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A new report from the Office of the State Auditor found that Byron Public Schools failed to properly document nearly $60,000 in credit card purchases in 2023 and 2024, at a time when the small southeastern Minnesota district was experiencing serious financial problems that created a huge budget deficit. 

The review found that under previous school superintendent Mike Neubeck and then finance director Todd Lechtenberg, the district made $59,552 in credit card purchases that “were either not supported with receipts or were not itemized as required by law.”

The state auditor’s report also found that the district “purchased at least $4,392 in gift cards at a convenience store, despite local government use of gift cards generally being unauthorized."

State Auditor Julie Blaha said the finding represents a troubling trend among local governments.

“Minnesota laws governing local government credit card purchases include safeguards to protect taxpayer funds from fraud, misuse and error,” she said. “Thorough documentation is a key safeguard, along with appropriate review and approval processes. Without the required documentation, governing bodies are hamstrung in ensuring public dollars are spent lawfully and prudently.”

 for the Byron district, which serves about 2,300 students in the community of about 6,500 people in southeast Minnesota. In 2024, the school board had to make $1.5 million in last-minute budget cuts to close an unexpected shortfall in part created by a budgeting error. 

At the same time, financial records were in disarray, as bank reconciliations had not been completed for months, delaying a financial audit. The district was also over-drafting from accounts to pay teachers and support staff, while an $800,000 line of credit had been maxed out. 

Both Neubeck and Lechtenberg have since left the district.

Current Superintendent Nate Walbruch said he and the Byron School Board have already adopted new safeguards, including one that requires all purchases to be itemized, reviewed and approved by the finance department prior to payment — changes Auditor Blaha praised in her statement about her office’s report. 

Walbruch also said his administration has adopted new practices to make the district’s finances more transparent overall, including developing a budget dashboard for the general public to view online. 

“The idea of that, again, is just to try and rebuild trust with our community,” he said.

Earlier this month, Byron voters approved two funding referendum questions that will generate an additional $1.85 million annually to help close the budget gap.

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Catharine Richert

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A state review shows that Byron Public Schools failed to provide proper credit card documentation for $60,000 in purchases in 2023 and 2024. It's the latest in a series of financial missteps in the southeastern Minnesota district.

Cari Spencer | MPR News

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State auditor finds Byron schools improperly documented credit card purchases amid financial crisis

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