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Report documents missing funds from school district

Minnesota's Office of the State Auditor has determined that the Norman County East School District is out at least $118,701 because funds were not deposited in district accounts as they should have been.

The information was sent to the Norman County attorney's office, but the investigation into missing funds is ongoing and no charges have yet been filed, according to Dean Krogstad, the school district's superintendent.

In March, the district's longtime bookkeeper, Marce Bentley, resigned after Krogstad began asking staff members about financial irregularities.

At the time, Krogstad said Bentley faced allegations of misconduct.

The state auditor's report, which looked at school financial records from July 2006 to March 31 of this year, does not mention Bentley by name, but links the district's "bookkeeper" to the $118,701 in funds that were not deposited in school accounts.

The missing money included $10,981 in checks that were made out to the district but never deposited into district accounts.

"It appears the checks were cashed by the bookkeeper," the report said.

Also, thousands of dollars in cash received at sporting events could not be accounted for because they were not receipted in the school district books, according to the report.

The state auditor's office sent a letter to the School Board outlining controls and procedures the district should adopt to prevent future problems.

Krogstad said the district already has implemented many of the suggestions, and he said the changes helped investigators document where problems occurred over the past two years.

The report states that a review of prior years would likely disclose additional missing money, but "resource limitations" prevented that.

Krogstad said it is his understanding that the paper trail was insufficient to document problems before July 2006.

Reached at her Twin Valley, Minn., home by phone, Bentley declined to comment on the report or answer any questions.

Earlier this year, the School Board approved more than $200,000 in budget cuts.

In 2007, Norman County East was on the state's short list of districts facing large budget deficits.