Indiana has stopped auditing extracurricular accounts at school systems because of a lack of manpower, raising concerns that the absence of oversight could contribute to new problems with accounts already prone to lax financial controls.
The State Board of Accounts saw its annual budget drop from $22 million to $17.5 million and its staff shrink by 110 as part of cuts from 2007 to 2009. The agency is also replacing retiring field examiners, who had 30 to 40 years of experience, with inexperienced hires.
The audits have proved invaluable in identifying problems with extracurricular accounts. For example, the last audit in Muncie found a lack of controls at Central High School, whose athletic department, softball team, track team, band, student publications, and student council conducted fundraisers that all resulted in losses.
