Building strong foundations
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No Comments [ Add Comment ]By Amy K. Stewart
Standard-Examiner staff
Top of Utah school districts critique fundraising arms
An embezzlement investigation of Weber School Foundation's missing $900,000 in charitable funds has made other Top of Utah school foundations scrutinize their financial procedures.
"We need to take a hard look at ourselves, even though we are confident with our procedures," said Janis Vause, Ogden School Foundation executive director.
Vause said she made an immediate phone call to her foundation's external auditor on Jan. 17, the day she learned of Weber School Foundation's investigation.
"We believe the responsible action at this time is to conduct a critical review of our systems to identify and address any vulnerability," she said. "We would be irresponsible as an organization if we didn't take a closer look."
The Ogden foundation has formed a committee, within its board, to work with the external auditor.
The committee is assigned to "better understand fraudulent activities, evaluate current processes and procedures and implement any recommended improvements to safeguard our organization against the misuse of funds," Vause said.
Officials with Box Elder School Foundation, as well as the Davis School Foundation, are sitting up and taking notice since the Weber foundation embezzlement allegations surfaced.
Box Elder Superintendent Martell Menlove said he called his foundation's executive director and secretary upon hearing of Weber's situation.
"I said, 'Assure me, one more time, this type of thing couldn't happen to us,' " he said.
Since Weber's incident, Box Elder district has done a complete review of its receiving and distributing processes, said district business administrator Ron Frandsen, who is also the foundation's executive director.
"We have complete confidence in our procedures," he said.
He plans to ask for extra attention to the foundation funds during its independent annual audit in August.
Weber foundation board member Cheryl Ferrin says the embezzlement allegations are a wake-up call to everyone. Ferrin also sits on the district's school board.
"It's a call to do better," she said. "Now is a good time for everyone to have a heads-up."
In early January, Weber foundation formed a four-person executive committee made up of foundation board members to implement financial safeguards and seek restitution.
Vause says she hopes the Weber incident won't affect donations to other school foundations.
"This situation will likely cast a shadow on Weber district and its foundation and could result in a more critical eye on nonprofit organizations," she said.
Foundation officials in the Top of Utah said they have seen no evidence of anyone holding back donations and no one is asking for their money back.
"We certainly hope it doesn't have a chilling effect on donations," Frandsen said.
Davis School Foundation Executive Director Sheryl Allen said, "The allegations are disturbing. It's most unfortunate -- no question about that."
Morgan School District doesn't have a foundation.
Top of Utah foundations share a common goal of raising funds to supplement projects in the schools above and beyond what the school district can afford.
Weber, Ogden, Box Elder and Davis school foundations operate with similar structures.
Foundation operating costs are funded by the school district. Generally, the foundation executive director and a few other foundation staff members are also paid district employees. The foundation boards are run by volunteers from the community.
Foundation budgets tend to vary annually, depending on grants and donations, as well as interest earned from accounts.
Weber, Ogden, Davis and Box Elder foundations undergo an independent annual audit, as well as a monthly bank account reconciliation.
The main difference in financial safeguards among the foundations is check-signing authorization.
In Ogden foundation, two members of the board's leadership must sign each check. Those authorized to sign are the president, past president, vice president and secretary/treasurer. Board members, such as Vause, who are district staff aren't allowed to sign the checks.
In Davis and Box Elder, only district officials are allowed to sign checks to disburse foundation funds.
"No one in our foundation has the authority to write checks," Allen said. In Davis district, all foundation finances are handled by district accounting officials, she said.
In Weber foundation, there must be two signatures on any check from the foundation. Those authorized to sign the checks are the foundation board's president, vice president, treasurer (district business administrator), past president and foundation executive director (district employee).
Weber foundation's former secretary, Denise Aughney, is suspected of forging signatures on checks, putting duplicate entries in the foundation's check ledger and putting money into her personal account.
A criminal investigation began after Weber district officials in November discovered discrepancies in the foundation's financial records. The investigation is continuing, according to Weber County Sheriff's Office officials.
No charges have been filed.
The foundation has filed a civil suit against Aughney, and her assets have been frozen. Aughney's husband and parents are also named in the suit.
Aughney is scheduled to appear before Judge W. Brent West in 2nd District Court at 4 p.m. Wednesday in the civil suit. This will be her first court appearance since allegations surfaced.
Aughney was employed with Weber district for 11 years. She was working 30 hours a week at $14.94 per hour until she was fired Dec. 20.
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