Thursday, February 08, 2018

Jasper R-5 officials might as well have just opened the drawer and handed Karla Jessee the money

A lack of safeguards enabled Karla Jessee, also known as Karla Justice, to divert at least $145,000 from Jasper R-5 School District accounts into their own personal accounts.

The methods she used during her embezzling spree were described in a section of her plea agreement filed Wednesday in U. S. District Court for the Western District of Missouri.

A federal grand jury indictment charging Jessee with embezzling was unsealed Wednesday and during her initial appearance, she pleaded guilty and faces up to 35 years in prison without parole. A pre-sentencing investigation has been ordered and she will be sentenced at a later date.



The court records described a woman who was not just skinny dipping in the till, but wallowing in the taxpayers' trough with no one paying any attention to what she was doing:

Based on a referral from the Jasper County, Missouri, Sheriff’s Office, 0n February 10, 2017, Special Agent (SA) Jason Ruyle, with the United States Secret Service (USSS), initiated an embezzlement investigation involving JUSTICE.

During his investigation, SA Ruyle learned JUSTICE was responsible for the payroll for the DISTRICT and the DISTICT’s school board. JUSTICE had access to the DISTRICT’s petty cash checkbook and signatory authority for this account. Further, JUSTICE had access to the signature stamps of school officials, which effectively gave her complete access to funds within the school district’s operating account. JUSTICE’s positions with the school district gave her unrestricted access to the account and payroll systems for the school district, including posting entries, making changes, making journal entries, performing any reconciliations, entering and changing employee i

information into the payroll system, and presenting financial reports and information to the School Board for the DISTRICT.

JUSTICE essentially had unlimited access to every aspect of the account and human resources functions for the DISTRICT.

Upon meeting with school officials, SA Ruyle learned that the DISTRICT had experienced financial difficulties and had began analyzing its budget. During the DISTRICT’s financial analysis, officials noted irregularities in payroll payments made by the DISTRICT, unexplained credit card payments, and missing monies from the petty cash account. School officials observed that these irregularities and missing monies fell under the supervision of JUSTICE. School officials approached JUSTICE and asked her to reconcile and explain the irregularities and short fall in monies. After receiving the DISTRICT’s request to reconcile the irregularities, JUSTICE immediately wrote out a letter of resignation and provided it to school officials.

On March 29, 2017, the DISTRICT hired BKD CPAs and Advisors to conduct a financial forensic audit of the School District’s accounts. BKD’s financial forensic audit of the DISTRICT’s accounts reviewed payroll, petty cash, retirement contributions, checks cashed, credit card transactions, and purchases of DISTRICT assets for personal use. BKD’s report and a subsequent review by the USSS found JUSTICE had paid herself additional monies, compensation and salary, above the amount noted within her contract. The financial audit revealed that JUSTICE, without authority and without providing the services required for such payments, issued herself additional payroll payments, compensation and money from the DISTRICT’s various bank accounts. JUSTICE also received greater retirement contributions as a result of the increased payroll that she fraudulently issued to herself. 




The investigation revealed that the payroll payments received by JUSTICE were made through the withdrawal of monies from the bank accounts of the DISTRICT, resulting in the deposit of monies into JUSTICE’s personal bank account. The resulting wire transmissions between the two financial institutions crossed interstate boundaries, constituting interstate commerce. BKD’s audit found that between 2014 and 2017, JUSTICE fraudulently authorized $80,858.15, in additional payroll above and beyond the amount allowed under her employment contract with the School District. As a result of the fraudulently received payroll JUSTICE also received an additional $6,731.67 in employer retirement contributions, and $6,530.40 in Social Security and Medicare contributions that she would not have received otherwise.

In addition to the fraudulently obtained payroll and retirement contributions, the BKD audit and subsequent law enforcement investigation revealed other areas in which JUSTICE either embezzled monies from the DISTRICT or fraudulently used credit cards in the name of the DISTRICT to pay for her personal expenses. JUSTICE held sole signatory authority for the petty cash account for the DISTRICT. The investigation discovered numerous transactions, including checks and E-checks that totaled $13,929.53 in transactions that were conducted by JUSTICE to pay for personal expenses that were unrelated to the activities of the DISTRICT, and were not authorized by the DISTRICT.

The investigation further revealed numerous checks that had been written on the operating account for the DISTRICT. According to DISTRICT procedures, JUSTICE did not have authority to write checks to this account but she did have access to the signature stamps for school officials, who did have signatory authority over this account. Several employees with the DISTRICT informed investigators that JUSTICE repeatedly asked them to cash checks for her. School officials told investigators that each of the checks discovered during the investigation were fraudulently created and JUSTICE’s request that other employees cash these checks and give her the money was done to bypass safety measures created to prevent employees from directly cashing checks made out to themselves.

23 comments:

Anonymous said...

Any business should have at least two check systems in place. One person posts checks and payments and a different person totals them and makes the deposit.

The bookkeeper balances the checkbook and takes care of accounts receivable & payable and at least once a quarter an outside accounting firm reviews all the records for any discrepancies or possible fraudulent entries.

Basic safeguards people!

Anonymous said...

At least in her picture she looks "pretty". Guess that's what your $145,000 bought.

Hope they lock her up.

Anonymous said...

Have the McPherson's been ruled out as potential suspects?

Anonymous said...

Every school system has an independent financial audit by an outside organization each year. The school board and patrians are relying on those auditors to protect them from this very thing. My question would be why didn't they catch this sooner.

Anonymous said...

Its all good, probably just needed some "seed" money. Lets all pray.

Anonymous said...

Who’s “their” personal accounts? The superintendent at the time OR school board member who was trying to get with a then married woman?

Anonymous said...

What does “seed” money have to do with anything?

Anonymous said...

She came to work for my employer after stating she was looking for something closer of a drive due to a recent divorce. A few short months later she was caught taking money and let go. I worked with her daily and heard a lot from her regarding her personal life. I felt betrayed, she was dumb enough to send an apology text to me personally stating she was sorry. And admitted to taking money.i knew then, by her actions this was not the first time she has done this. And soon after I learned about the real reason she needed a new job. I hope she doesn't get a slap on the wrist. She has a serious problem. It's really sad, yet disgusting. She has children and grandchildren. And with all that money, she was always complaining of being broke, and how she couldn't afford her car payment. Smh... where did all this money go?

Anonymous said...

Yes let's all pray that this tiny school district with low income families and needy students can somehow focus on student achievement and not sexual abuse by staff members, the revolving superintendent position and now embezzlement....pray for the students and families that call that place home.

Anonymous said...

The district is claiming this caused their financial hardship. What about the over spending that was done by the previous superintendent who was asked to resign? Overspending on FEMA building, buying property for a preschool that was totally renovated and no longer in use, purchasing school buses and other items that were in excess. If the district is in such a hardship how have they been able in the past year to hire additional full time employees, creating new positions for additional employees? Why hasn't this been mentioned? And some of these expenses that the board clerk is being held accountable for, holiday dinners for board members, food from the district taken to a board member when there was a death in the family, items that were used for the district and purchases that her superiors had asked her to make. Everything that she's accused of had to be signed off by the superintendent, school board and an audit was performed, there must have been documentation to account for approval in order to have passed through all these barriers. Just some things I have been pondering. Yes, she committed a crime but so did others in that district and they are the ones pointing fingers.

Anonymous said...

Here you go Randy!

Take a look at page 51 of the audit for Neopsho R-5 for the year ending June 30, 2010

Go to page 51 and start with the section titled:
B. FINDINGS - FINANCIAL STATEMENTS AUDIT
MATERIAL WEAKNESSES
10-1 Segregation of duties


and read what the auditors observed and warned R-5 about in 2011.

Also note the response the auditors reported that R-5 made to the findings. Note that one apparently can substitute "theft" for "irregularity" in this instance.

Anonymous said...

Looks like she’s guilty. But what about the superintendent during this time that was fired for misuse of funds? Why has he not been investigated?? And as someone else posted why didn’t school officials find this sooner? Only answer I can think of is more than one person involved. Had to be many involved if $145,000 is missing Cannot believe a secretary did all by herself. Looks like they found a scapegoat Next step should be removal of every school administrator, board member and accounting and auditing firms. Jasper should take back their school for the kids and taxpayers. If gonna let these people continue to run school close it and join another district. Corruption and sex scandals have gone on too long.

Anonymous said...

Apologies for posting the wrong link in the comment above posted at 7:37 pm. For the post referencing Jasper R-5 School District an audit of Jasper R-5 School District should be referenced. The comment posted here at 7:37 pm should have read:

Take a look at page 47 of the audit for Jasper County R-5 School District for the year ending June 30, 2013.

Go to page 47 and start with the section titled:
II. FINDINGS - FINANCIAL STATEMENT AUDIT
Finding 2013-1 - Internal Control



and read what the auditors observed when auditing Jasper R-5 School Distict in 2013.

Also note the responses the auditors reported that R-5 made to the findings.

Anonymous said...

Yea. What about superintendents. Supt Fall must of been there when this began and resigned. Then Supt Stark was there and got fired. Then Supt Fall returned and “resigned” again? Was this to cover their tracks so no one could link them to this? Suspicious to say the least

Anonymous said...

Don't try to make excuses for her. She is a thief.

Anonymous said...

Fall retired then Stark was hired. Fall came back only as an interim superintendent.

Anonymous said...

Read the first line of 8:32....admitted she was guilty. Not making excuses just posing valid questions. One has to wonder how this "thief" got away with so much for so long....

Anonymous said...

In reading through auditors findings it is noted that there is insufficient trained personnel responsible for the district bookkeeping. The district responded by stating they would provide more training and more personnel....did the district or should I say superintendent follow through with the written response they provided to this write up?? Kinda doesn't sound like they did a damn thing until they fired Stark....2 or 3 or was it 4 years later?? Huh....

Anonymous said...

Can you list the exact years that Stark was employed by the district? According to the article, Justice was employed by the district 2009-2016 but only embezzled funds 2014-2017...I guess she kept on stealing after she resigned....but waited 5 years to start stealing....STRANGE.

Anonymous said...

You knew by her actions of apologizing that she had done this before? Do felonious thieves make it their best practice to apologize after stealing? Just curious

Anonymous said...

Quit trying to make excuses for her. She is a liar and a thief and deserves a harsh sentence for stealing money from the people.
If she had done it once or maybe evebmn twice, she might get cut a little slack, but come on. $145,000 over a 3 year period. She is a FELON and a ROBBER. Lock her up. I don't care if she is a mother and a grandmother. She broke the law. Period.

Anonymous said...

Food for thought... This woman stole much more than what was reported... She was in charge of concessions for several years... She was the sole individual responsible for deposits from nightly concessions... How many of those deposits were skimmed?? I would imagine tens of thousands of dollars over her career. While the Superintendent at the time was released, I don't know how he skated around responsibility for this issue. He MUST HAVE turned a blind eye to this there is no other explanation.

Anonymous said...

Karla Jessee was hired at Jasper R-5 in 2005. Not sure why everyone seems to be writing she wasn't employed until 2009. She became the Board Clerk and Superintendent's Secretary in June 2006. As for the years she stole, 2014-2017, they are just the only years they can go back and actually prove the theft. I am sure there was much more stolen than what she is charged with. The audit report that was posted in a link in someone's comment above, says no one at the district could even complete a financial report but that the auditors did the financial statements. What a loss that proved to be! There are more involved besides her!