Nebraska auditor blasts Isanti school district for financial mismanagement

SANTEE, Neb. -- Nebraska State Auditor Mike Foley has issued a strongly worded letter to the Isanti Community School District Board of Education in Santee, Nebraska, following an examination of the district's finances from January 1, 2023, to February 29, 2024. The audit reveals significant financial mismanagement and potential misconduct.

Foley highlighted the district's high spending compared to the state average. Nebraska spends less than $16,000 annually per student, while Isanti Community School District spends over $50,000 per student, despite having access to "millions of federal, state, and local tax dollars." Foley stated the audit shows a severe lack of fiscal responsibility and a disregard for taxpayers' money.

The audit found the district had 14 credit cards with inadequate oversight, used for nearly 1,300 purchases during the 13-month review period. Auditors questioned over 530 transactions, totaling more than $102,000, including inappropriate expenses like restaurant gift cards, out-of-state travel and theme park tickets, golfing equipment, and personal items. Foley expressed his dismay, stating that district administrators and staff treated public funds irresponsibly, acting as if "every day is Christmas" with public funds.

Foley's letter suggests potential state law violations if district credit cards were used for personal gain. The audit findings will be sent to the Nebraska Accountability and Disclosure Commission for review.

Auditors also discovered the district reimbursed the former Superintendent and Business Administrator for Tatanka Golf Club memberships. The Superintendent's $850 reimbursement was claimed as "part of contract" despite no mention in employment documents. Foley criticized these undocumented perks.

The district also subsidized a senior class trip to Orlando after a Hawaii trip fell through. District credit card charges included tourist stops and a $286 payment to Ceci Nails Lounge, totaling $12,392.33 across 77 transactions.

Additional questionable expenses of $84,681.42 across 444 transactions included frequent food, convenience store, lodging, and department store purchases.

Foley's letter highlights several financial issues, including unnecessary sales tax payments on credit card transactions due to a disregarded credit card policy. This lack of oversight led to unaccounted credit card usage. Additionally, a $68,700 cash withdrawal from the General Fund in December 2022 remains unexplained. Other issues include a duplicate payment to Tatanka Golf Club and undocumented payments to a propane vendor for employee payroll deductions.

The district also faces high chronic absenteeism, more than double the statewide average. To address this, $146,000 was spent on student registration incentives, but proper documentation of payment distribution is lacking, and the legal authority for these incentives is questionable.

Foley concludes that simply providing more money to the troubled school district is not the solution and calls for community intervention to eliminate unacceptable past practices.

That District letter is available on the Nebraska Auditor of Public Accounts’ website at

https://auditors.nebraska.gov/.