A couple bucks here, a few dollars there — it all adds up to about $49 million in losses for local educational agencies, according to a report released by KEV Group, a provider of K-12 school finance management solutions.
The K-12 Fraud Report: Inside the School Finance Blind Spot Costing Districts Millions, published in January, details a gap in structural oversight in how school-level funds are managed and monitored that is largely overlooked, according to the group’s Chairman and CEO Bram Belzberg.
Of 93 publicly reported and verified K-12 fraud cases that occurred between 2024 and 2025, 97 percent involved internal staff or volunteers operating “in environments where financial controls, standardized processes, and real-time visibility are limited or inconsistent, often without dedicated school finance systems in place,” the report states.
Sixty-eight percent of these incidents occur at the individual school level — twice the rate seen at district offices.
“These school fraud cases point to a structural issue, not just isolated bad actors,” Belzberg said in a statement. “When school-level funds are managed outside purpose-built school finance systems, districts lose real-time visibility into how money is collected and used — increasing risk for schools, staff, and the communities they serve.”
Key findings show that while cash remains the most common form of school-level fraud — with 62 percent of reported cases involving skimming from activity fees, fundraisers or ticket sales before records are created — digital payment fraud from staff setting up personal accounts on peer-to-peer payment apps (e.g. Venmo, PayPal, etc.) drives the largest losses. These account for 77 percent of total dollar losses despite representing just 10 percent of incidents.
About half of cases involved individuals closest to school funds, such as bookkeepers and principals.
While many LEAs have strong financial controls at the central office, there is often limited oversight at the school level, where millions in student activity funds move daily, the report concluded. This lack of visibility creates hidden risks that erode financial resources already stretched thin, accountability and community trust.
“Fraud isn’t just a financial problem — it directly affects student outcomes,” according to the report. “Every dollar counts, and every lost dollar means fewer opportunities and programs cut short.”
The report includes:
- Insights into the pressures and process gaps that create district-wide risk
- A framework for implementing school-level financial controls that reduce risk
- Actionable strategies for superintendents, chief financial officers and K-12 finance teams
