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Shelby County Public Schools has turned over information to the Kentucky State Police and the Commonwealth Attorney’s office to investigate fraud and embezzlement of school district funds.
Shelby County Public Schools Superintendent James Neihof expressed his belief that investigators have gathered enough information to charge district Payroll Manager Benita Anglin, a 15-year employee with Shelby County Public Schools, with payroll fraud.
He declined to note the amount taken or the method used to cover up the transactions while the investigation continues.
“It’s pretty black and white,” he said.
But he did note that the money discovered missing so far has come from the substitute teacher budget, and no employee pay was affected. He also added that there is “no indication at this point” that Anglin had an accomplice or any help in the alleged theft.
On Monday, Neihof told The Sentinel-News that a message from the school’s bank, Commonwealth Bank & Trust, on April 2 alerted the district of a payroll direct deposit error, something Neihof noted as normally routine.
But with further investigation, a discrepancy was noted.
“On Thursday, April 3, our Director of Finance Mr. Greg Murphy contacted Mr. Brian Pelletier, a senior consultant of MUNIS, for assistance in running diagnostic reports in the state financial software – MUNIS,” Neihof read from a statement. “He [Pelletier] was extremely helpful. He and Mr. Murphy worked throughout Thursday, Friday and much of the weekend to review records. Together they uncovered evidence pointing to an elaborate scheme to manipulate the MUNIS software and hide theft.”
It is unclear how many of these notes had been sent to the district over Anglin’s term as payroll manager, but Neihof said with a payroll as large as the district’s it’s not unusual for the bank to have trouble with a few accounts.
“But those notes would have been sent to her,” he said.
By the next day, a Thursday, Neihof said he had alerted the Kentucky State Police and on Friday he reported the matter to Kentucky Department of Education.
Shortly after KSP Detective Jason Propes, with the West Drug Enforcement and Special Investigations Branch was assigned to the case.
“He [Propes] reviewed the evidence collected to that point and took over the investigation,” Neihof said. “We have continued to assist him since that date [April 10].”
Probes confirmed that his office was handling the investigation and said, “It’s been an active investigation for a couple of months and we are nearing the end.” But he declined to comment any further.
By April 10, Neihof said Anglin was suspended with pay, “as with any investigation.” But by April 28 she resigned.
Neihof said Anglin has been considered an “expert in MUNIS as it deals with payroll and school districts,” and noted that she had led statewide training on the subject.
She received much of that training in Shelby County – which was one of the first three school districts in the state to pilot the MUNIS program – where she started in 1999 as an account clerk. Anglin served in that capacity until 2001 when she was named Payroll Manager.
When reached by phone to comment on the accusations, Anglin declined to comment and hung up.
According to Neihof, the case has been handed over to Commonwealth Attorney Laura Donnell, who will present the findings to the Shelby County Grand Jury on June 18.
Donnell confirmed that her office is handling the case, but could offer no further details on the investigation.
Neihof expressed that the board plans to pursue full restitution, and if necessary proceed with a civil case following the criminal proceedings.
Moving forward, the district has requested a full audit from the Kentucky Auditor’s office. He said he felt a full audit was necessary in order to “move forward with confidence.”
Stephanie Hoelscher, a spokeswoman for the state auditor’s office, confirmed they have received the case information and are performing a preliminary investigation. However, Hoelscher expressed they are not prepared to offer any further information regarding the case at this time.
The case could come with landmark implications, as well.
Neihof said they are currently working with the KDE and MUNIS to uncover how an employee could manipulate software to hide information.
“We continue to work with KDE to understand exactly how an employee was able to bypass all the safeguards in MUNIS, our state’s financial software,” he said. “Tyler Technologies, the parent company of MUNIS, has expressed a commitment to review the case and may update MUNIS software as a result. Our partners at MUNIS and the KDE have been very helpful in identifying the well-hidden deception by running queries and reports that are not accessible to our local district staff.”
Neihof said they are taking the necessary steps prevent fraud in the future and they are also doing what they can to clear the financial issue before the next school year. He said they expect to “start the next year with a clean bill of fiscal health.”
Neihof said his office and the board are committed to transparency and released a message to employees Tuesday afternoon, informing them of the alleged fraud and insuring them that their pay had not been affected.
While no dollar amount or range of theft was provided, the fraud found in the substitute teacher pay budget could not have been large amounts.
Since the 2009-10 school year, that budget has ranged between $821,404 to $1.06 million, and encompasses approximately 1 percent of the total yearly school budget. At this time, no information is being released how many years the alleged fraud took place.
“The only entity stolen from is the district. The children of Shelby County need to be paid back,” he said.