$549 steakhouse lunch, years of unpaid booster club taxes among financial issues uncovered in NEISD audits

A $549 lunch at an upscale steakhouse that left a high school account in the red and a booster club with years of unpaid taxes are among the financial missteps uncovered by audits of the North East Independent School District.

Records obtained by KSAT Investigates reveal a series of financial and bookkeeping issues at two high schools and within the district’s library services department.

The findings, which were made available to NEISD’s Board of Trustees earlier this year, include a parent-run booster club that spent more than double its proposed budget, missing financial documentation, money that went weeks without being deposited and thousands of dollars in food and drink purchases that exceeded district spending limits.

The release of the audits comes as NEISD grapples with a general fund deficit that hovered around $19 million this fall.

District trustees received an update from NEISD’s internal audit department during an August board meeting, but few details about the reviews completed this year were discussed publicly.

KSAT Investigates requested copies of the audits to take a closer look at how money was being handled across San Antonio’s second-largest school district.

District officials declined to release an audit done on Johnson High School’s former band director and have asked the Texas Attorney General to allow them to withhold those records.

Three of the completed audits released to KSAT stood out.

$549 steakhouse lunch puts school account in the red

An audit of MacArthur High School revealed that a culinary arts field trip to Ruth’s Chris Steak House resulted in a $549.48 lunch bill for four students and their teacher.

According to the audit, the group was served an assortment of upscale entrees, including lamb chops, ribeye steak, New York strip steak, filet mignon with blackened scallops and a filet mignon steak.

The meal was charged to the school’s culinary arts account, which did not have enough money to cover the expense, records show.

Auditors found the transaction caused the account to have a negative balance because of insufficient fundraising and available funds.

Aubrey Chancellor, NEISD’s executive director of communications, told KSAT Investigates that the instructor was a first-year teacher who was unfamiliar with the district’s rules.

Chancellor said the teacher has since reimbursed the cost of the meal.

“They spent hours at the restaurant. They were looking at food preparation in the back. Operations in the front,” Chancellor said. “The difference here is that a meal was had and that shouldn’t have taken place.”

The steakhouse lunch was not the only financial issue uncovered at MacArthur.

Auditors also found that some money collected at the campus went weeks before being deposited.

Additionally, 87% of fundraisers reviewed had compliance issues, including missing documentation showing the fundraising activities had received prior approval.

Madison High School booster club owed four years of back taxes

At Madison High School, an audit of the school’s Future Farmers of America (FFA) booster club revealed significant bookkeeping problems, missing financial records and years of unpaid sales taxes.

The review began after the director of Madison’s Agriscience Magnet Program requested an audit of the parent-run organization. A parent had also filed a complaint.

But auditors encountered an obstacle before they could complete their work, records show.

According to the review, the booster club’s former treasurer refused to turn over financial documentation from the previous school year, delaying the audit by more than two months.

Once auditors were able to examine the club’s finances, they identified multiple problems.

The booster club had developed a proposed budget for the 2024-2025 school year, but auditors found no evidence that members had ever voted on or approved it.

The club spent more than twice the amount outlined in the proposed budget, according to records.

Auditors also discovered that the organization was not in good standing with the Texas Comptroller’s Office and owed four years of back sales taxes.

The $2,700 delinquency was paid in early March, according to the audit.

The review also raised questions about the reliability of the booster club’s financial records.

Of six treasurer’s reports examined, only one could be accurately reconciled.

Auditors noted missing deposit records, receipt books and revenue reports, making it difficult to fully account for the club’s financial activity.

Chancellor characterized the findings as problems with recordkeeping and cooperation.

“Bad bookkeeping, sloppy paperwork. Somebody who didn’t want to cooperate once they left,” Chancellor said.

The booster club is a parent-run organization, separate from the district’s general operating budget.

Library services department exceeded food spending limit

A third audit examined purchasing practices within NEISD’s library services department.

Auditors found that 55% of purchasing card transactions reviewed had one or more compliance issues.

The review also revealed that the department spent approximately $2,200 on food and drinks for day-to-day use during the school year.

That amount far exceeded the $315 annual spending limit identified in the audit.

The food and beverage purchases were nearly seven times the amount allotted for the department, records show.

Findings come amid $19 million deficit

The audits highlight financial concerns at a time when NEISD is facing budget challenges.

The district was operating with a $19 million general fund deficit this fall, placing additional scrutiny on how school funds are managed.

KSAT Investigates asked Chancellor whether the district’s financial situation makes questionable spending even more concerning.

“I would agree with that,” Chancellor said. “I would also say it’s always important, regardless of deficit or not, to make sure that every dollar is being spent efficiently.”

Chancellor also pointed out that NEISD is among the roughly 5% of school districts that have their own internal audit department.

Northside Independent School District, the area’s largest school district, also has an internal audit department but acknowledged that multiple positions remain on hold as it searches for a new audit director.

Northside ISD’s previous audit director retired in 2023.