Lessons learned from 2016 case improve district’s financial practices
The Boulder Valley School District has long had a solid reputation of efficiently using tax dollars. Understanding the worth of these resources and the trust that has been invested in BVSD, the school district has implemented additional measures to ensure those monies are protected.
Over the past six months, the district has implemented several new practices to avoid fraud, utilizing the lessons learned from a case of financial theft that happened last fall.
In a sophisticated criminal activity involving fabricated email and websites, a fraudster, using information that was available publicly, posed as a BVSD construction contractor. The suspect successfully changed the routing number for the company, diverting three months of payments into the wrong account, totaling $851,000.
When the issue was brought to the attention of BVSD, district leaders worked with its partners at the Boulder County Sheriff’s Office to recover the funds and to hold the fraudster responsible. As of today, the total maximum loss to the district of $172,000. Unfortunately, the suspect has fled the country, making prosecution difficult.
It is important to note that this remains an open criminal investigation and legal case. Following the advice of investigators, the case was not publicized. It would have been discussed, however, when the district submitted its 2016-17 Comprehensive Annual Financial Report in November.
Fraud protections instituted
Consulting with financial organizations and our auditors, BVSD implemented several best practices to avoid this type of fraud in the future. For example, when someone asks to change a routing number for a vendor, we confirm with the contact in our files before making any changes. This simple change, alone, has already helped the district thwart one new cyber deception attempt.
The Boulder Valley School District remains committed to transparency. The district understands that there is an important balance of providing the information needed to ensure accountability, while also ensuring that everything is done to keep district resources secure.