UPDATED 7:23 P.M. The person responsible for paying Center Grove employees paid herself more than $300,000 over the course of four years, according to the findings of an investigation by the Indiana State Board of Accounts.
Emily Holmes, a former payroll clerk for Center Grove Community Schools, accessed 35 former employees’ payroll accounts, continuing to pay them after their departures, but depositing the money into her own bank accounts. She also deposited a former employee’s worker’s compensation check into an account of her own, the audit, which was filed Tuesday, revealed.
The U.S. Attorney’s Office has filed charges, according to a letter to faculty and parents from Rich Arkanoff, Center Grove schools superintendent.
“The investigation revealed these people were not owed, nor did they receive these wages. However, some of the wages were reported to the Internal Revenue Service through Center Grove’s payroll system,” Arkanoff said in the letter. “The terminated employee is facing federal charges of wire fraud, aggravated identity theft and tax evasion.”
Center Grove school officials hired Holmes in September 2014. Between January 2016 and April 2019, 92 payroll direct deposits and 13 checks were deposited into Holmes’ accounts, but in the name of former employees. An inquiry by a former employee led to the investigation, according to the state board of accounts report.
Center Grove schools is asking that Holmes reimburse them $292,983, according to the report. The extensive investigation cost the state $22,348, which Holmes is also being asked to pay for, the report said.
Center Grove schools is reviewing and establishing new payroll procedures, according to the report.
“As a public school corporation, we work very hard to be good stewards of the taxpayers’ hard-earned money. We have to have a level of trust with our employees. And in this case, we had a person who violated not only the trust of the employees in our school district, but also the taxpayers in White River Township,” Center Grove schools said in a statement included in the report.
“We have been working with an outside accounting firm for the last eight months to make right any issues created by this fraud for the former employees who were victims. That includes correcting IRS reports and any other related concerns. We have also contracted an independent review of our processes and put in place additional controls in our systems to ensure that an incident like this does not happen again. We have begun the process of recovering funds and will continue to do whatever we can to recover the funds taken from our accounts.”
State board of accounts employees discussed their findings with school officials, Holmes and her attorney on Jan. 28, the report said.
“We appreciate the diligent work of the Johnson County Sheriff’s Department, the FBI, the IRS, the State Board of Accounts, and the US Attorney’s office to bring the terminated employee to justice,” school officials said.
The Johnson County Sheriff’s Office began investigating Holmes in April. At the time, the sheriff’s office and school district wouldn’t say if money was missing, the nature of the financial crime or the dollar amount involved.
Government agencies, including school districts, are required to notify the Indiana State Board of Accounts when a theft or misappropriation of funds occurs, which Center Grove officials did, said Matt Light, chief of staff for the Indiana State Board of Accounts.
Center Grove officials reported the incident to the state agency that audits the finances of government agencies. They also called the sheriff’s office on April 23 to ask for an investigation into an alleged financial crime that involved the entire school district, Sheriff Duane Burgess said at the time.
This story will be updated.
