Audit reveals thousands in misappropriated funds at Earle Schools

Audit reveals thousands in misappropriated funds at Earle Schools

Money spent on championship rings, unauthorized raises among flagged expenditures

news @theeveningtimes.com Earle School District spent nearly $40,000 on 103 school rings for student athletes, the superintendent and his spouse, coaches, two school board members and other employees, a recent legislative audit turned up.

Auditors also found that the district spent over $3,000 on gift cards, had over $31,000 in unauthorized credit card payments and $22,000 in purchases that had no documentation, overpayments of $4,500 to the superintendent, nearly $9,000 in overpayments to the business manager and a licensed employee, paid $1,500 in stipends to employees that were not approved as part of their salary, over $11,000 in questionable travel reimbursements, nearly $700 in bank fees for bad checks, and unapproved salary increases of 5 percent or more to employees.

The report faulted the financially distressed school district for not maintaining proper supporting documents for all transactions, lack of controls over credit card use, discrepencies between employee salaries and what they were actually paid, and that financial records had not been properly maintained and that internal controls did not detect accounting errors.

Audiors also revealed that the school district was left with a nearly $230,000 deficit in 2017.

“There are a number of items we need to work on,” said state appointed Superintendent

Dr. Richard Wilde.

“There are a substantial number of recommendations about our fiscal management that we will consider.”

The school district was taken over by the state in November 2017 and the five member school board dissolved after it was discovered that the school district spent nearly $1 million of federal Title 1 and school lunch funds on unallowable expenses.

Among the findings:

• The district purchased 29 gift cards valued at $1,900 and used points accumulated on district credit cards to purchase 12 gift cards totaling $1,150 for which there is no documentation as to who they were give to and the pupose for which they were used.

• An examination of $63,243 in credit card charges, auditors found that $31,724 in purchases did not have proper approval for payment. Also, $22,524 inpurchases were not supported with documentation or approved for payment including $11,873 for hotels, $5,302 for supplies, $1,218 for meals, $947 for a cell phone, $771 for a vacuum cleaner, $445 for a computer, and $1,968 for other items.

The district incurred $1,576 in late fees.

• An examination of payroll records found that the superintendent was overpaid $4,515; that the superintendent did not provide documentation to the district for personal use of a schoolowned vehicle on his taxes; that the business manager and a licensed employee were overpaid $3835 and $4,550 in unused leave payments; five employees were paid stipends of $5,558, $3,000, $2,500, $900, and $2,850 that were not part of their approved salary; employee contracts were not signed by the applicable board members; the district paid $910,063 in salaries and benefits to 49 employees from the national school lunch funds of which $766,585 were not eligible to be paid from this source of money. • The district purchased 103 athletic rings costing a total of $36,157 of which $10,810 was paid for using money from gate receipts from sporting events. The rings resulted in an average cost of $357 per student which violates state law which prohibits districts from spending more than $100 per student for such items.

The remaining $13,333 was spent for 39 rings as follows: $4,356 for 13 rings for coaches, $2,785 on eight rings for the superintendent and other administrators, $2,437 for seven rings for other individuals, $2,099 for six rings for other employees, $981 for three rings for the spouse of the superintendent and a coach, and $675 for two rings for two school board officials.

• Travel reimbursements totalling $14,036 made to two employees and two board members revealed that three transactions totaling $1,238 did not have proper approval for payment, two transactions totaling $1,420 had no documentation, 13 transactions totaling $7,901 had no documentaion or properly approved for payment.

It also noted that the superintendent was reimbursed $628 for a trip to Denver without documentation or approval, and that one board member was reimbursed $300 for a trip to New Oleans without documentation or approval.

One employee was paid a travel per diem of $300 which violated the district;s policy which states that only board members are eligible to receive a travel per diem.

• The district incurred band charges of $666 on 18 instances of insufficient funds during September 2016.

• Salary increases of five percent or greater were not presented to the school board for approval,

• Checks totalling $41,889 were issued for payment but never mailed. Of that amount, $13,466 were manually voided and auditrs were unable to determine whether they were reissued or still owed by the district.

• The district did not maintain adequate supporting documentation to support sick leave balances.

• Combined fund balances for teacher’s salaries, operating, and debt services caused the district to exceed its legal revenues by

$153,465.

By Mark Randall