Broken Bow Public Schools announced on Monday the district fell victim to a sophisticated phishing scam earlier this year related to ongoing bond-funded construction projects, resulting in the loss of $1.8 million.
This spring, the district received an email containing false payment instructions that appeared to come from a trusted vendor, according to a news release. A $1.8 million payment intended for a contractor was then sent to a fraudulent account and stolen.
The district was unable to confirm which month the incident occurred.
After being notified by the bank of the incident, a full investigation was launched. Broken Bow district officials worked alongside the Federal Bureau of Investigation, Nebraska State Patrol and the U.S. Secret Service to recover nearly $700,000 of the stolen funds.
The district is continuing efforts to recover the remaining $1.1 million through its insurance provider and ongoing investigations.
While it is an "incredibly unfortunate situation," projects related to the district's $26.5 million bond issue passed in 2023 will continue as planned without interruption, according to Superintendent Darren Tobey.
"It'll go on as scheduled," he told the Journal Star.
The district is currently in the beginning stages of remodeling the high school building as part of the bond, which is set to conclude in January, Tobey said.
District officials did not make a public statement at the time of the incident due to the investigation involving law enforcement.
In the months since the cybersecurity breach, the district has implemented new protocols and safeguards regarding financial transactions and transfers to prevent future incidents from occurring, according to the release. The district also noted there will not be a tax increase to cover the financial shortfall.
"We are committed to keeping our community informed and to taking every possible step to safeguard public funds," the district said in a statement." Broken Bow Public Schools takes full responsibility for the fact that these safeguards were not in place, as well as full responsibility for this unfortunate circumstance."
Broken Bow, which is located in the center of Nebraska, is the county seat of Custer County and has a population of around 3,500 people. The public school district serves more than 800 students in Pre-K through 12th grade.
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