Audit Buzz Newsletter April 2025

Engagement and Office Updates

In this issue of the Audit Buzz, we provide an update on current engagements, an article on a 2024 scandalous fraud case, our celebration of the May Internal Audit Awareness Month, and a training opportunity.

Prior editions of Audit Buzz are archived here on Office of Auditor General (OAG) website.

As always, we appreciate the cooperation and courtesies extended to our staff by Fairfax County Public Schools (FCPS) management and staff during all past, current, and future audit engagements.

Here is a challenge to test your audit knowledge, before we begin this issue:

Say What You See

*Hint: This is an OAG Fiscal Year (FY) 2025 audit topic

Current Engagement Update

At the April 28 Audit Committee meeting, OAG presented the following agenda items:

• FY26 Risk Assessment and Proposed Audit Plan Presentation and Document - OAG presented the results of the FY26 risk assessment and proposed audit topics. Audit Committee unanimously agreed to move these documents for the full Board discussion at the June 17 Work Session.
• FY25 Business Process Audit (BPA) Summary and BPA Reports for Daniels Run Elementary, West Springfield Elementary, Great Falls Elementary, Mount Vernon High, and Warehouse Operations - These five audits identified four moderate risk and 13 low risk findings. These findings related to reconciliations, the purchasing process, sufficient documentation, timely deposit, and timely payment.
• FY25 Quarter 1 and Quarter 2 Continuous Monitoring Results  - OAG presented the results of the continuous monitoring procedures. Out of 78 sites reviewed, 36 sites had no exceptions; 28 sites had exceptions in three or fewer areas; and 14 sites did not have any transactions appear in the sample of continuous monitoring. Exceptions were related to reconciliations, pre-approval of disbursements and procurement card transactions, timely payment, and sufficient documentation.

A 2024 Scandalous Fraud Case

One of the pillars of OAG work is the management of the anonymous fraud, waste and abuse hotline (571-423-1333). In this issue, we highlight a scandalous fraud case in 2024. While this case is not from FCPS, there are lessons which we could take-away from it.

Fraud Committed:

A former financial manager for the Jacksonville Jaguars (a National Football League franchise), orchestrated a wire fraud scheme resulting in significant financial losses and organizational impacts. The former manager used his role as the administrator for the Jacksonville Jaguar’s virtual credit card (VCC) program, to make hundreds of purchases and transactions with no legitimate business purpose from September 2019 until February 2023. To hide and continue to operate the scheme, the former manager created accounting files that contained numerous false and fraudulent entries and emailed them to the Jaguar’s accounting department.

Financial Cost:

The former manager misappropriated approximately $22 million from the Jaguars by exploiting the role as administrator of the team’s VCC program.

The former manager was ordered to pay full restitution to the Jaguars and forfeit assets equivalent to the embezzled amount. However, he has returned only about $2 million, leaving an outstanding balance exceeding $20 million.

Impacts:

In March 2024, the former manager was sentenced to 78 months in federal prison after pleading guilty to wire fraud and engaging in illegal monetary transactions. As a result of the fraud scheme, the organization implemented enhanced checks and balances within their financial operations to prevent similar incidents in the future.

In addition to the criminal proceedings, the Jaguars filed a lawsuit against the former manager seeking over $66 million in damages, triple the amount he admitted to stealing.

This case underscores the importance of robust internal controls and vigilant oversight in safeguarding organization assets against fraudulent activities. 

How could we apply the above lessons learnt at FCPS?

The Auditor General is authorized to receive and preliminarily review (and as necessary, investigate, either directly or in conjunction with internal investigators of the Department of Human Resources) credible reports of waste, fraud, and abuse, where observed or reasonably believed to have occurred, involving any FCPS employee or FCPS assets if such has caused or is likely to cause injury to the school division according to Regulation 1410, Procedures for Reporting and Investigating Embezzlement, Fraud, Waste, or Abuse, and Other Financial Wrongdoing. Through the anonymous fraud, waste and abuse hotline, OAG provides FCPS employees and the community a confidential means for reporting suspected wrongdoing involving fraud, waste, and abuse of school assets and resources. During FY24, OAG received a total of 79 reports to the Hotline, with 16 of the reports related to use of assets.

Source: OAG Internal Inquiry Updates, March 2025 Audit Committee

Reporting Fraud, Waste, and Abuse at FCPS

OAG takes all complaints and reports seriously and will make every effort to investigate the reports according to applicable laws, codes, policies, or regulations.  You can assist us in our review by providing as much information as possible.

You are encouraged to leave your contact information to enable us to gather or clarify information as needed.  If you choose to remain anonymous, ensure that thorough and detailed information is provided to enable a review of your complaint.

In addition to the FCPS fraud, waste, and abuse hotline (571-423-1333), see the bottom of this issue for additional ways to report.

Did You Know?

Internal Audit Awareness Month

To raise awareness and recognize the Office of Auditor General (OAG), May has been designated as the Internal Audit Awareness Month by the Institute of Internal Auditors. FCPS employees please join OAG to celebrate on May 14 (Wednesday) in the foyer of Gatehouse Cafe from 11:00 AM to 12:30 PM. 

OAG serves and operates at the direction of the School Board.  The School Board Audit Committee serves to promote the independence and objectivity of OAG by ensuring broad audit coverage, adequate consideration of audit reports, and appropriate action on recommendations.  OAG has an important purpose within FCPS, as our internal auditors.

OAG Outreach and Education: Continuing Professional Education (CPE) Opportunity

OAG is registered with the National Association of State Boards of Accountancy (NASBA) and serves as the sponsor for the FCPS Continuing Professional Education (CPE) programs, dedicated to support FCPS employees with complimentary CPE credits required by various certification agencies.  OAG is pleased to offer a new NASBA training opportunity for FCPS employees to earn up to three CPE credits:

Course: The Pillars of Trust: Checks & balances, Ethical Conduct, and Your Role

Date: July 18, 2025

Time: 9:00 AM - 12:00 PM

During this training, participants will learn from the industry leading internal controls frameworks and apply them at work.  In addition, participants will be able to leveling-up the ethical intelligence.  All FCPS employees should conduct themselves in a manner that promotes and supports good ethical decisions. We will highlight ethical intelligence and why it is important that all FCPS employees act in an ethical manner when facing difficult decisions.

FCPS employees may sign-up for the training on MyPDE.

Upcoming Events 

Next Audit Committee Meeting

The next Audit Committee meeting is scheduled for June 16 at 4:30 PM.  Please refer to BoardDocs for meeting information once it becomes available. 

Fraud, Waste & Abuse Hotline:

(571) 423-1333 (anonymous voicemail)
InternalAudit@fcps.edu (email is not anonymous)

Online Submission Form

[Answer: Construction and Renovation Contracting Audit]

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