Financial
records from a high school basketball tournament that once bore the name of Springfield
School District 186 board member Adam Lopez are such a mess that auditors can’t
determine whether money is missing.
Among myriad financial issues, money from ticket sales wasn’t
properly accounted for, auditors hired by the district found in a report
released late Thursday.
“We
were informed through the interview process that the cash box was taken home by
Adam Lopez each evening without counting and recording its contents,” auditors
reported in a report disclosed after a records request from Illinois Times made under the state
Freedom of Information Act. “The district policy is to have the cash box locked
in the school safe at the end of the evening and staff was made available to
perform this task. This was not done.”
Lopez
now sits in the Sangamon County Jail on unrelated charges, accused of theft, financial exploitation of the elderly
and financial exploitation of a disabled person. The charges stem from accusations he stole money from people, including relatives, who entrusted him with money that was supposed to be invested. If convicted as charged, he
faces between six and 30 years in prison, with no chance of probation.
Prosecutors say that Lopez, a former financial planner, has stolen as much as
$1 million. Country Financial, Lopez’s former
employer, fired him last fall, after he fell under criminal investigation. Even
from a jail cell, Lopez remains a school board member. Daniel Noll, Lopez’
lawyer, declined comment.
After
Lopez’s arrest last fall, the district ordered an audit to determine whether
money was missing from transactions associated with the Adam Lopez Country
Financial Thanksgiving Tournament, a high school basketball jamboree that drew
teams from throughout the state. The tournament began in 2015 and dropped the
Lopez name last year, after Frank Vala, a local businessman, questioned the propriety
of a school board member sponsoring a tournament involving district facilities.
Illinois Times subsequently uncovered shaky financial problems, several confirmed by auditors from Eck, Schafer and Punke,
the firm retained by the district last year and paid more than $26,000.
The
audit released late Thursday in response to a Freedom of Information Act request
from the newspaper confirmed multiple problems in addition to Lopez taking cash
boxes home. In 2015, auditors found, payments totaling $1,725 from tournament
sponsors were not recorded or deposited in the district’s tournament account.
In 2016, gate receipts of $8,800 didn’t make it into the tournament account.
Instead, Lopez wrote a check for $8,100, with no written explanation as why the
check was for $700 less than gate receipts. Invoices were missing in 30 of 117
transactions recorded in the tournament account. In 29 instances, authorization
forms and checks were signed by the same person. In three cases, checks were
signed by one person instead of two, as required by district rules.
Auditors
didn’t review all records because they weren’t available. For instance, the
district provided auditors with records of just two of 18 ticketed events,
according to the audit report. Daily deposits of monies weren’t made. Instead,
gate receipts were deposited long after the tournament ended, and deposits from
Lopez or Justin Chance, an office assistant for Lopez, came in checks written
in large, round amounts. Just how much money was involved, or how many tickets
were sold, couldn’t be determined.
“We…attempted
to estimate a reasonable amount of gate revenue by calculating attendance for
each year,” auditors wrote. “We interviewed personnel associated with the
tournament, however, they were unable to produce reasonable attendance counts. Without additional supporting documentation,
we are unable to verify the accuracy of total ticket sales for each year.”
In
2015, auditors reported, Lopez was supposed to pay $15,000 to put his name on
the tournament. Lopez wrote two checks totaling $10,000, auditors found, but
the money never was deposited into the district’s activity fund. The audit
report doesn’t specify where the $10,000 was deposited. In 2016, three deposits
totaling $20,000 were deposited into the activity fund, including a $12,000
deposit from Chance that were recorded as gate receipts. “There was no
additional supporting documentation to verify the source of these deposits or
if they were for payment of the 2015 title sponsorship,” auditors reported.
On
paper, at least, the tournament over the course of three years was slightly in
the black, auditors found. But auditors wrote that they couldn’t account for
all funds. “(G)ate receipts were deposited weeks or even months after the
tournament ended and the deposits were in large, round numbers from checks written
from the personal or business accounts of either Adam Lopez or Justin Chance,”
auditors wrote. “Due to the lack of internal controls over the gate receipts,
the calculation of possible missing funds from the gate sales was not
determinable. We were informed through the interview process about a missing
cash box during the 2017 tournament. The missing cash box was not reported to
the district in a timely fashion and therefore any amount missing is not
determinable.”
Payments
to members of a committee involved with organizing the tournament also were
murky, according to auditors who found that eight people received $19,400. “We
were informed… that some committee members were paid in cash or by check for
each year the member served on the committee,” auditors wrote. “These payments
were not made by the district, and no documentation of these payments were
found in the district activity funds. They were not recorded as an expense of
the tournament. We confirmed the amounts received directly with the committee
members. … We were not able to confirm if these amounts were paid from
tournament funds or the personal funds of Adam Lopez.”
Auditors
concluded that accounting controls “were inadequate in several instances.”
Disbursements were made contrary to district policy, and cash and “other
payments” were made to tournament committee members without documentation or
proper reporting.
“Our
work concluded that the Adam Lopez Country Financial Thanksgiving Tournament
had a lack of district oversight and inadequate procedures over multiple
accounting processes,” auditors wrote. “(I)t is not possible to determine the
volume and extent of transactions and funds that were not recorded. As such, we
cannot conclude if there was any misappropriation of assets and an opportunity
lost to the district from additional
tournament activity.”
On
the plus side, auditors noted, what records were available showed a surplus of
$773 over three years. The district also got a sign for Lanphier High School
from tournament backers, and student organizations benefited from concession
sales. But signs bearing the names of Lopez and Country, his employer, that
were installed at Lanphier in the course of the tournaments have been removed, according to
the district.
There
have been personnel changes since controversy over the tournament
erupted. In an email, Julie Hammers, school board secretary, wrote that
Lanphier athletic secretary Madonna Larrea has been replaced by Lori Small and
Lanphier athletic director Brian Caton has been replaced by Cody Trigger. Former
tournament bookkeeper Kathy Moreland has been replaced by Sharon Burtle, Hammers
wrote, and the district has rewritten procedures that tournament organizers
must follow. In addition, Hammers pointed out, Lopez’ name has been removed
from the tournament, which was called the Abe’s Roundball Classic Basketball
Tournament when it was held last November at Lincoln Land Community College
instead of Lanphier High School.
Last
August, Lopez called for an audit during a school board meeting, saying any
criticism had “no basis in fact” and was politically motivated. “If it is found
that the district has lost any money on tournaments, I pledge to pay that
amount to the district plus the cost of the audit,” Lopez told his colleagues,
reading from a written statement. School board president Mike Zimmers thanked
Lopez for his statement and for “clarifying some things.”
“I
think that all of the information that we can possibly give to the parties that
have had some concerns about this has been given to them,” Zimmers said last
August. “It’s time to move on.”
Two months later, Lopez was fired from his job as a financial adviser
after a relative reported that he’d taken more than $600,000 that was supposed
to have been invested but had disappeared. The district last October commissioned a
forensic audit. Lopez remains a school board member but unable to attend meetings, given he’s in jail. His term expires next month.
Contact Bruce
Rushton at brushton@illinoistimes.com.
This article appears in Mar 21-27, 2019.
