Auditor’s Special Investigation of Marshalltown School District Finds Financial Irregularities

MARSHALLTOWN, Iowa --  The Marshalltown Community School District says a new report from the State Auditor's Office confirms some disturbing findings the district had uncovered over the summer.  The special investigation was launched due to concerns school district officials identified with certain disbursements issued by former payroll specialist, Allison Meyer.

Dr. Theron Schutte, Superintendent of Schools for Marshalltown Community School District, blames the irregularities on incompetence.

"I think gross incompetence, gross negligence, and an unwillingness to be upfront about it when confronted with the concerns and situation," said Dr. Schutte.

Dr. Schutte also says the district didn't have the proper checks and balances in place to recognize the problem sooner than it did.

"I think first and foremost that, we had someone in a position for which they didn't have the knowledge and skills and training and disposition to perform that function at a high level," said Dr. Schutte. "And, I think secondly, we obviously didn't have the appropriate segregation of duties and oversight happening within our administrative team, within the financial office in order to head that off."

The special investigation of the school district is for the period of November 28, 2016 through June 15, 2018.

It identified more than $645,000 of improper disbursements and undeposited collections.

"Our new finance director and former business manager realized things weren't quite matching up or adding up," said Dr. Schutte. "And, so that led to looking further into things, which resulted primarily in finding that we had not been fulfilling our responsibilities, in terms of paying in a timely fashion, the payroll taxes."

The improper disbursements identified includes more than $616,000 of penalties and interest to the Internal Revenue Service, Iowa Workforce Development, Iowa Department of Revenue and IPERS.

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