WHITELAND, Ind. -- State auditors accuse central Indiana school district of putting millions of dollars from an employee benefit fund into risky, unauthorized investments.

A state audit showed that Clark-Pleasant Schools transferred $2 million from one insurance fund to create a second fund in an effort to cover employee health insurance costs, 6News' Joanna Massee reported.

According to the audit, the money transfer was not approved by the school board, as required by state law, and the school transferred funds into unauthorized investments.

"The Clark-Pleasant Community School Corporation has taken actions that have directly resulted in the loss of significant public funds and in the potential loss of far greater amounts," the report said.

Superintendant Kevin Caress defended the district's decisions, but said that school officials decided to comply with the state and put the funds in different investments.

"We, ultimately, after long discussion with them, offered to make these changes and agreed to alter the plan as they suggested," he said. "It is also important to note that no one stole money from the fund, that there was no act of malfeasance by any individual with the funds."

Nonetheless, state auditors have forwarded their findings to the attorney general and to the Johnson County Prosecutor's Office.

"If I was a tax payer, I'd be concerned if I saw an audit report like this," said State Board of Accounts supervisor Charles Nemeth.

Caress said he was told that no charges will be filed against the district. He said Clark-Pleasant Schools does have enough money to cover insurance costs for 2010.