Fraudsters in the public school system stole more than $225 million in taxpayer dollars over a seven-year period, Open the Books revealed in a report released Saturday.
The report details fraud occurring in 24 states and Puerto Rico, from the West Coast of California to the rural mountains of West Virginia, showing how public school fraud is a prevalent issue across the whole nation.
“When school administrators with access to funds go unchecked, embezzling and misusing
public money, it’s a loss for the students. If it’s in a smaller district, the waste, fraud and abuse impacts in such a profound way that it may take years to recover,” the report stated. Open the Books is a nonprofit, nonpartisan government watchdog organization that “operate[s] the largest private database of public spending in human history.”
Open the Books and the State Financial Officers Foundation (SFOF), a nonprofit focused on promoting responsible fiscal public policy, found that fraudsters only repaid 30 percent ($67 million) of the total $225 million stolen after the OIG “ordered restitution” from some of the criminals.
Open the Books collaborated with SFOF to sift through the Department of Education Office of Inspector General (OIG) reports to calculate the total amount of recorded education fraud since 2019. The groups looked through more than 90 cases of fraud where “schemers were rigging bids, billing for supplies they never purchased, embezzling and more,” Open the Books said.
In one instance of mass fraud by a single individual, California school Executive Director Janis Bucknor confessed to stealing more than $3 million during a five-year period. She spent the cash on “personal travel, restaurants, internet shopping, and private school tuition for her children,” and most notably, over $220,600 on Disney cruises, Disney theme parks, and other Disney-related products.
The state with the most fraud was Indiana, where a single scheme resulted in $44 million in taxpayer dollars never making it to schoolchildren. OIG reported that the administration at Indiana Virtual School and Indiana Virtual Pathways Academy inflated their enrollment numbers for three consecutive years. The schools received millions more in funding from the state than they should have and directed those millions “to fraudulent companies controlled by the founder, which were then funneled to his co-conspirators and others,” the report stated. OIG reports also recorded one school employee being fired for trying to blow the whistle on the mass fraud.
Texas fraud followed close behind Indiana, with fraudsters costing the state nearly $40 million in the past seven years. Florida and Illinois recorded the largest number of fraud cases. Florida fraudsters cost citizens $24.7 million, and Illinois fraudsters $14.5 million.
The report includes fraud data from only three of the “20 largest school districts in the country with the most federal funding.” The OIG has yet to investigate the other 17 school districts, leading Open the Books to write that its survey is “just the tip of another very large iceberg.” Open the Books concluded that “most of the highest-funded school districts are unrepresented here, and among smaller districts the per-student losses to fraud are unacceptably high.”
“Stronger oversight of federal education dollars is more than some bureaucratic exercise — it is an economic and moral imperative,” Open the Books noted. “Families deserve assurance that the public institutions meant to serve their children are not being looted by the very officials entrusted to lead them.”
Secretary of Education Linda McMahon responded to Open the Books’ report on Fox Business, saying, “We’re just beginning now to really look into the fraud [in the] K-12 schools. … I can assure you that we will be following through with our departments to see where this money has been going.”
This level of continual fraud hurts the taxpayer, but especially the American student. Literacy rates continue to decline, and America continues to slip behind foreign competitors in test scores and critical thinking abilities. Evidently, throwing money at the issue does not work; it only lines bad actors’ pockets. A 2025 review of 12,531 school districts by Open the Books found that “districts that spent more on teacher and administrative pay saw their students’ standardized test scores drop.”
The review argues that a positive correlation exists between increased teachers’ pay and student results, but the inverse is true when administrators receive a bloated — or fraudulent — paycheck. Increased administrator pay and “skyrocketing expenses for staff benefits … [redirect] resources away from students, as school districts spend more and more money paying off pension debts,” Open the Books explained.
Baltimore, which is one of the worst school districts in America, “has arguably the most administrative bloat in the U.S.” In 2024, the taxpayer-supported employees in Baltimore’s school district collectively made almost $1 billion, yet fewer than half of the employees were teachers or principals, Open the Books found.
“In some of these cases, there are educators involved in these schemes. There’s so much talk about getting more dollars into the classroom to improve student outcomes, and here are folks who have taken it to buy sports cars instead of school supplies,” Open the Books spokesman Christopher Neefus told The Federalist regarding the fraud.
Open the Books wrote in its report that the best way to limit the amount of fraud in the national public school system is to return education to the states:
Every step must be taken to unwind the enormous bureaucracy and spending housed at the Department of Education, returning education to the state and local level. Not only is that in keeping with the founders’ vision for a limited Executive Branch, but state and local officials are much better equipped to understand the needs of their communities, find efficiencies, innovate for better student outcomes and keep foxes out of the proverbial henhouse.
Though much work remains, the Trump administration has already taken steps to return education to the states and crack down on education-related fraud. Besides signing an executive order to dismantle the Department of Education in 2025, the Trump-McMahon efforts have already resulted in preventing more than $1 billion of fraud in the Free Application for Federal Student Aid (FAFSA) program, the department said. Last month, the Department of Education announced that it is now collaborating with the Department of Justice and the Department of Health and Human Services to “transfer more of its responsibilities to other agencies, prepping the Education Department to one day be shut down for good,” The Federalist reported.
