Pre-School Fraud: Changing the Diapers

Pre-schools, which often receive state dollars, can be breeding grounds for fraud and abuse. Absentee owners, cash payments, employee access to funds, salaried remuneration, and a lack of supplier and vendor controls are common pre-school risk factors. Here are practical ways to deter these conditions that can be applicable to any situation.

The owner of a pre-school (we’ll call her Eva) was shopping for supplies in a local supermarket and saw the school’s director relaxing in the local coffee shop when the director was supposed to be at work.¹ The school’s managers were allowed to take breaks, but the state regulations on staff-child ratios were quite strict. An absent manager in a department store isn’t an emergency, but in a pre-school it normally is a rules violation. Eva immediately called the school and was told that the director (we’ll call her Sally) had called in additional staff to cover her absence so Eva dismissed her concerns. She shouldn’t have.