SOUTH BEND, Ind. -- The South Bend Community School Corporation has released a statement following the March 16 release of the State Board of Accounts' 2022-23 audit.

The findings included in part:

• The School Breakfast Program expenditures were understated by $2,979,484 as of June 30, 2023.
• The National School Lunch Program expenditures were understated by $7,948,337 as of June 30, 2023.
• Multiple grants had individual errors that resulted in total overstatements of expenditures of $1,118,400 and total understatements of expenditures of $6,815,098.

These issues were said to be due to the lack of effective internal controls.

Other errors mentioned include incorrect program names, Assistance Listings Numbers, and identifying numbers.

Official statement of the South Bend Community School Corporation regarding 2022–23 state audit:

"The audit reflects financial activity and internal control practices during the period July 1, 2022 through June 30, 2023. It is important to emphasize that the findings referenced in recent media coverage relate to this prior operational period and do not reflect the systems, procedures, and oversight measures currently in place within the Corporation.

The audit identified concerns related to inadequate internal controls and lack of compliance with statutory requirements for certain contracts during that time period. The Corporation acknowledges these findings.

Importantly, well before the issuance of the audit report, the Corporation’s current administration and finance leadership had already begun implementing comprehensive reforms to strengthen financial governance, internal controls, and compliance practices. These actions were undertaken as part of a broader effort to modernize systems, improve accountability, and align operations with best practices.

Those proactive steps include the development and implementation of a comprehensive Internal Control Manual, the establishment of formal procedures requiring legal review of all contracts and agreements, the completion of the first district-wide asset inventory in the Corporation’s history, and the strengthening of financial oversight and compliance practices across departments. These reforms were already underway and directly address the issues identified in the audit.

The audit findings reinforce the importance of these efforts and validate the direction the Corporation has taken to strengthen its financial systems and governance structure.

As a result of improved financial management and stronger operational discipline, the Corporation has been able to make historic investments in its employees, including increasing starting teacher salaries to among the highest in the region, providing significant wage increases for bus drivers, increasing compensation for paraprofessionals and support staff, and implementing improved administrative compensation structures. These outcomes reflect a direct connection between stronger financial oversight and the Corporation’s ability to invest in the people who serve South Bend students.

The South Bend Community School Corporation remains committed to accountability, transparency, and continuous improvement. The Corporation will continue to build on these reforms to ensure long-term financial stability and continued progress for students, staff, and the community."

You can read the full findings in the documents below: