North Kansas City Schools audit examines payments for ‘potential fictitious services’

Law enforcement is investigating after the North Kansas City School District discovered hundreds of thousands of dollars in payments for potentially fake consulting services.

A compliance report released after the Feb.

24 board meeting as part of the district’s annual audit says the district discovered procurement requirements weren’t being followed for payments to an IT vendor.

A district IT employee approving invoices for a vendor “had a familial relationship with an executive level employee at this vendor” but didn’t disclose the conflict, according to the compliance report.

The district discovered it had been paying the vendor $9,000 per month since fiscal year 2020 for general consulting services.

A spreadsheet The Beacon obtained in a records request lists 70 such payments from 2019 to 2025 totaling $630,000.

“Upon further review, it is unclear what the nature of these consulting services included, and if these were valid business expenses paid for by the District, or potential fictitious services the District paid for in error from its General Fund,” the compliance report says.

The district learned in September that the vendor “was owned in some capacity by the employee’s brother” and determined that the consulting payments may not have been valid business expenses, according to documents included as part of the audit report.

The district notified law enforcement in early October and said it has provided “unfettered access” to employees and district records, according to audit documents.

The district’s investigation is complete, but the law enforcement investigation is not.

In an email sent to families and shared with The Beacon, Superintendent Rochel Daniels said the issue was discovered when “leadership within the Technology Department identified an ongoing monthly payment to a vendor that abruptly stopped.” The district “took immediate action, terminating the employment of the individual involved,” Daniels said.

“We quickly referred the matter to law enforcement and informed our Board of Education and independent auditors.

We contracted with an expert cybersecurity firm to ensure a smooth and secure transition and confirmed that no personal nor sensitive data was compromised.

In addition, there was no impact to student learning nor our daily operations.” Daniels said the district will lose two points on its 2025-26 Annual Performance Report from the state Department of Elementary and Secondary Education because the discovery delayed the release of its audit, which state statute requires to be submitted by Dec.

The district earned 173 out of 200 possible points on the APR scores released in 2025.

The score deduction “is particularly disappointing and falls far short of expectations,” Daniels wrote, “in contrast with the tireless work of our students and staff who take great pride in how this state report card reflects personal....