Investigation of Marshalltown Schools Finds Financial Problems

MARSHALLTOWN, Iowa --  A new report from the State Auditor's Office confirms some unusual findings made by the Marshalltown Community School District last summer. The investigation began because of concerns school district officials identified with certain disbursements issued by former payroll specialist, Allison Meyer.

Dr. Theron Schutte, Superintendent of Schools in Marshalltown, 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 adds the district didn't have the proper checks and balances in place to identify the problems 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 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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