Byron school district makes changes following OSA report

Byron school district makes changes following OSA report

Alex Malm

Staff Writer

The Byron school district is making changes to its purchasing procedures following a negative review by the State Auditor Office.

According to an Oct. 28 release, State Auditor Julie Blaha sent a letter to Byron Public School Board members and the superintendent outlining findings from a review of the district’s credit card purchases from July 1, 2023, through Dec. 18, 2024.

The review found the district had failed to provide the Office of the State Auditor “with complete documentation for its credit card activity.”

According to the release, 30%, or just under $60,000, of purchases lacked required receipts or itemization, and the district used its credit card to buy gift cards, a generally unauthorized practice.

“The findings in the Byron review continue a troubling trend we have seen in local governments’ use of credit cards,” Blaha said. “Minnesota laws governing local government credit card purchases include safeguards to protect taxpayer funds from fraud, misuse, and error. Thorough documentation is a key safeguard, along with appropriate review and approval processes. Without the required documentation, governing bodies are hamstrung in ensuring public dollars are spent lawfully and prudently.”

The letter outlined how the OSA recommended the district “maintain records of all credit card purchases, require itemized receipts, refrain from purchasing gift cards, and adopt a formal policy for credit card use and board oversight.”

Changing Policies

At the time of the discrepancies, the school district was under the leadership of former Superintendent Dr. Mike Neubeck, who resigned following a failed levy vote last year and after a petition circulated calling for his resignation.

He currently is the interim superintendent of Jackson County Central Schools.

When asked for comment, current Superintendent Nate Walbruch referred to a letter sent out to the district.

“We are appreciative of the collaboration with the Office of the State Auditor. Byron Public Schools accepts the findings, and we are using this report to continue solidifying our practices and commitment to integrity and transparency,” he wrote.

Walbruch went a step further, saying the district has changed its practices.

“Safeguarding Byron Public Schools resources is our highest fiduciary responsibility,” he said. “We have taken action on these items prior to the review by the State Auditor’s Office. In fact, Auditor Blaha commended our current staff taking action to correct and prevent these issues in the future.”

The protocols include:

Adopted a p-card (similar to credit cards but with additional controls) policy requiring receipts to be itemized, reviewed and approved by the finance department prior to payment. Credit cards have been canceled.

The purchase of gift cards is strictly prohibited by Byron Public Schools. Misuse by staff will result in staff reimbursement to the District and immediate revocation of card p-card privileges

Changes to the purchase order (PO) process. All POs are required to have detailed descriptions, and open POs are no longer allowed

A detailed listing of all p-card purchases is provided to the School Board Treasurer, increase oversight for each transaction

Eliminated charge accounts to vendors to simplify compliance and ensure control of purchases.

 

“These adjustments represent more than surface-level adjustments; they establish new, higher levels of financial controls for Byron Public Schools,” he wrote.

Blaha was appreciative of the district’s efforts.

“I commend the new school district staff for already beginning work on such a policy,” Blaha said. “That responsiveness bodes well for future internal controls and compliance.”

Walbruch said the conversation isn’t over. He expects to have a public conversation about it on Dec. 1.

“I look forward to sharing the findings from the State Auditor’s Office at the School Board’s next work session meeting on Monday, December 1st,” he wrote. “I remain committed to earning and keeping the trust of our community by being transparent and diligent in caring for the resources the public entrusts to us.”