In 2019, Spotsylvania County Schools lost over $600,000 to a phishing scam by making payment on a fraudulent invoice for artificial turf fields. This issue was covered extensively by the media at the time. Some of the money was recovered. However, taxpayers should be outraged at the lack of some basic financial controls that Superintendent Baker should have implemented.
As the Superintendent, Scott Baker is in charge of the entire school system. This includes ensuring that financial controls are in place to support a $300 million dollar budget. We believe clear financial controls would have prevented the fraudulent payment from occurring. Let’s walk thru these problems point by point.
- Where is the CFO? – To our surprise, Spotsylvania County Schools still lacks a Chief Financial Officer. The school division has a Finance Director. However, there is a big difference in the duties of a CFO and a Finance Director. A finance director is in essence the accountant and subordinate to the CFO.
- Where is the Internal Auditor? – To our surprise, there is still no internal auditor. Two years has passed since this $600000 plus payment was made. It is our understanding there has been resistance to hiring one.
- Policy DK – School Board Policy DK gives a rough idea on how invoice payments work. The policy references a CFO, but one does not exist. To summarize, one person reviews the invoices, the clerk of the school board signs off on the payment, and a third person handles disbursement of funds. Was this policy followed?
- Rigorous Protocols – For policy DK to work effectively, the administration needs to implement rigorous protocols. If there is a large amount of money involved, where is the paper trail? Why aren’t more people signing off on this prior to payment? To our knowledge, nothing has been put forth publicly to protect the taxpayer.
- Financial control 101 – It appears making this $600,000 plus payment was too easy. It is common knowledge for organizations that make large payments to verify account numbers and invoices directly with the vendor. Any bank has this disclaimer whenever you wire or transfer money.