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Audit reveals improper credit card usage, 'off the book' account in department at Montgomery County schools

The school system's management stated that it plans to provide proper credit card usage, decreased credit card purchasing limits, and more going forward.

MONTGOMERY COUNTY, Md. — An audit released on Montgomery County Public Schools (MCPS) is highlighting several examples of financial mismanagement, particularly in the school district's procurement policies. The examples cited ranged from purchases that have been shipped to an employee's home to an 'off the books' account.

In September 2021, the school system's Procurement Department identified questionable purchases through its normal review of credit card activity. This led to an internal audit of a transportation management employee’s credit card activity. The report found that purchases were made by that employee for gift cards, furniture, and purchases shipped to their home.

After further investigation, an account maintained by a transportation vender outside the control the school system's financial department. The 'off the books' account was used to make payment to several MCPS employees and to buy goods and services. The account itself was funded with the amount due to MCPS for liquidated damages from the transportation vendor failing to deliver goods on time included in the original bus contract.

The internal audit was enough for MCPS to report the questionable activity to the Montgomery County Police Department. An internal investigation also continued as the school system hired accounting and advisory firm in December 2021 to conduct research on transactions and accounts from July 2016 to January 2022.

In February 2022, the firm issued a report which identified that approximately $1.2 million had been deposited in the account and that payments totaling around $649,000 were made either directly to MCPS employees or for purchases of goods and services on behalf of the school system between October 2017 to November 2021. As of Nov. 16, 2021, the account had a balance of $535,036. 

A review of credit card purchases between July 2016 to January 2022 totaled around $572,000 made by transportation department employees that were considered questionable.

Two transportation management employees were placed on administrative leave on Nov. 21, 2021 pending review. One of the employees was terminated in February and the other employee resigned in March.

According to the audit, MCPS is still reviewing further questionable credit card purchases identified by the firm. In addition, the school system's management stated that it plans to provide proper credit card usage, decreased credit card purchasing limits as necessary, and eliminated credit cards based on limited or no purchasing activity. 

Watch Next: Police coming back to Montgomery County schools, now known as community engagement officers

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