The former school bookkeeper of Beech Elementary School stole nearly $20,000, according to an investigative audit performed by the Tennessee Comptroller's Office.
According to the audit, Peggy Knight used several different schemes to steal more than $17,000 from the school and nearly $2,000 from the school's picture vendor between July 1, 2008, and Sept. 15, 2010.
The audit was performed by the Comptroller's Division of Investigations in coordination with the Sumner County Sheriff's Department.
According to the audit, Knight used more than $13,000 in school funds to pay her personal bills and loans as well as to pay for personal purchases of electronics, groceries and other items. She hid this activity by creating false invoices and other documents while altering others. Knight also forged the signatures of school personnel on the invoices, receipts and checks.
Knight invented abbreviations for some check recipients that would coincide with the vendors to whom she was sending them, albeit to pay her own obligations and not those of the school. For instance, one $852 check was made out to "WDS," according to the audit, which in school records was fictitiously created by Knight to reflect that it was supposed to pay "Walt Disney Supplier" for framed art for the library. However, investigators were able to trace the check to its recipient and discovered that it actually paid for a vehicle loan in the name of Ms. Knight's husband at "Wachovia Dealer Services."
Knight also stole more than $4,000 in cash collections from the school and $1,713 in payments intended for the school's picture vendor, Lifetouch National School Studios, Inc.
According to investigators, because Knight had total control over school collections once they arrived at the office, she was able to manipulate the school's computerized accounting records.
In April, Knight was indicted by the Sumner County Grand Jury on two counts of theft, one count of money laundering and 19 counts of forgery.
In addition to documenting Knight's actions, investigators noted the principal's failure to review supporting documentation prior to signing checks and failure to review school bank statements and related imaged checks and deposit slips, which allowed Knight to go undetected for so long.
Deficient safeguards in teacher collection procedures, fundraiser documentation and even Knight's own inadequate accounting records and bookkeeping procedures all contributed to her ability to carry out and conceal her theft of school funds.
"Auditors refer to bookkeeping and accounting safeguards as internal controls - and those controls were certainly lacking in this case," said state Comptroller Justin P. Wilson. "It is deplorable whenever officials in positions of public trust abuse those positions, particularly in cases in which money intended to be spent on children is involved."
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