Clay Central-Everly school district representatives and patrons were presented with a gift of sorts Monday night. The special investigative report publicly issued by members of State Auditor David Vaudt's office is one that will allow the district to move forward.
CC-E Board President Sue Brugman greeted the approximately 100 residents who had gathered in the high school gym in Everly by saying, "We appreciate your ongoing interest in what's going on in our district." She then introduced Annette Campbell, Tami Kusian and Lara Van Wyk, representatives of the state office, to present their findings.
Over the past 13 months, members of the state office have scoured CC-E financial records dating from July 1, 2005 to Nov. 30, 2010. Campbell, director of the office's performance investigation division, explained the audit detailed $102,908.72 of improper and unsupported disbursements.
"We were unable to determine whether additional amounts may have been improperly disbursed during the period of our investigation because adequate records were not readily available," Campbell said. "Several internal control weaknesses were also identified."
The $47,802.71 of improper disbursements includes $41,844.36 of charges on the district's credit card issued to former CC-E Superintendent Monte Montgomery, $5,126.94 of double payments and $831.41 of finance charges or late fees. Personal purchases paid for with the district credit card included items such as groceries, fuel, Reebok Pump tennis shoes, clothing, $1,689 for clothing at the Mall of America, Chicago Bears memorabilia, two iPods, iTunes gift cards, tires and oil changes, video games and DVDs, and dry dog food.
"We identified 217 purchases from Walmart, of which 195 were from the Walmart in Spencer," Campbell read. "Of the 217 purchases, 115 were classified as improper and total $19,196.05. ... On March 16, 2010, Mr. Montgomery purchased a 46-inch LCD television, a DVD recorder and various over-the-counter medications from Walmart. But on April 12, 2010, Mr. Montgomery reimbursed the district that $1,046.35 cost to the district."
Montgomery tendered his resignation Nov. 22, 2010, when confronted with a request for verification of questionable charges on the district's credit card. The former superintendent acknowledged using the school credit card inappropriately, communicated his desire and intention to make full restitution to the district. A $25,000 check written by Montgomery and addressed to the district at the time has since been cashed by district officials.
The $55,106.01 of unsupported disbursements identified in the State Auditor's report includes $35,304.92 on a district credit card issued in Montgomery's name and $19,801.09 on a district card in the name of former CC-E Business Manager Donna Ott. This credit card, Campbell clarified, was used by a number of district staff. Ott, who also served as board secretary, did not bring certain concerns to the board's attention in a timely manner and the board terminated her employment on Jan. 22.
"The district paid $41,008.72 of overtime to Ott during fiscal years 2010 and 2011 and the district did not apply for $153,640 of Medicaid assistance reimbursement for residential care costs incurred for a student," Campbell said.
As Campbell concluded her formal presentation, board members and the general public were allowed to ask questions. Whether criminal or civil charges will be pursued was one query.
"We have met with the county attorney. The decision is entirely up to the county attorney," Brugman answered. "That's all I am at liberty to say at this time."
"For most theft cases, which would be a typical type charge, and again I'm not speaking to this specific case but what we've dealt with in the past, theft is a typical charge after a report like this," Campbell added. "Usually there is a three-year statute of limitations. However, there is an exception in the code of Iowa for any governmental official. In this case, this would be considered a governmental official and the statute of limitations is out the door. And, I'll end that with, 'I'm not an attorney.'"
Monday afternoon, Clay County Sheriff Randy Krukow affirmed that deputies from his department have been interviewing potential witnesses.
"We will relay those findings to Clay County Attorney Mike Houchins," Krukow said. "I would hope that would be done within the next two weeks. It may be sooner, but I can safely say within the next two weeks we'll get that to the county attorney for him to decide on what charges he is going to file."
When asked if Montgomery's teaching and administrative licenses would be revoked, Campbell said a copy of the report was sent Monday to the Board of Educational Examiners, which oversees such determinations. Copies of the report have also been filed with Houchin's office, the Division of Criminal Investigation and Iowa Attorney General Tom Miller's office.
Superintendent Robert Raymer and CC-E board members were also asked if "things have been put in place for this to never happen again."
While CC-E board member Curtis Langner shook his head affirmatively and stated, "Yeah," Brugman added, "The board has beefed up its policies. ... We have changed our policies and this will probably be ongoing. I would anticipate with the release of the 2010 and the 2011 annual audits there will be other suggestions from the State Auditor's office. In fact, we have already implemented some of them."
When questioned what the state audit investigation and report will cost the district, Kusian, the deputy auditor of state, explained, "Every governmental entity that has an audit has to file a filing fee with our office when they have an audit report issued. That filing fee is used for a lot of different things. One of the things it is used for is when fraud occurs. There are certain circumstances in which some of that money can be used for some of those costs. And, that is the case here."
To summarize the report's findings, the CC-E board president said, "The audit report we have received tonight was not something triggered by the state. This was ordered by the school district in order for us to clear up our finances and enable us, as a school district and as a community, to move forward, frankly, psychologically. I just don't see that we could have moved forward without the information we received tonight. So, I'm very appreciative to the state auditors for completing their work thoroughly. But, this was an investigative audit that we ordered on ourselves because we wanted the questions answered."
"As things are now," Brugman continued, "with the plan that we have submitted to the School Budget Review Committee, we are scheduled at the end of this fiscal year to be positive in our spending authority. Now, it's not positive by too much, but it's positive and it's enough of a cushion that is acceptable. If the SBRC does award us modified allowable growth (on Wednesday, Jan. 18) in any amount, it might be up to $742,000, that's what we're asking for, but if they award us any modified allowable growth, that would be icing on the cake. But, with the cuts that we made last year that are actually being implemented in this school year, we are still to the positive at the end of this fiscal year.
"We are feeling confident that our meeting on the 18th will go well at the SBRC. But, we would ask all of you to be supportive with your prayers. We've all been in this together and I appreciate the support of the community. It's been a great community to work with. We all had a lot of questions 13 months ago and everybody was bewildered. If you were like me, you felt like you'd been slapped. But, we got through it together. I think we're almost there."
* A copy of the report is available for review in the office of the State Auditor and online at http://auditor.iowa.gov/specials/1030-12....