Saturday, October 18, 2014

A Look At Similar Problems Across the Country!

I thought it might be interesting to do some research to see if I could find any other school districts across the country that have had similar problems like we've been experiencing here in the Fox C-6 School District.

It turns out that there are quite a few school districts that have had the same if not similar problems with their administration and school boards. Many of them tend to have very similar themes. Also, many times the abuse of power and wrongdoing had been occurring for many years before the problems were discovered or brought to light.

Reviewing some of these cases will give you an idea of what they looked for and what they uncovered during state audits. It also gives you an idea as to how long it took before they filed charges if they found wrongdoing as well as what the charges were.

For several of the cases, it took between 6 months to a year before an indictment was issued after the findings of the state audit were released. That seems like an eternity knowing that the state audit of the Fox C-6 school district could take up to a year to complete.

One of the best reports I found was a March 2013 video and written audit report posted by the Kentucky state auditor's office of the Dayton Independent School District. The press conference video is an excellent presentation. The case bears many similarities to what's been uncovered so far in our district. I highly recommend watching the entire video. 

The Kentucky state auditor did an excellent job describing what they uncovered during their audit of the Dayton school district. The Dayton superintendent who had been in charge for nearly 15 years bullied and intimidated staff members responsible for issuing checks and reimbursements if they questioned him. The Kentucky state auditor noted during the press conference that there was culture of deceit and entitlement and a lack of transparency and disclosure to both the public and the board.
I certainly hope that Missouri State Auditor Tom Schweich and his audit team watch the press conference as well. Kentucky State Auditor Adam Edelen did an excellent job of informing the taxpayers of what he planned to recover and why it was so important to recover the funds. He stated that they worked with the FBI and forwarded their findings to the Kentucky State Teacher's Retirement System.

The Kentucky state auditor mentions the Hobbs Act which is a U.S. Federal Law enacted in 1946 and is frequently used in cases of public corruption. It's codified in 18 U.S.C. § 1951.

There had only been 139 views of the press conference when I found the video. The number of views will most likely increase as more people learn about it. 

Further down in this article I provide links to more news stories related to the Dayton Independent School District audit and the resulting indictment of the school Superintendent. I also posted links to a couple more cases from other school districts.

Some Common Problems Found In State Audits
Below is a list of some of the problems often discovered during state audits. Fairly often superintendents were found double dipping on mileage and filing false reimbursement requests. They were also found using district credit cards for personal purchases. Do any of those problems sound familiar?
  • Lack of transparency and disclosure to both the public and the board
  • Salary compensations not matching board approved contracts
  • Sometimes there were cultures of deception that misled board and or finance department
  • Intimidation or bullying staff members responsible for issuing checks and reimbursements
  • Lack of oversight by the school board or finance departments
  • District credit cards were used to purchase meals and items for personal use
  • Lavish "Professional Development" trips
  • Use of school funds / public money for personal use
  • Fraudulent reimbursement requests made for purchases or expenses
  • Requesting reimbursements for mileage and gas or double dipping
  • School boards "rubber stamping" expenses and payments

Example Cases From Across the Country
Below are a few examples of cases found across the country using Google searching with the following keywords: superintendent indictment

Dayton Independent School District
A small school district in Kentucky near Cincinnati was audited and found to have problems. The results of the audit were turned over to the FBI as well as the Kentucky State Teachers Retirement System. It was the school district's new superintendent that appears to have reported the problem after finding financial irregularities when he took over after the former superintendent retired.

Kentucky State Auditor Adam Edelen said that the abuse was personally offensive to him and would offend every Kentuckian. He stated that there was a culture of deceit and entitlement. He said the rank and file staff at Dayton were frightened to do the right thing. It was a culture in which you could be punished for doing the right thing. (23:30)

The former Dayton superintendent received $224,000 in benefits and payments over an eight-year period that was not authorized by the school board or obtained from false reimbursements or fraud.

Plans To Recoup Taxpayer Dollars
Listen to what the Dayton school district plans to do to recoup taxpayer dollars at 27:15 in the video. Below is the 3 fold method that the Dayton school district planned to follow in order to recover their funds:
  • Pursue a claim directly against the former superintendent.
  • Pursue a claim against the independent auditor under their professional negligence.
  • Pursue claims against the insurance company who insures the district against employee theft.
Listen to the last 10 seconds of the press conference to hear what the Kentucky State Auditor says about being a "taxpayer watchdog".
The state auditor commented that the former superintendent intimidated staff members responsible for issuing checks if they questioned him. The auditor stated that you cannot police power when you are subservient to those who have the power. The auditor stated that they never had a chance of meaningful oversight of the superintendent who was committed to enriching himself at public expense.

In November 2013, a press release was issued for the Dayton Independent School District stating that $511,000 in taxpayer dollars would be recovered by the school district.

In December 2013, the former Dayton superintendent of schools pleaded guilty to embezzlement. on May 14, 2014 the former Dayton superintendent was sentenced to 2 years in federal prison.

Mason County Kentucky
In Mason County Kentucky, their superintendent of schools was indicted following the release of an October 2012 state audit report of the school district. The findings released in the report resulted in the superintendent's retirement in October 2012. He had served the school district since 1997. The news story below reports that the abuse of the public trust in Kentucky is a class C felony, punishable by 5-10 years imprisonment if convicted.

The Mason County report found nearly $200,000 in expenditures made by the superintendent, six district employees and five board members that appeared to be excessive, lacked supporting documentation or had no clear business purpose or did not go through the district's approval process.

Cincinnati Superintendent and Treasurer Indicted
The Ohio state auditor started investigating the superintendent after an anonymous tip was sent to the state auditor's office in 2006 about credit card abuse. The tip lead to an investigation regarding non-school related expenses and employee compensations to see if they matched board approved amounts.