Audit: $1.8 million moved through unauthorized Roosevelt activities accounts
A state investigation released Friday found two Roosevelt High School bank accounts with $1.8 million in deposits operating outside of the district's purview. One was opened by a former basketball coach, and the other was run by the school's activities department.
The Iowa state auditor found improper and undocumented spending that raised questions about whether donations, fundraising proceeds and player contributions were properly used.
Chris Cundiff, a former Roosevelt girls' basketball coach and Des Moines teacher, deposited more than $19,000 into a bank account he controlled, the report said. Cundiff then transferred some of the money into his personal bank account and purchased gifts for athletes and coaches, which are not allowed.
Cundiff resigned in June 2015, after the district's internal auditors began investigating. He could not be reached for comment Friday afternoon.
Des Moines contacted the state auditor's office after financial discrepancies were found. The state's investigation uncovered a second account that was improperly operated by the school's activities department.
The "Rider Club Fundraising" account was opened by a Booster Club, but run by Roosevelt's activities department, which is not allowed under district policy. It included payments to coaches that were not run through district payroll, and were not taxed or documented for tax purposes.
Between the two accounts, auditors found more than $643,000 of expenses unsupported by the proper paperwork or that were improperly spent.
"It is a reminder to anybody in a government entity, to make sure all proceeds have been deposited correctly, so that ... taxpayer money is handled appropriately," said State Auditor Mary Mosiman.
The investigation began after a parent raised questions about a basketball fundraiser during the 2014-15 school year. The parent contacted the district's internal auditor and shared images of checks that were deposited into an account not maintained by the district.
Around that time, Roosevelt staff began asking questions about girls' basketball expenses after it received three clothing invoices that totaled nearly $3,000. The expense had not been approved, and the money was not available in an official fundraising account maintained by the district.
The investigation into the Rough Riders Basketball account maintained by Cundiff, which included more than $19,600 in deposits from 2013 to 2015, found:
- More than $6,600 was moved from the Rough Riders Basketball account to Cundiff's personal bank account, and more than $2,000 was transferred from Cundiff's personal account back into the Rough Riders Basketball account. The audit found that "funds transferred were used for personal items."
- Purchases of gifts for athletes and coaches, including more than $200 for expenses related to coaches attending the College World Series.
- Cash withdrawals and ATM fees totaling nearly $900. Cundiff told auditors that he paid coaches in cash, but two coaches denied being paid. Other expenses could not be identified.
"Because Mr. Cundiff did not maintain records of amounts collected and deposited to the Rough Riders account, we are unable to determine if all collections were deposited," the report said.
Cundiff told the district auditor that he opened the Rough Riders account because the official account run by the school had a deficit balance. However, an activities document show that there was $750 in the account in 2007 when he became coach.
The second and larger account, known as Rider Club Fundraising, was operated by the Roosevelt activities department but operated outside of district supervision. It included more than $1.7 million in deposits from 2006 to 2016. The audit found:
- Payments to coaches and instructors totaling more than $325,000, which were not made using the district's payroll system, so taxes and withholdings were not deducted. The amounts were not included on district-prepared tax documents. In addition, coaches did not have contracts in place.
- Gifts and gift cards worth more than $4,700 were given to athletes, managers, coaches and volunteers. District policy does not allow coaches to receive cash or gift cards, and athletes are not allowed to receive cash, gift cards or gifts.
- Undocumented spending, including about $45,100 labeled "banquet," about $44,600 paid to clothing and uniform vendors, and about $103,800 described as payments to camps, clinics or sports tournaments. The lack of documentation makes it unclear if expenses were properly represented, or how they were used, the audit said.
The auditor's report was forwarded to the Polk County Attorney, the Attorney General and the Division of Criminal Investigation, which will review and decide whether criminal charges are warranted.
The state auditor's office recommended the district take steps to provide better oversight and financial controls, including having employees follow proper protocols, such as using numbered receipts for fundraisers, which allows bookkeepers to reconcile receipts.
Des Moines Public Schools officials said they take multiple steps to ensure proper financial oversight. New efforts were also added, such as the business office and internal auditors taking a proactive approach to communicating with boosters clubs and bookkeepers, to field questions and concerns.
In addition, the district has stepped up its training of coaches and activities employees, and put out financial guidelines that are more easily understood by those without an accounting background.