Nearly All Boston Public Schools Mismanaged Student Activity Funds, Audit Finds

An audit found that nearly all Boston public schools used student activity funds for unrelated costs and lost account records related to spending, the mayor's office said in a statement Friday.

The audit, conducted by Ernst & Young, was ordered by the city after the Internal Revenue Service last year raised concerns following a review of student activity accounts at 16 randomly chosen schools in Boston.

The independent audit found the funds, which are designated for student activities such as student clubs, field trips, proms and other special events, were mismanaged or not properly recorded over the past five years at close to 118 schools in the district. Charter schools in the district were not reviewed.

The school system says it plans to make a number of procedural changes, including ordering the schools to use the city's internal financial system for the accounts, pending approval from the Boston School Committee at a Sept. 12 meeting.

"Trust, transparency and being fiscally responsible for the residents of Boston is what drives our priorities, and this in-depth review has allowed for the creation of substantial and comprehensive new policies and procedures," Mayor Marty Walsh said in the statement.

Walsh also said the audit is the first-ever review of the accounts, which were created in the early 1990s.