School board says most of stolen money paid back

In a case that began with seven years of embezzlement, the St. Regis School District is beginning to see the light at the end of the tunnel.

At last Wednesday's school board meeting, Shelly Dunlap, board chair, announced that nearly all of the over one-half of a million dollars that former clerk Julie Downing embezzled from the school had been paid back.

Downing paid back almost $110,000 herself through selling property and relinquishing assets, and the rest of the nearly $590,000 has been paid by Western States Insurance.

"We've basically been fully reimbursed," Dunlap said.

Wednesday, the school board began to divide the money into different parts. The final decision was to set up funds for student programs, staff improvement and programs, building improvement, and savings and banking.

The board also decided to bring the school's reserve funds as high as legally possible with some of the money.

"One of our priorities is to provide some tax relief," Dunlap said.

Dunlap said that the school board plans to use some of this money to let up a few of the taxes that have been levied on local families.

"I want to make sure that the public knows that we want to provide some tax relief," Dunlap said.

The school board plans to take the portion set aside for building improvements, approximately $128,000, and add to that an additional $93,000 from one time only funds for weatherization and maintenance. Dunlap said that with over $221,000 in this fund, the board feels it would be unlikely that they would need to renew the building reserve levy.

"The people of this community have been very generous in voting to approve these types of levies," Dunlap said. " We want to thank them for their support and provide them relief."

Some of the funds will also go to provide restitution to employees of the school during the time of the embezzlement. Any employee of the school between 1999 and 2006, whether or not they still work for the school, will be eligible for some amount of restitution, depending on how long they were employed.

Downing is serving a five-year prison sentence for her crime. During the seven years she was embezzling funds from the school, Downing managed to take $1,500 every week.

Officials first realized that Downing was taking money from the school in 2006 when St. Regis School Superintendent Becky Aaring was finishing up some paperwork and found some financial problems that she could not explain.

The school district hired Denning, Downey and Associates, a Kalispell accounting firm, to examine the improprieties. Downing was found out and fired that fall.

According to court documents, between July 1999 and June 2006, Downing submitted claims for expense reimbursement, which she was not entitled to, totaling $11,397.65. She had the school pay her $3,802.81. During this time, Downing also used the district funds to pay $493,571.20 for seven personal credit cards. She also had the school pay $5,971.49 for fraudulent invoices for reimbursement to herself from the District's Self Insurance Trust account

While the money that Downing took has been returned, some teachers feel that this is only begins to heal the damage done by Downing's dishonesty.

"You can't make a perfect situation out of something like that," school board member Ken Jasper said. "We're just trying to make everybody feel a little bit better."