“They (residents) told us, ‘You’re making a mistake,’” Grandview Superintendent Matt Zoph said at a July 18 special school board meeting that was called to answer questions from employees and residents.
“She was trusted and respected both at the district and in the community. The (school) board had no reason to think she would steal from our children,” he said.
Huskey was a member of Grandview’s first high school graduating class in 1984 and worked for the school district for two decades before financial improprieties came to light, culminating in a forensic audit, an FBI investigation and her guilty plea to a federal charge of mail fraud.
She faces up to five years in prison and will be required to make restitution. Sentencing in federal court is set for Oct. 13.
About 150 people sat quietly in the GrandviewMiddle School gymnasium for more than an hour, listening intently to school officials’ explanations about how the embezzlement was accomplished and why it took so long to detect. Attendees were invited to log questions on notecards at the door of the meeting and some questions had been collected in advance.
Scott Gowan, a consultant for the district, read aloud the report from Daniel Jones and Associates, which conducted the forensic audit after Zoph first discovered irregularities in August 2016.
The report outlined years of financial manipulation in which Huskey paid herself about $550,000 in bogus salary and benefits for her job as district business manager and for other jobs she fabricated.
She reaped another approximately $720,000 from checks written directly to her, to vendors for her own purchases, or to pay off her debts, and more than $20,000 in personal purchases charged to the district’s credit card.
The report also showed how Huskey cashed payroll checks made out to fellow employees for duties they did not have, or in the case of direct deposit checks, routed checks to bank accounts belonging to Huskey or her family members.
In all, 57 of the district’s employees were affected, some of whom paid income tax on money they did not receive.
Huskey was hired by the district in 1996, working first as a secretary, then administrative assistant to the superintendent, and finally as district business manager in 2013.
How could she?
After the meeting, several people expressed their feelings of betrayal.
“We all knew her, trusted her. I’m totally shocked and hurt,” teacher Debbie Anderson said. “If she pled guilty to $1.6 million without batting an eye, how much was it really?”
Two high school students said they knew the students themselves were the real victims.
“It was shocking to hear all the information,” said student Noah Richardson, 16. “It’s hard. She was messing with our education. If she took $150,000 a year, that’s three teachers’ salaries.”
Student Katie Huskey, a distant relative of the former business manager, said the low salaries for teachers in the small rural district already put obstacles in the way of getting a good education for Grandview students.
“A lot of teachers don’t stick around. We’re constantly getting new teachers,” she said.
Questions
People questioned how Huskey, who had only a high school education, came to be the district’s business manager. They also wanted to know how the fraud was concealed for so long and why audits conducted by the district, performed annually for several years by Schowalter and Jabouri of St. Louis County, did not catch the financial irregularities.
Zoph said Huskey “was purposeful and put great effort into concealing the embezzlement.”
“She produced and maintained false bank statements, invoices, credit card statements and other documents,” he said. “She forged signatures on documents.”
Zoph said Huskey carefully limited who had access to the records and presented false information to him and the school board.
He said her rise to such a powerful position with the district did not happen overnight, but over the course of 20 years, and she was believed to have shown initiative and efficiency.
“A district our size has a limited number of staff members, so when someone shows initiative to take on more duties, it is typically considered a benefit to the district,” Zoph said.
The report from Daniel Jones said annual audits of school districts are not designed to detect fraud and do not examine the details of daily financial operations but look at overall financial statements and give opinions on procedures.
Auditors then do random samplings of financial details and staff members provide them with the information they request, Zoph said.
Sometimes they call ahead and “let (staff) know in advance what they will want to see,” he said.
Most of the information for the forensic audit came directly from the banks and credit card companies and was then compared to district financial records.
Check records were only available back to 2009 and credit card records were only available to 2010 and Zoph said the district does not know what an examination of prior years might have turned up.
However, Zoph said as far as the district knows, the investigation is over, and the FBI has determined that Huskey acted alone.
Financial fallout
The theft has “severely impacted” the district’s reserves, Zoph said.
The district has made a claim for $1,628,888 to its insurance company and the firm has made an initial $150,000 payment to the district, but the company is still processing the claim and there is no timeline for a settlement yet, Zoph said.
He said any money the district receives will go to replenish reserves.
“Everyone knows we’re not a wealthy district. I wish I could say the money would be used for something wonderful,” (but it will go to replenish reserves,) he said.
The district’s budget for the 2016-2017 school year was $7,980,832.40.
Policies, practices
Zoph also outlined changes in policies and practices to protect the district’s finances.
Multiple financial roles that Huskey filled with the district – such as accounts payable, payroll coordinator, human resources specialist and Board of Education secretary and treasurer – will be split up and distributed to different people.
The district is planning to hire a “highly qualified” director of finance and operations, he said.
Procedures for payroll will include several steps provided by various people and checks will be distributed only with the handwritten signature of both the superintendent and Board of Education president. Numerous financial documents uncovered in the forensic audit had only stamped signatures.
Expenditures for various departments will have to be approved at several levels.
Details of those policies and procedures are available on the district’s website.
The district also plans to meet with officials from the State Auditor’s Office to hone internal procedures.
Response
The meeting did not allow public comment and some people said they would have liked that opportunity. But many said they were satisfied with the information they received.
Parent Amie Merz said she was pleased with how quickly the district’s finances were investigated after the discrepancies were found.
“I’m impressed by how quickly they took care of it,” she said. “It does hurt when someone stabs you in the back, but when it was discovered, they acted swiftly and professionally and deeply to take care of it. We can move on,” she said.
Zoph said Huskey’s crime deceived many in the Grandview community.
“I had people come to my office and advocate for her up until the day before she pled guilty. Most people were on Angie’s side,” he said.