A report from the State Financial Officers Foundation and Open the Books alleges nearly 90 fraud schemes have diverted roughly $225 million from U.S. schools since 2019.
By yourNEWS Media Newsroom
A new report alleges that nearly 90 fraud schemes involving roughly $225 million have been uncovered across American schools since 2019, with cases ranging from fake invoices and inflated enrollment figures to bid-rigging, kickbacks and embezzlement.
The findings come from a report by the State Financial Officers Foundation and Open the Books, according to the Daily Caller News Foundation.
Fraud in Schools Report by yourNEWS Media
The organizations reviewed the U.S. Department of Education Office of Inspector General’s semiannual reports to Congress from 2019 through 2026 and found alleged fraud cases in 24 states and Puerto Rico.
“All fraud is harmful, but defrauding education dollars meant to help kids learn and succeed is especially hideous. The findings in this report should alarm every family, teacher, and civic leader, especially since they only scratch the surface of the problem,” SFOF CEO OJ Oleka said in a statement.
The report says the alleged schemes involved school districts embezzling funds, creating fraudulent invoices and pocketing the money, misrepresenting student enrollment numbers to receive more aid, rigging bids and taking kickbacks.
One of the largest cases cited in the report involved Indiana schools, which allegedly received $44 million more in state funding than they should have after inflating enrollment numbers between 2016 and 2018.
The report said Indiana Virtual School and Indiana Virtual Pathways Academy were tied to alleged fraud schemes involving four people within the educational institution, including the founders, a school director, superintendents and an operations manager.
The four allegedly directed millions of dollars to fraudulent companies controlled by the founder and fired an employee who attempted to alert the state education department about the fraud. The schools closed in 2019, and the four were charged by the Department of Justice in 2024, according to a department press release.
John Hart, CEO of Open the Books, said the cases directly affect students because money lost to fraud is money unavailable for classrooms.
“These schemes within public schools arguably hit us where it hits more: America’s future leaders. Every dollar wasted on fraud never makes it to the classroom where its urgently needed. Student outcomes will continue to suffer until we clean up both fraud and administrative overhead. In one instance, the per-student fraud rate was enough to fund a semester at a charter school,” Hart said in a statement.
In Florida, the report cited a Broward County case involving Public Schools Information Officer Anthony Hunter, who allegedly steered $17 million in taxpayer funds to a friend’s business without using the required bidding process and personally benefited from the funds.
From 2015 to 2019, Hunter allegedly directed the money to Georgia resident David Allen and his company, Education Consultants Inc. A statewide grand jury indicted Hunter in 2021 for allegedly bypassing bidding rules for school equipment and awarding business to his friend.
A judge dismissed the indictment in 2024, finding that the statewide grand jury lacked jurisdiction because the alleged crimes occurred only in Broward County, Florida, according to the report.
Nicole Neily, president of Defending Education, said the findings point to the need for enforcement and accountability rather than additional education funding.
“This report is a good reminder that America doesn’t necessarily need more laws-we need to enforce the existing laws on the books. Every dollar siphoned out of the education system by self-interested grifters is a dollar that’s not furthering a child’s education at a time when student achievement and proficiency are at a frightenedly low point. We don’t need more money in education- we need more accountability so that finite funds get into classrooms,” Neily said in a statement.
The report also cited an alleged $6 million fraud scheme involving the Houston Independent School District in Texas. The case centered on school district construction and ground maintenance contracts allegedly awarded in exchange for cash bribes and hundreds of thousands of dollars in home remodeling.
Former Houston Independent School District Chief Operating Officer Brain Busby and contractor Anthony Hutchinson were indicted by the Department of Justice, along with five other school officials who pleaded guilty to conspiracy charges. According to the SFOF and Open the Books report, the five individuals conspired with Busby and Hutchinson by accepting bribes.
Busby and Hutchinson allegedly tried to interfere with the federal criminal investigation after learning it was underway. Authorities searched their homes in 2020 and found $186,000 in cash to be forfeited.
Houston Independent School District Superintendent Mike Miles said the district has focused on reducing waste.
“Since June 2023, we have made it a priority to eliminate waste and most importantly, now every decision we make is focused on closing student achievement gaps, preparing students for the future, and supporting teachers,” Miles said in a statement.
In West Virginia, the report said former Boone County Schools maintenance director Michael David Baker pleaded guilty in 2025 to defrauding the school district of $3.4 million, amounting to more than $1,000 per student.
The report said Baker used the money for personal vehicles, equipment and home improvements. He falsified documents to make it appear that the school district was receiving large amounts of hand soap, trash can liners and face masks from Rush Enterprises, according to an Office of Inspector General report.
Prosecutors alleged that after Rush Enterprises received payment, the owner wrote checks to Baker so he could receive a share of the proceeds. Eighty percent of the ordered products were never delivered between November 2019 and December 2023, according to the report.
Alleigh Marre, executive director of the American Parents Coalition, said the findings add to parents’ concerns about how schools use public money.
“But between teacher unions and activists infiltrating the classrooms to push activism, and misuse of funding for schools, parents are right to be skeptical of their school systems,” Marre said in a statement.
“With more than $230 million in taxpayer dollars being squandered for frivolous items outside of curriculum and resources, students are losing out on important chances to learn core competences like reading, math, science, and opportunities for critical thinking,” Marre’s statement added.
The report noted that only three of the 20 largest school districts were included among the cases, while dozens of smaller districts appeared in the findings.
The organizations framed the alleged fraud as especially harmful during a broader affordability crisis. According to the report, roughly one in three low-income families spend 95% of their income meeting basic needs, making each dollar diverted from education a lost opportunity to improve a child’s schooling.
The findings add to calls from watchdog groups and education advocates for tighter oversight of school spending, stronger enforcement of existing fraud laws and greater transparency in how taxpayer-funded education dollars are used.
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