Tuesday, August 20, 2013

Former North Canyon High School bookstore manager pleads guilty to embezzlement in Arizona

A former Paradise Valley Unified School District staff member has pleaded guilty to felony theft after an audit revealed she had taken nearly $73,000 from the school district.

An investigation by the Arizona Office of the Auditor General found that Beverly Hodges, a former North Canyon High School bookstore manager, embezzled $67,162 by taking cash from the bookstore cash register from July 2007 to November 2009.

Throughout the school years, Hodges would hide her thefts by rekeying transactions into the cash register, then generating new, false cash-register tapes she used to prepare daily records — more than 300 falsified public documents in all, the report said.

In addition, the report said Hodges over the years told bookstore staff to withhold $5,349 worth of cash receipts from the deposit, which she used to buy food and beverages for herself and the staff.

The North Canyon bookstore processes extracurricular tax-credit donations and handles transactions for fees for items such as parking permits, athletic programs, replacement student ID cards and tests.

During this period, the report found, Hodges deposited more than $77,500 into her personal bank account, using the cash to pay for personal car and home-equity loans, retail purchases, groceries and restaurant meals.

The report also cited a former North Canyon principal and unidentified district officials, saying they “failed to exercise an appropriate level of oversight of Ms. Hodges’ activities. ... Moreover, district administrators allowed the NCHS bookstore to use an
outmoded cash-register system without ensuring that cash-handling, record keeping and depositing duties were
appropriately separated and adequate controls were in place.”

Before Hodges’ criminal activity was suspected or discovered, all schools in the district except North Canyon had stopped using cash registers, district spokeswoman Marty Macurak said.

“The software for a new transaction system was in place (at North Canyon) but not operating properly, so Hodges continued to use the cash register,” Macurak said.

In April 2010, Paradise Valley school officials asked the auditor general to investigate Hodges’ activity. By then, the district had already begun overhauling the way it oversaw record-keeping at its school bookstores.

As part of the overhaul, the district installed an updated student-payment system across its schools, allowing the district to monitor bookstore activity online. School principals received more training in cash-handling procedures.

Two district-level employees now oversee reconciliation between school cash receipts and accounting documents, and school bookstore workers and administrators discuss internal audit findings annually, Macurak said.

“The superintendent and cabinet are reviewing the report today, will discuss it in depth in the coming weeks and will adopt improvements beyond those already implemented as warranted,” she said.

On Friday, Hodges pleaded guilty to one felony count related to theft. As part of the plea agreement with the Attorney General’s Office, Hodges agreed to pay $72,511 in restitution to the Paradise Valley district.

Hodges started working in Paradise Valley schools in October 1985 and held various positions within the district until she was hired to work as the North Canyon bookstore clerk in 2003. Two years later, she was promoted to bookstore manager.

Hodges officially retired from the district in January 2009, but she continued to work as the bookstore manager under a third-party contract until Nov. 20, 2009, according to the auditor general’s report.

The report is the second strike this year against a former North Canyon staff member by the Auditor General’s Office.

In March, investigators found that Brian Dyer, a former North Canyon athletic director and math teacher, embezzled $10,578 by depositing school-related cash and checks into his personal bank account from December 2008 to May 2010.

Dyer was indicted on five felony counts related to theft, misuse of public money and fraudulent schemes.

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