Northeast Nebraska school misused more than $300,000, state auditor report shows

Administrators and board members at Isanti Community Schools spent more than $300,000 of school funds on questionable purchases, including golf equipment, gifts cards and a senior trip to Florida, according to a state auditor report released this week.

The auditor’s office found $102,000 in controversial credit card purchases, $146,000 used to incentivize students to register for school, and several problematic reimbursements to the previous superintendent.

Nebraska State Auditor Mike Foley said his office received a tip, which led to the discovery of almost 1,300 questionable credit card transactions.

“We believe it was about $100,000 over a 13-month period where people were just going crazy with credit cards and abusing them and having expensive meals and travel and gaming systems and trips to the nail salon,” Foley said. “All kinds of things that you would never, never anticipate a public school district doing with tax dollars.”

Those credit card purchases include almost $40,000 in meals, about $30,000 in lodging and $146,000 in registration incentives for students.

Isanti Community Schools had a 45% chronic absenteeism rate in the 2023-2024 school year, more than double the state’s average of 21%, according to Nebraska Department of Education data. That means almost half of the district’s students missed 10% or more of school. However, that was down from the previous school year’s rate of 68%.

According to the audit, the district used $146,000 to motivate students to register for school. Students would receive $400 Walmart gift cards and $200 cash incentives for doing so.

“It's a gift that they're getting a free education to start with, but then they have to pay them to come and get the free education,” Foley said. “That's an insult to the taxpayers, and it just cannot be tolerated. Taxpayers are burdened with high property taxes, and property taxes pay for the school system by and large, and it's just wrong to treat taxpayers with such contempt and disrespect.”

Foley added that there were no records that students received those incentives. There was another $68,700 cash withdrawal that Foley said no one at the school or on the school board could explain.

“The accounting controls up there were horrible,” Foley said.

The school district released a statement in response to the audit.

"Isanti Community Schools takes the Nebraska State Auditor’s findings seriously and appreciates the role of oversight in maintaining public trust," the statement said. "The concerns raised reflect past practices, which occurred under former leadership and prior boards. Since January 2024, we have implemented significant reforms, including tighter financial controls, improved documentation, increased oversight, and change in auditors. We are committed to transparency, and we voluntarily reported concerns to the State Auditor’s Office. Our focus from now on is moving forward – ensuring accountability, protecting public funds, and restoring confidence in our stewardship."

The audit looked at the misuse of funds from Jan. 1, 2023 through Feb. 29, 2024. The school district’s current superintendent started in January 2024.

“I think the question that keeps crossing my mind is, what were these adults modeling for these children?” Foley said. “They're modeling irresponsible behavior, and that's the last thing they want to model for young students.”

According to Foley, the auditor’s office doesn’t have the authority to make the school pay back the money. A Nebraska Department of Education spokesperson said the department is “not aware of any obligation to pursue taking funds back.”

The State Board of Education meets on June 6. NDE identified all three Isanti schools as priority schools, meaning the district has been working with the state to increase student attendance and improve test scores. The spokesperson said that while the audit is not currently on the agenda for next week, discussion about priority school updates is.

Foley said he hopes the audit’s findings will push the community to call for improvements.

“The parents, the local communities got to rise up and say, ‘Enough is enough,’” Foley said. “‘We're going to clean this up. We want our kids to have a future, and it's going to be built on getting a good education.’”

State Audit on Isanti Community Schools