Catch Risk Before it Turns Into Headlines: 5 Steps to Strengthen School Finance Controls
School finance risk rarely announces itself. It often starts small and virtually undetectable — a missing receipt here, a delayed deposit there — until the numbers start adding up and the ledgers stop reconciling.
As Dr. Anya Bailey Randle, Executive Director of School Systems Financial Support Services for the Louisiana Department of Education, cautions:
“Most districts don’t lack integrity. They actually lack visibility, and that’s what opens the door to the risk of financial mismanagement.”
Dr. Randle shared this warning during a recent webinar, 7 Early Signs Your School Funds Aren’t Secure, where school finance leaders discussed how better systems and controls can stop financial risk before it grows.
Schools experience high risk of fraud
Behind every fundraiser, concession stand, and field-trip payment, there’s risk hiding in plain sight.
“63% of all K-12 fraud happens at the school level — not the district office, not external cyber attacks, but inside the schools where cash is collected, disbursements are made, and oversight is limited.”
Nearly all cases involve internal staff, such as bookkeepers, coaches, or volunteers. These are often well-intentioned people simply trying to do their jobs the best they can. But when financial activity relies on manual tracking and informal processes, even honest mistakes can escalate into compliance issues or reputational damage.
Financial risk warning signs: 7 red flags to look for
Dr. Randle outlined seven recurring warning signs that many districts often overlook until it’s too late:
- No receipts for cash or checks
- Use of personal payment apps (Venmo, PayPal)
- Missing documentation for disbursements
- Irregular deposits or inconsistent counts
- Delays in reconciliation
- Unusual balances or unexplained transactions
- Manual tools with no audit trail
“Fraud doesn’t start off big. It grows in silence. This is exactly why early detection matters.”
While each red flag may seem small, together they form a pattern that can quickly sprawl into significant risk.
The cost of missed warning signs
Across the country, districts have faced real-world consequences when these signs go unchecked.
“At Hardee High School in Florida, a bookkeeper embezzled nearly $300,000 over several years. She manipulated cash ledgers, issued false receipts, fabricated records … and it went undetected for years.”
Similar incidents have hit major districts, including one where an assistant principal routed after-school fees through a personal PayPal account, moving $273,000 outside the district’s view.
The financial hit was severe, but the greater loss was public trust.
How leading districts respond
While some districts learn the hard way, others act early.
“At Wappingers Central School District, they were seeing multiple red flags … Rather than let that problem grow, they acted … They launched a formal audit, alerted the public, and partnered with KEV Group to deliver robust, transparent financial controls.”
Wappinger’s quick, transparent response prevented a potential crisis, strengthened community trust, and built long-term accountability. As Dr. Randle noted, “Audits work when paired with swift action. Transparency matters.”
5 steps to strengthen financial controls
To reduce financial risk and improve accountability, Dr. Randle recommends these five practical steps any district can take to improve visibility:
- Get audit-ready before you have to be: Build daily workflows that leave a clear audit trail. Every receipt, every approval, every dollar should have a digital paper trail. As Dr. Randle puts it: “Stay ready so you don’t have to get ready.”
- Centralize your view of school funds: Connect school-level data to the district level so nothing slips through the cracks.
- Shut down shadow systems: Replace personal apps with district-approved, secure platforms that support all payment methods.
- Tighten disbursement controls: No documentation, no payout — structure prevents mistakes from becoming findings.
- Make reconciliation easy so it actually happens: Simplify and standardize reconciliation to make it a monthly control, not a chore.
“It’s not about being perfect. It’s about making progress, and every move you make toward visibility, accountability, and control sets your schools up for long-term success.”
How to measure your financial maturity
For districts looking to evaluate their current practices, the K–12 Financial Maturity Assessment offers a valuable benchmark. This short, diagnostic tool helps districts pinpoint strengths, uncover risk, and get tailored recommendations to improve their financial operations.
Fraud prevention is a community responsibility
Fraud prevention isn’t just about compliance — it’s about protecting the trust between schools and their communities. When every transaction is transparent and every audit trail is clear, every dollar serves students as intended.
For more best practices to strengthen financial visibility, watch the webinar.