Missing money is the latest problem to plague the troubled Easton Area Arts Elementary Charter School.

According to a 14-page fraud audit report given to 69 News by a source, an alleged fraudulent 1099 tax form from 2018 was issued to subcontractor PenTeleData, the schools internet and communications provider for more than $570,000 about 10% of the school's revenue for 2018.

The report states the fraud examiner contacted the company and was told the school paid PenTeleData just under $20,000 in 2018 and not $570,000 as the tax form states and that the form is most likely fraudulent and that it is possible school funds were being embezzled.

The report also states that there were questionable purchases made on multiple school debit cards in 2017, 2018, and 2019 but it can't be determined if the purchases were made for personal benefit.

"I alerted the fraud auditor to the 1099 that looked suspicious. It seemed odd to me that there would be a 1099 for $570,000 to an internet service provider when we don't own our building. Why would we make such improvements,” said school board member Sharon Jermany.

Jermany said she encouraged the school to seek the independent audit at the beginning of the year after doing her own investigation into the school's finances.

Jermany said the audit took about 6 months to complete but finding the necessary documents was a difficult process. "A lot of the documents at the school are missing. A lot of our records are missing,” she said.

Trouble at the Easton Arts Academy Charter School started in 2018 when its former principal filed a lawsuit claiming the then chief administrative officer and CEO rigged grades and threw out employee evaluations. Both have since been fired or quit.

Jermany said it will be up to a board vote to decide if they want law enforcement to look into the fraud allegations. "This really needs to be investigated by law enforcement. We can't just sit on it,” she told 69 News.

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