- November 23, 2024
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Flagler Schools has received $50,000 in insurance money for the $719,583 it lost in a fraudulent electronic money transfer last fall.
The insurance money, in addition to the $19,700 that was reimbursed by JPMorgan through the Flagler County Sheriff’s Office early this year, is all the district will be recovering from the phishing scheme — almost 10% of what was lost — Flagler Schools Chief Financial Officer Patty Wormeck told the School Board at a Sept. 3 workshop.
District staff last year believed it was making a payment to H.A. Contracting Corp., the contractor for the Matanzas High School expansion project.
Superintendent LaShakia Moore said no disciplinary action was taken against any staff members because proper procedures were followed at the time. Since then procedures have been upgraded and new cyber security and training have been put in place, she said.
With the upgrades, If employees open an email that appears to be a phishing scheme, they will automatically be instructed on their device what to do next.
“We may never catch it all, but we have good systems in place,” Moore said.
Wormeck said multiple employees are now involved in each transaction before a button is pushed to send payments to the bank every two weeks, so there are now multiple layers of security in place. The bank has provided training to the finance staff, she said.
“There are so many of these fraud incidents that change daily, weekly, that it’s very imperative we continue to get information from them who are the key people who see this every day,” Wormeck said.
Wormeck said the district has also reached out to CFOs in other districts to compare procedures.
Moore said the district has no other recourse to recover more of the money. The contractor did not have cyber coverage and there was no breach detected on either the district’s side or the contractor’s side.
“We worked with the Sheriff’s Office and we had an internal investigation to see if there were any breaches in our protocols and what procedures we could improve. There was not an individual who went against the procedures we had at that time,” Moore said.
Moore said three other Florida school districts were victims of the same phishing scheme during the same week.
“We’re working with other districts to make sure we have the strongest procedures as technology changes,” she said.
The theft came out of the district’s capital fund and was within the fund's contingency numbers, the district previously reported.
Board Chair Will Furry asked Moore if the district is under-insured considering the insurance company paid just $50,000. Moore said the district’s new counsel can look into that.
Board member Sally Hunt asked if any other legal action can be taken by the district against the contractor. Moore said the School Board’s former attorney had investigated that and concluded there was no breach on the contractor’s side but added that interim board attorney David Delaney can review it.
Wormeck, however, did have some positive financial news. She said the district finalized the refinancing of its 2014 Certificates of Participation debt and the district's financial advisors were able to price the market better than they anticipated, giving Flagler Schools a net present value debt savings of $699,000, which is a direct savings on the capital fund.
“There’s your 700,000,” board member Cheryl Massaro said.
“Well, you found it somewhere,” Furry said. "That's great news."
