Audit uncovers missing funds from schools; corporation treasurer resigns as search begins

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The Switzerland County School Corporation and the entire county are reeling at the news that a school official may have embezzled hundreds of thousands of dollars from school accounts over the past five years – and field representatives from the Indiana State Board of Accounts are going through detailed records to determine exactly how much money is missing.

School superintendent Tracy Caddell said that a discrepancy was found early last week by school officials and the State Board of Accounts, which was here conducting the normal audit that school corporations go through every two years.

On Wednesday the school corporation asked corporation treasurer and business manager Ann Geyman to return from a seminar in South Bend, Indiana, to discuss the issues, and late Wednesday night she submitted her resignation to the superintendent. That resignation will be considered by the school board at its meeting this Monday night at Switzerland County Elementary School.

The school board could accept the resignation, or it could choose to deny the resignation and take other action – such as firing Ann Geyman.

On Thursday, corporation attorney Ron Hocker and C. Duane O’Neal of the law firm of Lewis and Kappes in Indianapolis filed a series of suits in Jefferson County Circuit Court against Ann Geyman and MainSource Bank, where school funds are held.

The school corporation filed a “Verified Petition for Temporary Restraining Order and Damages” in Judge Ted Todd’s courtroom.

In documents filed in Jefferson County Circuit Court Clerk Kim Smith’s office, the school corporation alleged:

– (Ann) Geyman is employed as the full-time Treasurer and Business Manager of the School.

– The School has reason to believe that Geyman has converted for her own use, without authorization, funds belonging to the school believed to be in excess of One Hundred Thousand Dollars ($100,000).

- The School has specific and credible evidence of the unauthorized transfer of school funds by Geyman for her personal use and control, in excess of Twenty-Five Thousand Dollars ($25,000).

– The School believes that such conversion occurred from the period of 2005 to present.

– The State Board of Accounts is aware of these unauthorized transfers and is continuing its investigation.

– The School has reason to believe that unless this Court orders the account depository, Defendant, MainSource Bank, to dishonor all transactions in such account, the funds deposited therein my be dissipated.

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In its civil suit, the school corporation brought two counts:

– In Count One, the school corporation contends that the acts of Ann Geyman constituted Conversion and Theft because Ann Geyman, “without authority, exercised possession and control over assets of the School in the form of these funds.

“Pursuant to Indiana Code 34-43-4-2 and 4, such action constitutes conversion and theft by Geyman to which the school is entitled to treble damages and attorney’s fees and costs….”

– In Count Two, the school sought a “Temporary and Permanent Restraining Order”; alleging that “The likelihood of succeeding on the merits of this claim against Geyman by the School are high;

“Unless further transactions in the account of Geyman held by the Bank are denied, the School will have no adequate remedy to retrieve such funds;

“The School Corporation will suffer irrevocable harm unless the Court order the Bank to refuse any further transactions in the account unless otherwise ordered by this Court.”

In another case filed by the school corporation, the schools requested a “Preliminary Injunction/Temporary Restraining Order” against Ann Geyman.

The injunction effectively freezes any and all bank accounts or pieces of capital owned singularly or jointly by Ann Geyman. This includes freezing any bank savings or checking accounts until a hearing is held in Jefferson Circuit Court today (Thursday) at 1:30 p.m.

This injunction was supported by an “Affidavit of Ronald J. Hocker in Support of Temporary Restraining Order”.

In this affidavit, Ron Hocker told the court that he is employed as counsel for the Switzerland County School Corporation:

“In such capacity I have been advised by the State Board of Accounts that funds of the Switzerland County School Corporation have been converted by the Treasurer of the School, Ann Geyman.

“I am aware of one or more accounts in the name of Ann Geyman with the MainSource Bank.

“I believe there is a likelihood that all funds deposited in such accounts by Ann Geyman, may be secreted, disposed of, or concealed, unless this Court directs the Bank to deny any transactions in such account without further order from this Court.”

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It is important to note that MainSource Bank is named in the suits purely because it is the bank where school funds are held. There is no suspicion whatsoever that the bank is involved in the situation; and MainSource staff has been working to help auditors and provide financial records needed for the investigation to continue.

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So what happens next?

Everyone now waits on the final report of the auditors from the State Board of Accounts, when the actual dollar amount that is missing is given. From there, civil and criminal charges may follow.

The school corporation has a $100,000 bond on Ann Geyman; so some of the funds may be retrieved through the bonds. School officials are looking into whether or not claims can be made against the bond for each year where discrepancies are found, but no answer to that question has been considered until an exact amount is determined.

The school does not have the power to file criminal charges, so the civil actions taken last Thursday were all that could be done at the time; and the Indiana State Police has confirmed that the school corporation has asked it to begin a criminal investigation.

Investigators believe that they have determined the methods to how the funds were diverted without being detected, but will not provide that information until the investigation is completed.

Ann Geyman was hired as the corporation treasurer in January of 2003, and the school corporation underwent its regular two year audit by the State Board of Accounts in 2005.

Superintendent Tracy Caddell said that the 2005 audit found some “undocumented fund transfers”, but the auditors believed at that time that those were simply mistakes because Ann Geyman was new to keeping school records after years in the corporate world.

There has been no official confirmation as to when the fund discrepancies may have begun; but the court documents state that the school corporation feels that inaccuracies go back to at least 2005.

The school corporation is also not in financial trouble.

It has been confirmed that the balances shown to the school board and school officials as part of the fund report at monthly school board meetings is accurate; and all bills have been paid.

Prior to coming to the Switzerland County School Corporation, Ann Geyman was the comptroller for Jim Hadley Chevrolet in Madison.

A resident of Madison, Ann Geyman has been very active with Madison Regatta, Inc., for many years, and has served many community and business organizations there.