Shelley authorizes financial audit of its high school

SHELLEY — The Shelley School District’s board of trustees authorized an independent financial audit of Shelley High School after the discovery of financial records showing the school overspent more than $44,000 in 2018.

A 2018 district audit uncovered both the overspending and accounting manipulation at the high school, reports EastIdahoNews.com.

The high school account shows a shortage of $44,245.31, and an audit discovered that the school’s financial secretary manipulated the beginning balances of funds to match the bank statement balance, according to minutes from an October Shelley school board meeting.

Bryan Jolley

Authorization of a third-party audit is unusual because it opens the way for in-depth scrutiny of financial practices at a school within the district, Shelley’s outgoing superintendent Bryan Jolley told Idaho Education News Monday.

Routine district audits “don’t normally address buildings, other than a quick look,” Jolley said.

Jolley distinguished between the looming audit and a forensic audit, which typically evaluates financial information for use as evidence in court. Officials in the district floated the prospect of hiring a firm to conduct a forensic audit in the wake of the issue but balked at the price tag, Jolley said, which came in at between $30,000 and $40,000.

“That’s how much the school is in the hole,” Jolley said.

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Still, the third-party audit will comb financial records from the 2016-17 school year to December 2018. This will include examining “thousands” of transactions, Jolley said, and reviewing revenues, expenses and month-to-month account balances at the school.

Jolley expects the review to shed light on what fueled such rampant overspending.

The school secretary who manipulated balances at the high school has resigned. Last month, just days before the issue snagged local headlines, Shelley High School Principal Eric Lords unexpectedly resigned.

Jolley reaffirmed a past claim that Lords’ resignation was not a result of the overspending. However, he believes the audit will shed further light on what happened, and why.

“It’s a serious matter,” Jolley said.

Jolley said the district has yet to find a firm to conduct the audit, and it’s unclear when trustees and the public will be able to view the details. He also said the high school has transitioned to accounting software better equipped for high school financials. The high school has been using QuickBooks, Jolley said, which is “not set up to deal with” the array of transactions that happen at a high school.

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