Former Grainger High School bookkeeper Valerie Combs, who resigned in February 2018 after more than six years on the job, allegedly used three schemes to steal at least $34,754 in from the school system, according to a Tennessee Comptroller of the Treasury investigation published.
The amount could be more than $7,000 higher.
State auditors allegedly confirmed Combs used a school bank card to buy $643 for goods including wine and a blender.
Auditors identified another $4,441 in expenses “consistent with personal rather than school purchases,” but investigators could not definitively determine Combs made the purchases, so the alleged misappropriations were not included in theft total.
As bookkeeper, Combs was responsible was responsible for receipting and recording and depositing all school collections. She also prepared and signed school checks, recorded the disbursements in school financial records and reviewed and reconciled the school bank statements.
The comptroller’s office concluded Grainger High School officials failed to adequately separate financial duties; ensure collections were deposited intact; failed to review statement and invoices prior to payment; and file to ensure all bills were paid on time.
School officials indicated they have corrected or intend to correct these deficiencies, according to the audit.
The comptroller’s office began its investigation after the school’s contract auditor reported numerous accounting irregularities.
A Grainger County grand jury on July 22 indicted Combs for theft over $10,000. The offense is diversion-eligible, but if found guilty, she almost certainly would be ordered to pay restitution.
Auditors identified 129 alleged illegal transactions Combs made between August 2015 and February 2018, according to the audit report.
One method Combs allegedly used to convert public funds to her private use was a check-swap scheme in which she exchanged unreceipted checks for school cash collections.
While the school accounting rules required that receipts be issued for all collections, that didn’t always happen with checks, “and she retained the cash for her personal benefit,” according to the investigative report.
In one instance, Combs received an authentic collection log for a school activity that was prepared by a teacher. Combs allegedly placed the authentic collection log in a container in her office with items to be shredded. Combs allegedly pocketed $626 from this school activity.
“(She exchanged) unreceipted checks in an equal amount, discarding the actual collection log, and creating a fictitious log to conceal the misappropriation,” the report states. “Since Combs was responsible for recording collections in the school’s accounting records, she was able to hide this fraudulent activity from school officials.”
Another alleged scheme was less sophisticated.
Combs, at times, would receipt checks for less than their actual amounts, and pocket the difference. She once received a $6,000 vendor-commission check that was payable to the school, but recorded that the amount was $5,000. She deposited the $6,000, but removed $1,000 in cash she had received from teachers for other activities.
The final alleged scheme state auditors identified involved fraudulently manipulating school cash collections.
She once received a $778.60 from a teacher, but recorded only $378.60 in school financial records and kept the $400 difference.
On another occasion, she did not alter the collection log, but allegedly receipted $700 less than she received, according to the audit report.
“There were several weaknesses within the school’s financial processes that allowed this theft to go undetected for several years,” said Comptroller Justin P. Wilson. “The former bookkeeper was largely responsible for nearly all the financial activities of the school, and school officials failed to ensure deposits were made intact or review charge card statements and invoices prior to payment.”