A “significant deficiency” was found by the Alabama State Department of Public Examiners when the agency looked at the finances of the Elmore County Board of Education.
The finding said an employee misused BOE accounts. The BOE’s response said the auditor’s issue is in the system’s Child Nutrition Program.
“Items were purchased using the board’s online accounts that were for personal purposes,” the audit states. “Some of these purchases were paid using an employee’s personal credit card. However, additional amounts charged to the school account were repaid when brought to the employee’s attention. In addition expenditures for food, lines, small kitchen equipment and other supplies for catering events and test kitchen activities were not adequately documented to support the allowable purpose of the expenditures.”
Elmore County Board of Education superintendent Richard Dennis said there was no money missing and involved online ordering.
“It is more complicated when you are trying to have a very progressive CNP program,” Dennis said. “We have one of the strongest, if not the strongest. We have a very innovative program. We end up trying to find the policies that will guide us and cover us.”
Dennis said the district self-reported an issue related to orders placed on Amazon across five years totaling less than $160. It involved using a personal credit card to pay for the purchases.
“That is my (chief school finance officer) and finance department doing an investigation,” Dennis said. “Then that is followed up by the state examiners doing a much broader, more in-depth investigation to make sure.”
Dennis said the other issue involved one activity of less than $500. He heard rumors large sums of money were involved, in some cases six figures.
“That is simply not true,” Dennis said.
The superintendent gave two examples of problematic issues. One was using a school board credit card to purchase gas coming back from a conference where a receipt was not turned in.
“I have done this [by accident],” Dennis said. “You have to pay for that. [Staff] have come to me on this.”
The other involved using boardroom tables at a family function such as a Thanksgiving dinner or Christmas.
“That would be potentially an issue,” Dennis said. “It would be something we have to be careful about doing.”
Chris Newton with the Alabama Department of Public Examiners was at the Elmore County Board of Education meeting Tuesday morning to present the findings of the audit. He read almost verbatim the findings presented on at the agency’s website. Newton said any questions about the audit must be delivered to chief examiner Rachel Riddle, who was not present at the meeting.
While Dennis said there wasn’t any money missing, state auditors said in their report there is a likelihood the audit didn’t find everything.
“The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control,” the audit states.
The board acknowledged the finding of using the school account for personal purchases.
“Immediate action was taken to address the concerns and to establish policies and procedures to correct,” the response stated. “The Elmore County’s Board of Education's Child Nutrition Program is innovative in exploring new opportunities to provide better services and foods to the students of Elmore County.”
The board said new programs have vague procedures which contributed to the ECBOE CNP developing its own guidelines.
“It has been discovered that some of the guidance provided by the USDA does not align with other procurement laws for federal funds,” the board’s response states. “The ECBOE CNP Department did not knowingly violate procurement procedures with respect to catering and other small kitchen and test kitchen purchases. …We have developed more defined procedures related to purchasing in the CNP Department and expect these changes to immediately correct the concerns in this finding.”
Auditors said they appreciated the board’s response.
“Procedures should be in place to ensure school accounts are never used for personal purchases,” the audit states.
Dennis said the CNP program wasn’t hiding anything. It was being “innovative” to encourage student participation. He said the food trailer is one of the innovative programs. Dennis said it was even being used at two schools in Montgomery.
“It helps us fund our program,” Dennis said.
Dennis said procedures are now in place and the CNP accounting measures are controlled and reviewed by the finance department. School board policy states the CNP accounting falls under the review and maintenance of the chief schools financial officer.
“The Chief School Financial Officer will maintain financial records that account for the receipt, obligation and expenditure of each federal program fund,” the policy manual states.
According to court records, in January 2020 an Elmore County Board of Education employee and then-Millbrook resident Leah A. Sellers was indicted by an Elmore County Grand Jury for three counts of third-degree theft, one count of fourth-degree theft and one count of using the position for personal gain. In April 2021 Sellers entered a guilty plea to four counts of fourth-degree theft. She also paid restitution at the time totaling $4,715.56.
The indictment lists Dennis, Elmore County Sheriff Bill Franklin and Elmore County CSFO Jason Mann as witnesses.
The audit and response do not state if any action was taken against the employee or employees in the recent audit. Dennis said he couldn’t discuss personnel matters that might have arisen.
“A report was done outlining what took place to the Ethics Commission,” Dennis said. “We addressed it and reported it up front to the state examiners office — the state department [of education] as well and the local [district attorney]. The ethics commission cleared it.”
Auditors also found the violations of the Davis Bacon Act in reporting wages when federal funds are used for construction projects. Dennis said it was the first time Elmore County Schools had used the funds in such a way. He said other systems were also experiencing the same issue in audits.
“It was simply a clause that was left out of a contract,” Dennis said. “That has been corrected.”
