The Southeast Delco School District is out more than $280,000, and the former employee who allegedly stole the money won't be giving it back.

That's because Mary Arnold, the district's former food-service assistant director, used students' lunch money to feed her gambling habit at Harrah's Casino in Atlantic City, Delaware County District Attorney G. Michael Green said yesterday.

"She presented a Diamond Club card from the casino to the detectives conducting the interview," he said.

Arnold, 54, of Collingdale, is under house arrest, facing multiple counts of theft and receiving stolen property.

The alleged theft was discovered in September, when school district auditors noticed that Arnold had been writing checks to herself.

When confronted by Superintendent Trudie Bennett, Arnold first admitted having done so twice, according to court documents. But she has been charged with taking a much larger cut by telling couriers who collected the cafeteria money from each school to bring it directly to her office for "auditing."

That turned out to be a euphemism for stealing, authorities said.

Arnold was allegedly depositing only a portion of the money in the bank - sometimes none at all - and cooking the books so the district's auditors wouldn't notice the discrepancy, according to the police affidavit filed in Folcroft district court.

Arnold's attorney, Stephen Schukraft, of Media, could not be reached for comment.

Borough police began investigating last year, "but it got so big, we turned it over" to the county Criminal Investigation Division, said Folcroft police Sgt. William Wisely.

"Once the deposit bags were in her control, she would remove cash and change deposit slips accordingly," D.A. Green said.

She was released on her own recognizance yesterday and confined to her home with an ankle bracelet.

"With many of these thefts by insiders in private companies, in nonprofits, in church groups, in little leagues, and here in this school district, we again find inadequate accounting control over cash transactions," Green said.

Robert DiOrio, solicitor for the Southeast Delco School District, said the district had "cooperated fully" with the investigation and has taken steps to prevent a repeat. He declined to elaborate or discuss whether the district would be able to recoup the $287,362. Bennett referred requests for comment to the solicitor.

Arnold, who is facing 16 counts of felony theft and related charges, waived her preliminary hearing yesterday.

She allegedly told investigators that she had stolen money from the district and gambled it away,but was surprised that she had taken such a large amount over a period of five years.

Authorities said Arnold believed that she had taken about $100,000 less than the audit showed. *