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Independent review finds no fraud at Thomas Crossroads Elementary but flags control lapses
Summary
An agreed-upon-procedures review at Thomas Crossroads Elementary found no evidence of fraud but identified one deposit-timing exception and three purchase-order/process exceptions; the district paid about $16,000 for the review.
An independent agreed-upon-procedures review of Thomas Crossroads Elementary found no evidence that fraud occurred, but the reviewers identified several internal-control exceptions and recommended steps to strengthen school activity-account procedures, the Cahuilla County Board of Education heard Aug. 12.
The review, carried out by accounting firm Mauldin Jenkins at the district's request after a staff member raised concerns, covered school activity-account transactions from July 1, 2023, through Jan. 24, 2025. ‘‘We looked at bank reconciliations … and we found no exceptions,’’ Hope Pendergrass of Mauldin Jenkins told the board. ‘‘We noted one exception … related to timely deposits. Timely is determined to be when $1,000 is accumulated or within one week.’’
The review also examined cash disbursements and found three exceptions in which the invoice date preceded the purchase order date, indicating the purchase-order process may not have been followed. Pendergrass said the team did not investigate whether those instances were emergencies that justified the exception. ‘‘We did not investigate whether or not that was because it was an emergency situation,’’ she said.
District leadership framed the engagement as an agreed-upon-procedures engagement rather than a full financial statement audit to permit more targeted testing of procedures and compliance. Superintendent Dr. Horton said the district commissioned the work under Board policy DIE (fraud policy) to determine whether policies had been followed.
Board discussion noted the cost of the engagement. ‘‘Off the top of my head, I think it was just over $16,000 is what we paid to have this,’’ a board member said during the meeting, and Dr. Horton acknowledged that payment. The audit team reported no exceptions in the review of journal entries and noted that most manual adjustments were appropriate and had an initiator and approver.
The report’s findings do not allege criminal conduct; instead, they point to procedural weaknesses the board and administration can address through policy enforcement, training and tighter cash-handling timelines. District officials said they engaged the firm to provide an independent assessment and would follow up with corrective actions where needed.
The board did not take formal action on the presentation beyond receiving the report and asking staff to follow up on recommended corrective steps.
