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Criminal investigations underway after audit of Valentine ISD finances

Nicolas Henderson via Flickr/Creative Commons
A view of Valentine, Texas.

In the tiny town of Valentine, criminal investigations are underway after a recent financial audit of the local school district uncovered more than $165,000 in what were described as unauthorized transactions, including payments that were made to quote “fictitious employees.”

That’s according to the Big Bend Sentinel, which recently reported on the audit being presented at a local school board meeting.

Marfa Public Radio recently caught up with Big Bend Sentinel reporter Mary Cantrell for more on the story.

Interview Highlights

On the troubling findings outlined in the audit

The audit, which covered Valentine Independent School District’s 2021-2022 school year, pointed to a number of concerns with the district’s finances that year.

According to Cantrell, the routine annual audit found “numerous instances of unauthorized transactions.”

Those transactions, everything from altered documents, payments to “fictitious employees” and unauthorized withdrawals of district funds, amounted to $165,000 that “they can’t account for,” she said.

Cantrell said the audit report indicitated the money could potentially be recovered through the district’s insurance coverage, but that school officials aren’t relying on that.

“At this time, they’re acting as if it’s money that they do not have,” she said. “It’s definitely affecting their day-to-day way they see their budget.”

On staffing changes at the district as the audit was underway

According to Cantrell, at the time the school superintendent was notified of the financial discrepancies, the district’s longtime finance director and tax assessor-collector Ernie Villarreal was placed on administrative leave.

“This was in October, he actually ended up resigning in November, and gave no reason for his resignation,” Cantrell said.

On the potential for criminal charges stemming from the audit

The audit’s findings have been handed over to both the Texas Rangers and the FBI, Cantrell said, though neither agency has commented on their investigations.

“It’s unclear where things go from here, but these were taxpayer dollars, and it’s being investigated in a criminal manner,” she said. “It’s definitely possible we could see charges.”

On how the situation is affecting the district

Cantrell said Valentine ISD Superintendent Debbie Engle, the district’s top official, said the district was still waiting to find out more about what happened, but that the situation is already impacting school operations.

“Her quote was, ‘It’s hurting us, it shortchanges the kids,’” Cantrell said.

Valentine ISD had already adopted a deficit budget for this school year because of facility acquisitions and salary increases, Cantrell noted.

“They’re definitely cutting back on extra expenditures, trips, activities for the kids,” she said. “It’s definitely impacting their finances.”

On what happens next

As Cantrell reports, a deeper-dive “forensic audit” of the school district’s finances has already been launched, though it’s not clear if those findings will be publicly released.

“I believe the forensic audit has been received by the district’s lawyers,” Cantrell said. “It is likely that forensic audit would be subpoenaed by the investigators, according to the superintendent.”

Travis Bubenik is All Things Considered Host and Big Bend Reporter at Marfa Public Radio.