At a special executive session of the board of trustees for Teton School District #401 on Friday, Dec. 28, 2018 in Driggs, board members discussed the status of the ongoing investigations into a fraudulent payment of $784,000, transferred to an account in error on Dec. 20. The money, intended for Headwaters Construction of Victor, came from funds that are part of the state-held school-bond account.

The district continues to cooperate with the FBI and with the district’s insurance carrier, Idaho Counties Risk Management Program, which is also investigating the case, according to Superintendent of Schools Monte Woolstenhulme. An internal investigation of the case is also ongoing.

The school bond projects are continuing and the district has been in close communication with Headwaters, the firm serving as Construction Manager/General Contractor for the school projects.

Additional security measures have been taken to safeguard the distribution of public funds entrusted to the district, according to board chair Chris Isaacson. These steps, including greater oversight by the board, will be applied to all financial transactions of the district, not just those related to the bond project.

“We are taking diligent steps as far as protocols and procedures go to make sure this kind of thing doesn’t happen again,” Isaacson said.

As a result of the incident, business manager Carl Church has been removed from that position, Woolstenhulme said. In the short-term, the district will bring in accounting professionals to assist the district in processing payments and handling financial affairs of the district. The firms that may be working with the district have not yet been identified.

Woolstenhulme also said the fraud case has been reported to the Idaho State Department of Education and the Idaho State Treasurer’s Office, where bond funding resides.

While details of an ongoing investigation cannot be released, as soon as the district has information that can be shared, the community will be informed, Isaacson said.

“We may not be able to talk much about it right now, but we will continue to operate with transparency during this challenging period,” she said.

The school board calling a special meeting over Christmas break is unusual, Woolstenhulme noted. “This shows that the community’s elected officials are fully engaged in this high-priority issue. I appreciate the extra due diligence the board is taking.”

It was necessary for Friday’s meeting to be a closed session because it involved a review of legal and personnel matters. (See Idaho Code 74-206).

The case will be on the agenda at the board’s next public meeting, Monday, January 7, 4-7 pm. That meeting was called as a special work-session to focus on a review of student achievement data with the school district administrative team, and how that relates to the district’s five-year Strategic Plan.
Updates about the case will be made at each regularly-scheduled meeting of the board moving forward, including the board’s next regularly scheduled meeting on Monday, January 14, at 5:30 pm. To enable more of the public to follow district business, regularly-scheduled meetings are typically livestreamed on the district’s Facebook page.

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