Kalispell schools evaluating money-handling procedures

Kalispell Public Schools are re-evaluating money-handling procedures after a former employee's recent confession to embezzling money from student activity funds.

Cindy Upwall, formerly the Glacier High School activities bookkeeper, told district officials she took $17,500 over a period of several years, Superintendent Darlene Schottle said.

Before Glacier opened, Upwall was Flathead High School's activities bookkeeper, a position she held for six years.

Most of the stolen money came from cash funds, including gate receipts, Schottle said.

There isn't always a one-to-one correlation between ticket revenue and the number of people present at an event, she said. With season and family passes and student discounts, matching crowd numbers to the cash total at the end of the night isn't a cut-and-dried process.

Individual schools are responsible for those accounts, as well as numerous other activity accounts. Each year, schools send in their individual accounting reports, which are included in the district's annual external audit.

"We have certainly had discussions with our administrators … about how to double-check those procedures to make sure this doesn't happen again," Schottle said Thursday.

District officials discovered "some kind of abnormality" several weeks ago after a new employee who worked with Upwall noticed some undeposited checks, Schottle said. The district decided to investigate to ensure that the employees handling that money were performing their jobs adequately.

"Our original level of concern was work quality," she said. "It was procedural, not necessarily that we thought there was money missing."

The district told Upwall she would be placed on paid leave during the audit. Instead, Upwall resigned.

"At the time that she resigned, we did not have evidence that there had been wrongdoing," Schottle said. "One of our primary concerns was to not have her in a position of authority while undergoing the investigation. We knew there were inconsistencies, but at that point we didn't know what that entailed."

The district performed its own internal central audit and hired an independent auditor. When both investigations were complete, district officials believed about $15,000 was unaccounted for.

When they confronted Upwall, she confessed to taking $17,500.

Upwall was very cooperative and agreed to repay that amount, Schottle said.

School district officials consulted the district's attorney, Jeff Hindoien, and Flathead County Attorney Ed Corrigan on how best to proceed. Both attorneys advised district officials they probably didn't have enough evidence to convict Upwall if they pursued embezzlement charges, school board Chairman Brad Walterskirchen said.

"It wasn't a snap decision," he said. "You just gather up as many facts as you possibly can, then you make a decision and you go with it."

With the board's backing, Schottle agreed not to pursue criminal charges - a decision that has outraged many people in the community.

"It's challenging. We believe what's in the best interest is trying to balance consequences and the return of the funds," Schottle said. "We decided that the return of the funds was most important."

The perception that the district condones Upwall's behavior or does not believe Upwall should face consequences for her actions is not true, Schottle said.

"We want to protect our students' activity funds," she said. "But we also know the county attorney reserves the right to move forward with the investigation."

"Believe me," she added, "we don't think that it was right she took the money."

The Kalispell Police Department launched an investigation into the case on Thursday. If the investigation yields charges and she is convicted, Upwall could face up to 10 years in prison and a maximum $50,000 fine.

Walterskirchen, who worked in finance and banking for more than 30 years, said that in his experience, pursuing charges is no guarantee an embezzler will serve time or even make full restitution.

In many seminars he has attended, "they tell you, you can go ahead and prosecute, but even if you can get a conviction, nobody ever goes to jail," he said. "It's a nonviolent crime. … With a white-collar crime, what they get is typically a probation and have to make restitution."

Even if that person makes faithful payments, if the entire sum hasn't been repaid by the end of the designated period, the balance usually is forgiven, Walterskirchen added.

"It's a lose, lose, lose, lose deal," he said. "That has been my personal experience."

He said his experience, however, did not factor into the district's decision not to pursue charges.

"We were relying on our attorney telling us what our options were and relying on the county attorney telling us what our options were with that," he said. "Then our superintendent made the decision and we backed it.

"I think it's the right decision, and if I had been in her shoes, I probably would have made the same call. Best-case scenario: OK, convict them. But they're never going to pay.

"Here, we're going to get all our money. We feel really comfortable about that."

Upwall and the district have a written agreement that she will make full restitution by July 1, Schottle said - a process she already has begun. Schottle said she did not know how much money Upwall has repaid so far.

Reporter Kristi Albertson may be reached at 758-4438 or by e-mail at kalbertson@dailyinterlake.com