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Montgomery main focus of CC-E's state audit report

Tuesday, January 10, 2012

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....


Comments
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What do you bet he'll get off with pretty much a slap on the wrist.

I've seen these before where someone will steal 30k from a PTO organization or something along those lines and they get zero jail time.

The guy caused a lot of damage, caused many to lose their jobs, caused a district to teeter on the edge of closing down, and he will get a slap on the wrist.

Unfortunate.

-- Posted by financeman on Tue, Jan 10, 2012, at 8:39 AM

Go here and check the report out. He was using the credit card as if it was his own. Unbelievable the arrogance.

http://auditor.iowa.gov/specials/1030-12...

-- Posted by financeman on Tue, Jan 10, 2012, at 10:43 AM

At some point all of these expenses were paid with approval by the school board. Yes, he was using the district credit card for personal use, but I would hope and expect that all expenses incurred with district resources to be reviewed, evaluated, processed and approved by the school board. It appears that a deflection of blame is conveniently being offered by the school board. All should be held accountable.

-- Posted by Comanche Alum on Tue, Jan 10, 2012, at 10:53 AM

As a parent of a student at CC-E I am outraged and Monte needs to be held accountable! No amount of money is going to make up for the heartache I experienced when my daughter sat at the supper table and cried because she was afraid the school would close! Shame on you Montgomery for ruining a school that I have been so proud that my children attend!!

-- Posted by lasitagail on Tue, Jan 10, 2012, at 2:41 PM

Comanche Alum - Obviously there were flaws in the internal controls of the school but Montgomery took advantage of these flaws and stole from the school district.

Not just a little bit, but stole a lot. The blame lies squarely on one person. It's kind of like saying that the homeowner is responsible for their house being robbed because they forgot to lock the doors.

-- Posted by financeman on Tue, Jan 10, 2012, at 3:15 PM

Need I remind you that there was two of them that stole from the school! Monte does need to be held accountable for this but so does the board secretary. She missed used it too. Also didn't bring it to anyone's attention. I say the ppl that should be held accountable are not all held accounted yet!

Monte

Ott

Brugman

Brugman because it is her job to make sure those two are doing theirs. She should be asking for accountablity for the spending. You just can't sign your name and not ask why the hell that was bought!! How much crap can you get from a store before a red flag shows??? An Ipod really and no one noticed?? shoes, really??? Heck even the auditor that we had should be hung for this too and the accountant. Does anyone look at statements and reciepts???? HELLO!!!

-- Posted by acerdj on Tue, Jan 10, 2012, at 4:07 PM

acerdj - The audit report did not say anything about Donna Ott stealing any money. As the above report states, "$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" that amount of money was "unsupported" but that doesn't mean anybody stole it. The report also states, "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." FYI everything previous to this says that she resigned. She was not terminated.

There was a question about if Ott could repay the school the overtime she put in/earned at the meeting last night, and then a statement that it seemed that she suddenly started getting paid overtime in July of 2005 (from the start of the audit) as if she were in cahoots with Montgomery covering up his stuff ...she didn't just get overtime during the time that was audited. She worked at that school for 30+ years. She lived and breathed that school. It IS a lot of overtime, but she earned that overtime and it's ludicrous to even consider having her pay that back. Does anyone have any idea the amount of work she did? Over the years, as either the positions were eliminated due to finances or they retired, the 4 secretaries at Royal and 3 at Everly trickled to 2 and 2 while Donna was there, and now 2 and 1. How can you not expect any of the secretaries to get overtime when they have that extra responsibility? And Donna was the board secretary, so she had additional responsibilities.

Everyone can talk and speculate, but I guarantee you that in the end, there will be no valid charges filed against Ms. Ott.

-- Posted by CCEParent/Employee on Tue, Jan 10, 2012, at 8:07 PM

Financeman, I agree that Montgomery took advantage of the flaws in the internal controls that you mention. Hence the reasoning that all should be held accountable. Did the school board forget to deploy the internal controls?

-- Posted by Comanche Alum on Tue, Jan 10, 2012, at 8:18 PM

its awful when teacheres kids look up to for there succes. steals from what kids need to learn. they still money than it cuts down on school lunches, cuts down there education, no money than kids cant learn. that money is there for a reason, for a good education, anotherthing why do those people feel they have to steal from the school, the teacheres probbally make good money but act like they are poor.its rediculous.teacheres are spose to love the students to help them grow to succes, not rob the school blind, and robing the school children.

-- Posted by twinkle on Wed, Jan 11, 2012, at 1:37 AM

Comanche Alum, I think there were just no internal controls in place. What is odd to me is that if you read prior audit reports there are numerous mentions of internal control recommendations along with concerns about the overspending. Answers were submitted that procedures would be put in place and the auditor accepted them.

I do think the auditor and any state officials whose job it is to review annual reports should have to answer as to why these controls were allowed to be not put in place.

-- Posted by financeman on Wed, Jan 11, 2012, at 8:46 AM

twinkle, the culprit was not a teacher, it was an administrator. It is also no secret that admins make significantly more money than teachers.

I find it odd that Montgomery so blatantly abused the card. Purchases totaling such a high amount at a high frequency with items so obviously not intended for school use... Its almost like there was some sort of mental issue there; kleptomaniacs get a rush from their thefts but are usually careful not to be caught. Did he really think he would continue to get away with it without someone to help him explain away or sweep the purchases under the rug? Makes you wonder...

-- Posted by notinia on Wed, Jan 11, 2012, at 9:56 AM

ok notino

thanks for clearing it up with me.

-- Posted by twinkle on Wed, Jan 11, 2012, at 5:42 PM

im learning disabled.

-- Posted by twinkle on Wed, Jan 11, 2012, at 5:43 PM

Notinia -- interesting theory about Montgomery's potential mental issue -- I happen to believe that his arrogance is so great and his contempt for accepted societal mores and norms is so profound that he truly saw himself as "deserving" and "above the rules". When one sees himself in that regard, he/she tends to overstep established boundaries and becomes careless.

Nevertheless, I will ponder your observation further.

-- Posted by letthecircusunfold on Wed, Jan 11, 2012, at 6:23 PM

K sorry on the MS. Ott. The only thing left is this. What happen to I need help. I don't care that she got overtime. I have a secreatery too and she deserves alot more than what she gets. So I get that part.

But by law, if you do not turn in someone that you have suspicion on or know that they are stealing (granted very gray area) you are a co conspirator. Just saying. You can not tell me that she did not know. Specially with the items that were being bought. It is and was up to her to check all receipts. There should of been a whole gaggle of them!! This is where I am coming from.

In what I do, I have to justify the crap that I buy with company card to my own secratary. It is a good practice for the simple fact is because of IRS, she won't get blamed and THERE IS NOT ANY QUESTIONS on what was done! That to me is who is responsible and making sure thier butt is covered. I do know Donna and love her to death outside of this. But friendship is friendship and business is business. Many do not know how to separate them.

Also Notinia my husbands always says, "It starts off as I will pay it back right away, but turns into a out of control situation." hence the reason why ppl have high credit card debt, gambling problems, etc. :( Sad but true.

-- Posted by acerdj on Thu, Jan 12, 2012, at 7:57 AM

I am amazed at what has happened but should have seen it coming. He certainly did not deserve the money he stole and probably not even the money he earned, unless u consider playing online computer games and roaming the halls earned money. I also find it hard to believe that no one on the school board had somewhat of an idea of what was going on. Its time for some of them to go!

-- Posted by Maverickalum on Thu, Jan 12, 2012, at 11:30 AM

some people spend a couple of days in jail even its

little cash as 50.00.i think he got off easy

-- Posted by twinkle on Thu, Jan 12, 2012, at 2:12 PM

there was only 2 of them that stole, but it was still alot of money they should of went to prison. if i remember right theft is 5 yeares atleast in prison. its not teaching the kids anything if these 2 people get away with it by only paying the money back.thats my opinion, i know someone that stole a candy bar and got 2 days in jail.

-- Posted by twinkle on Thu, Jan 12, 2012, at 2:30 PM

this school needs our prayeres.

i believe we all make mistakes.

its wrong for what he did.

but god forgives, even if its big.

-- Posted by BunnyRabbit on Thu, Jan 12, 2012, at 5:06 PM

As appalling as it is to have Mr. Montgomery using the school credit card for his personal use and excessive overtime for Ms. Ott, I do not believe those are the primary issues that caused the financial downfall of CC-E. What is more concerning to me is that the school lost money on one line item in the amount of $153,640.00! How many more of these items contributed to the deficit balance of ($1,073,741) in the general fund and ($35,639) in the nutrition fund? As I understand the State Audit report (refer to the above link posted by financeman) these were the only two funds that were audited because of Ms. Ott's failure to properly code expenses. It is my understanding that schools maintain numerous funds in order to keep their funds segregated for a variety of reasons. Both parties appear to lack the financial expertise it takes to manage a multi-million dollar business. Yes, the school is a business; therefore, it needs to hire people with the proper knowledge and financial/accounting training. Although Ms. Ott may have been a long-term employee and spent numerous hours at the school, tenure and hours worked do not necessarily equate to a competent employee. Mr. Montgomery lacked integrity when he directed Ms. Ott to hide the deficit balances from the school board by leading them to believe the $1, 073,741 was a positive number rather than a negative number. It appears to me that all of the tax payers in the CC-E school district should have questioned Ms. Ott's salary when the school salaries were posted annually in the paper. Will the school be able to recover the credit card expenditures and the $153,640 from Mr. Montgomery since he failed to file a reimbursement claim? I would encourage everyone to read the detailed audit report, because the credit card and overtime are just the tip of the iceberg, the issues are much deeper and much more concerning.

-- Posted by LivinginIA on Thu, Jan 12, 2012, at 8:48 PM

This situation has affected the lives of many, many people.

The audit is complete, the truth has been revealed and many lessons have been learned.

As a parent of three CC/E students, I would like to see the Board of Education and administration move forward and turn their focus to our children's education.

We have to have faith that due process will bring justice for the wrongs that have been committed.

-- Posted by MusicTiger on Thu, Jan 12, 2012, at 8:57 PM

Montgomery and Ott should both be charged with embezzlement or grand larceny! They're both crooks!

-- Posted by Dennis the Menace on Fri, Jan 13, 2012, at 9:18 PM

I am sure law enforcement will charge them for the crimes they are guilty of. But like I have said before, Ott is not guilty of anything but working too hard for the school. She did ask for help, but didn't get it, which is why she got so much overtime, which not only Montgomery knew about but also the board. The board approved everything, including the credit card bills. I just think it is so easy to lay blame on Ott because it's harder to lay blame on everyone and make everyone accountable, so just take out the easy ones! What's wrong with that picture? And the audit is not completely accurate, but that's another story.

-- Posted by CCEParent/Employee on Sun, Jan 15, 2012, at 7:00 PM

CCEParent/Employee -- You state that "the audit is not completely accurate, but that's another story." What do you mean by that? What qualifies you to criticize the expertise of State of Iowa Auditors? Do you have auditing experience, or at least accounting experience? I would love to hear this explanation!

-- Posted by letthecircusunfold on Mon, Jan 16, 2012, at 4:20 PM

I'm just saying that they said in the audit that Ott was terminated, but she in fact resigned. So, don't you think that a minor detail like that could actually turn out to be more? If the school told the state they terminated her, but she resigned, that's lying to the state. So, don't you think other things could possibly be misconstrued?

-- Posted by CCEParent/Employee on Mon, Jan 16, 2012, at 9:47 PM

this is my opinion, if ms. ott is not guylty

than why did she re sighn and move away not long after this that happend with the school, to me that draws suspicion.but i agrre its board memberes fault too. its there job to make sure the school is runed right.

-- Posted by BunnyRabbit on Tue, Jan 17, 2012, at 12:31 PM

she might not of stole the money. but she misused it, so the school still got introble for her not using it right.

-- Posted by BunnyRabbit on Tue, Jan 17, 2012, at 12:34 PM

than shes not guylt of anything if she had receits.

-- Posted by BunnyRabbit on Tue, Jan 17, 2012, at 1:47 PM

tickedoffparent, I will agree with you that the board was culpable for oversights, at least those as long-running as the ones mentioned in this article. It truly boggles my mind that a couple of the board members in office when this fiasco was occurring managed to get re-elected. The communities dropped the ball on that one- time for some fresh blood and hopefully new insight/enthusiasm.

-- Posted by notinia on Tue, Jan 17, 2012, at 2:17 PM

thank you

ticked off parent

-- Posted by BunnyRabbit on Tue, Jan 17, 2012, at 5:52 PM

Please learn how to spell. Our comments don't carry much weight when we look like stupid hicks. As for the school, it's a lot like your boss or any president in the last 50 years. (Trust Me. I know what I'm doing). Sound familiar?

-- Posted by trybeinghonest on Sat, Jan 21, 2012, at 9:30 AM

excuse me, im learning disabled

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:03 PM

im mentaly handy capped

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:05 PM

no i dont know how to spell good, i been handycapped sence i was a child. but i get privalages on the computter

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:12 PM

this is how i learn, why someone let me ,log me in.

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:16 PM

in my opinion and in alot othere.

we think mcgomerry should of got arested it was stealing.so nobody is wrong about that

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:19 PM

so im responding to the story like everryone else

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:26 PM

and as for the school im not against the school, i just think he should of gotton areested he stole a lot of money that was not his to spend.

-- Posted by BunnyRabbit on Sat, Jan 21, 2012, at 6:33 PM


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