‘Didn’t make any attempt to hide it’
Posted on Thursday, August 7, 2008
URL: http://www.nwanews.com/bcdr/News/64496/
DECATUR — Tina Murray’s arrest on Aug. 1 shed some light on the Decatur School District’s seemingly sudden financial problems.
According to police reports, Murray is allegedly responsible for embezzling $ 41, 471 from the district. Murray allegedly issued herself 38 manually generated unauthorized and undocumented payroll checks, totaling $ 37, 652, and gave herself another $ 3, 819 in unauthorized pay raises from July 2006 through May 2008. The checks Murray is accused of making out to herself were not on regular pay dates and varied from $ 85 to more than $ 2, 500.
The problem came to light when a Decatur State Bank representative called the district May 23 and told secretary Terry Burden that the school’s general fund had a negative balance. At that time, district financial records showed there should have been around $ 2. 1 million in the general-fund account.
The discrepancy lead Burden to discover the unauthorized payroll checks made out to Murray.
According to then Decatur Superintendent Dave Smith, Murray was authorized to generate checks for payment, to use signature stamps required on the school-district checks and to hand-sign checks on the district’s money-market account at the Bank of Gravett.
Murray resigned May 29 after meeting with Smith and former school board president Michael Wilkins.
According to police reports, Murray apologized to Wilkins and said she didn’t expect to keep her job. Smith typed a resignation letter for Murray to sign, and she handed over her keys to the school and cleaned out her desk later that day.
Murray had been employed with the district since September 2005 and had four years of previous experience as a finance clerk at the Northwest Arkansas Regional Airport.
“ There is no criminal connection with (former superintendents ) Dave Smith or Mike Parish that’s been suspected or found, ” said officer Larry Fiedorowicz with the Decatur Police Department, who was responsible for conducting the investigation of Murray.
“ She didn’t make any attempt to hide it, ” Fiedorowicz said. “ I don’t know many forgers who forge checks and deposit them in their own account. ”
Murray was charged with forgery in the second degree, a class C felony; and theft of property, a class B felony. The Benton County Sheriff’s Office also had a misdemeanor warrant for Murray for violation of the Arkansas Hot Check Law for $ 200 or less.
The school is bonded against fraudulent activities and should be reimbursed for the $ 41, 000, Wilkins said. The school board did not address the issue while the board was still in power because the criminal investigation was not complete and the final figures were not known, he said. Now the Arkansas Department of Education will be responsible for making a claim with the bond company, Wilkins said.
A report from the Arkansas Department of Education gave a list of Decatur’s financial problems:
• Manual checks written but not recorded on district books for the past two years totaled about $ 2. 4 million.
• It appears bank accounts have not been reconciled since September 2005.
• The 941 Quarterly Tax Reports for the second quarter of 2007, which were due July 15, 2007, were not filed until June 2008.
• The 941 Quarterly Tax Reports for the first quarter of 2008, which were due April 15, 2008, were not filed until June 2008.
• FICA, Medicare and federal payroll taxes for the months of February, March, April and May 2008 were not paid to the IRS until June 2008.
• State taxes for April and May 2008 were not paid to the Department of Finance and Administration until June 2008.
• The amount of late fees, penalties and interest due to the IRS and other entities is unknown.
Wilkins said Murray was responsible for entering checks into the state APSCAN system, for reconciling bank accounts and for filing tax reports for the district. Smith was Murray’s direct supervisor, he said.
The school’s 2006 audit report, conducted in June 2007, warned about financial troubles. Under reportable findings, the audit report states: “ Errors were prevalent in accounting records. Specifically, discrepancies were disclosed in the following areas: revenues and receipts, bank reconciliations, expenditures, journal entries, capital assets and documentation. ”
The report also said the district did not have adequate staff to segregate accounting duties to sufficiently reduce the risks of fraud or error and properly safeguard the district’s assets.
Despite the negative findings, Smith called the audit report clean when he presented it to the school board in October 2007, according to a Decatur Herald newspaper story.
Smith told school board members the errors in accounting were minor and procedural and had been corrected. During an interview in June, Smith also said the audit results really had no meaning.
The school’s 2006 audit report and audit reports for past years can be viewed at the Arkansas Legislative Audit Web site, legaudit. state. ar. us. The state’s findings on the Decatur School District’s financial situation can be found on the Arkansas State Board of Education Web site, edboard. arkansas. gov, under the July 14 and the July 30 meeting agendas.