Two Indiana school districts were the alleged victims of former CFO Scott Bumgardner, who was charged for multiple felony accounts last week. According to the Indiana State Police and Indiana State Board of Accounts, Bumgardner allegedly misappropriated close to half a million dollars from Marion Community Schools and Huntington County from 2018 to 2023.
In total, Bumgardner has been arrested on 21 felony charges: one for corrupt business influence, and 20 for counts of theft. While acting as business manager for Huntington County Community School Corporation (HCCSC) from 2018 to 2022, investigators revealed misappropriation in the amount of $462,350.
Then in 2023, from August to October, Bumgardner allegedly misappropriated $26,728.65 though a corporate credit card while acting as CFO for another district, Marion Community Schools. He held his CFO position at Marion Community School district for less than 90 days, with some of that time being spent on administrative leave due to the investigation against him.
Police allege only $703 of the $26,728.65 was spent on legitimate Marion school purposes. According to court records, WPTA reported, the remainder was used toward gambling and alcohol addictions.
Misappropriation, Embezzlement
Following the Marion investigation, police further examined his history at HCCSC. Bumgardner allegedly misappropriated the school funds by way of Visa gift cards. From 2018 to 2022, he purchased more than 600 cards, with the amount from all the cards totaling $462,350, WPTA reported.
- 300 gift cards with a value of $1,000
- 104 gift cards with a value of $800
- 5 gift cards with a value of $600
- 107 gift cards with a value of $500
- 40 gift cards with a value of $300
- 13 gift cards with a value of $250
- 25 gift cards with a value of $200
- 24 gift cards with a value of $100
According to the investigation, 35 of 618 gift cards were dispersed to school staff and construction workers as bonuses, for a total amount of $7,400, leaving $454,950 worth of gift cards in Bumgardner’s possession.
Investigators also say they have evidence that shows from 2021-2023, Bumgardner withdrew over $50,000 of cash at a local casino, where he earned winnings of over $80,000 within the same time period. Because he played without a player’s card, thus making his losses and money spent on gambling anonymous, those figures are unknown.
Financial Controls Failure
Bumgardner spent most of his career working in the Indiana public school system. He does not appear to have education or training in accounting or finance, though his LinkedIn profile is sparse.
In addition to an attempt to recover the remaining misappropriated funds, district officials indicated a review of internal financial controls is underway. HCCSC, in addition to stating it is committed to “responsible financial stewardship,” said in a statement:
“HCCSC has already conducted a thorough assessment of our internal financial controls to identify and rectify the weaknesses that allowed Mr. Bumgardner to misuse HCCSC funds as detailed in the report. HCCSC has already implemented additional safeguards and stricter oversight procedures to prevent any incidents in the future.”
Of note, HCCSC apparently had no oversight of Bumgardner’s purchase of the gift cards, nor visibility in his accessing the credit union bank account, nor did they have any control over the cards once purchased to ensure they would be specifically used for school purposes. There was no apparent reconciliation over bank records and school-related balance sheet assets, which potentially allowed Bumgardner to embezzle nearly half a million dollars from the school accounts without any transactional record.
Documents also note the methods Bumgardner allegedly used to move money while at Marion made it so a negative balance would never appear in the district’s financial records and would’ve been unnoticeable without an “in-depth investigation.”