A state audit found a former Tama day care director used the center’s credit card to buy cigarettes, beer, lingerie, toiletries, cellphone accessories and the “50 Shades of Grey” movie, among other improper purchases.
The State Auditor’s Office identified $278,363 of improper and unsupported spending, undeposited collections and forgone grant revenue during a special investigation of Tama County Day Care Inc., doing business as Kids’ Corner, from December 8, 2009, through May 31, 2016.
“The special investigation was requested by the Kids’ Corner Board, in conjunction with the Tama County Sheriff’s Office, as a result of concerns regarding certain credit card purchases by the former Executive Director, Kristine Daniel,” the Auditor’s Office wrote in the report released Thursday.
Daniel, 46 of Grinnell, was arrested Tuesday based on allegations of ongoing criminal conduct and money laundering, felonies punishable by a combined maximum 35 years in prison. The criminal complaints filed Tuesday in Tama County alleges Daniel was buying items with day care resources and then selling them for financial gain.
The $120,700 in improper and unsupported disbursements identified in the investigation included:
• $55,500 of purchases on Kids’ Corner’s credit cards at retailers including Amazon, Walmart and Sam’s Club
• $56,369 in unauthorized payroll and reimbursements issued to or for Daniel
• $5,140 in penalties and interest incurred for non-payment of payroll taxes and
• $3,650 of purchases from various vendors.
The State Auditor found $63,638 in undeposited collections consisting of cash payments from parents for child-care services that were recorded in the day care’s accounting system, but not deposited.
Daniel also was responsible for Kids’ Corner losing out on $94,000 in state grant revenue the center could have received to supplement grocery purchases for meals served to the children, the audit found.
“According to representatives of the Iowa Department of Education, notices sent to Ms. Daniel stating Kids’ Corner’s participation in the program would be terminated if the application was not renewed did not receive a response,” the audit states. “As a result, Kids’ Corner was removed from the program and received no additional payments after October 17, 2014.”
Daniel worked at Kids’ Corner from 2009 to April 29, 2016, when she was fired, the criminal complaint states.
The audit recommends the day care strengthen internal controls and operations by requiring detailed supporting documentation for all spending and designating an independent person to reconcile accounting records with bank statements.
l Comments: (319) 339-3157; erin.jordan@thegazette.com