A state audit says Bearden High School’s Navy JROTC instructors quietly routed federal program money into a bank account they controlled, leaving major gaps in oversight and recordkeeping. Investigators found that roughly $124,092.95 in federal JROTC deposits went into a separate account that never showed up in school or booster-club books, putting fresh heat on how Bearden handles booster funds and federal grants.
According to a report by the Comptroller of the Treasury, investigators uncovered an account labeled “BEARDEN NJROTC BOOSTERS INC” and determined that instructors were the only custodians and authorized signers. The report warns that this setup “increases the risk that fraud, waste, and abuse will occur without prompt detection.”
Knox County Schools discovered the off-the-books account in April 2025. District records show the current instructor told investigators that a predecessor opened the account before retiring on July 1, 2023. As reported by WBIR, the instructor withdrew $49,451.38 from the account on April 16, 2025, later deposited most of that money with Bearden High School, and kept making smaller transactions until the account was closed on October 17, 2025.
Internal control breakdowns
The Comptroller flagged four key breakdowns tied to the separate account. Booster officials failed to properly safeguard and retain records. The instructors and booster officers did not set up adequate segregation of duties. Checks often went out without the two required signatures. Booster officials also skipped fundraiser profit analyses. Investigators further highlighted questionable transfers between the booster club account and the instructors’ separate account and said missing documentation blocked a full accounting of several transfers, as detailed by the Comptroller of the Treasury.
District and boosters respond
Knox County Schools and booster-club officials told investigators they have already fixed or plan to fix the problems cited in the audit, and the current instructor turned over documentation for many expenses, according to WBIR. The district says the remaining funds from the separate account have been deposited with Bearden High School and that school and booster leaders will work to follow the state’s Model Financial Policy from here on out.
Not the first time
Bearden has already been under a cloud over booster finances. Reporting last year recapped a January 31, 2025 state review that found the Bearden football booster club had improperly written checks totaling at least $60,000 to coaches without Knox County Schools approval, as reported by On3.
What this means for audits and schools
Parking federal award money outside official school accounting can quickly turn into an audit nightmare. The Comptroller warned that leaving federal deposits out of school records risks noncompliance with federal single-audit rules. Federal guidance in 2 CFR Part 200 governs audit requirements for federal awards, and Tennessee law requires school support organizations to follow a model financial policy set by the Comptroller. For more on those standards, see the summary of recent 2 CFR Part 200 updates from the EPA and the statute at Tenn. Code Ann. §49-2-610, as published by Justia…