missing cash receipts, improper and unauthorized disbursements, missing checks and untimely deposits.
The audit found instances of loans made to school officials using school funds, missing funds from school sponsored activities, school funds diverted to personal accounts, principals writing and signing checks, cases where money from school activities was taken home before being deposited, financial records removed from school property and misappropriation of cash.
Five cases involving missing money, school funds being diverted to personal accounts and misappropriation of funds have already been turned over to the DPS Inspector General. They may eventually be turned over to the Wayne County Prosecutor's office. Three of the cases involve high school, two involve elementary schools.
The audit traced the problems to some schools not having been audited in more than 6 years and a lack of training on the cash management section of the District's School Administrative Financial Manual.
The audit's findings are already leading the district to put additional controls into place.
Other corrective actions being taken include requiring school-based accountants and bookkeepers to report to the district's Chief Financial Officer, assigning an internal auditor to all major sporting events to certify cash receipts, standardizing and training officials responsible for cash management on accounting software packages, performing periodic audits of school activities and requiring annual training for all bookkeepers.
