State audit cites missing funds from Springville lunch accounts

A state audit has found $56,000 missing in student lunch accounts at the Springville school district.

In a report released today, State Auditor David Vaudt identified $48,636.11 as undeposited collections, and more than $6,550 in improper and unsupported disbursements.

The undeposited collections  include proceeds from cash sales in the cafeteria and amounts that should have been deposited to student lunch accounts. The report reviewed accounts from  June 1, 2005, through March 31, 2009.

Maajal Houdeshell, the distrcit's former food services director, was responsible for preparing the deposit reports. She resigned on Jan. 2, 2009, according to the audit. The district requested the state audit shortly after her departure.

The Linn County school district, northeast of Cedar Rapids, has about 440 students.

According to the report, some of the undeposited collections were initially recorded in the student accounts and later reversed. After a deposited report was prepared, which didn't include the reversed collections, the amounts were re-entered into student accounts.

The improper disbursements identified by the report include $5,292.94 in purchases from Martin Brothers, a family-owned food distributor, and $777.95 in purchases from Wal-Mart.

Each of the disbursements were personal, according to the report. They were either for small quantities not consistent with authorized district purchases or items not typically bought by the school,  such as Hershey Kisses, cake pans and holiday plates.

“I want to stress that none of the student account were affected,” Springville Superintendent Terry Rhinehart said Wednesday. “The students didn't lose any money. Only the district lost money.”

Rhinehart said the amount will be covered by insurance. He also said the district has tightened internal controls, based on the report's recommendations.

“Being a small district, it's sometimes harder to segregate duties,” Rhinehart said. “We probably had too many duties assigned to one person.”

Houdeshell could not  be reached for comment.

Copies of the report have been filed with the Linn County Sheriff's Office, the Division of Criminal Investigation, the Linn County Attorney's Office and the Attorney General's Office. No criminal charges have been filed in the matter, according to Iowa Courts Online.

Copy of state audit report:

SpringvilleCSDSpecial

Copy of school district's response:

Springville CSD Response to Auditor's Report