An Alabama Department of Examiners of Public Accounts audit of Elmore County Schools reported instances of the system's failure of properly documenting its financial matters.
The audit looked at the school system's finances from Oct. 1, 2018 to Sept. 30, 2019 and was published Friday.
Accountants reported the board's failure to:
- Comply with certain aspects of the Public Works Law
- Ensure all financial transactions were properly recorded
- Ensure all capital assets were properly recorded on financial statements
- Ensure all payments made to individuals were properly approved
- Concerning the first infraction, the report stated the school board failed to ensure a performance bond for construction of a track at Redland Elementary School.
A statement from superintendent Richar Dennis said the first three infractions listed in the report were procedural errors.
The school board said it should not be insinuated the board intentionally mishandled, mismanaged and/or misreported the use of public funds for an reason.
"Elmore County Public Schools has gained the trust of Elmore County taxpayers because we handle all aspects of school operations responsibility and with integrity," a letter from the BOE read.
The examiners explained much of the audit but this will also be presented at the school board's meeting Monday, May 18.
“The board did not have internal controls in place to ensure compliance with all aspects of the Public Works Law," the examiners determined. "As a result, the Board exposed itself to the risk of monetary loss and liability.”
Dennis further addressed the report findings in a prepared statement posted to the school system's Facebook page earlier today.
"Elmore County failed to secure a bid bond and performance bond on a walking track that was constructed at Redland Elementary School," he said. "No funds were lost in this transaction."
Concerning the second infraction, the report stated, “financial statements were materially misstated by $1,659,123 because internal controls were not in place to record the proceeds of debt issued in the prior audit period.”
"This was a finding that was missed in 2018 but was recorded in the 2019 financial records," Dennis' statement read. "No funds were lost in this transaction."
Concerning the third infraction, the report stated, “financial statements were misstated by $1,723,173.42 because internal controls were not in place to ensure all capital assets were properly recorded.”
Examiners came to this conclusion after finding the board failed to record energy savings upgrades for lighting projects at schools in the amount of $1,659,123; construction in progress in the amount of $24,050 for a donation/grant received for the Redland Elementary School’s track project and land improvements in the amount of $40,000.
"Elmore County improperly coded grant projects at two elementary schools," Dennis said in the statement.
Concerning the forth infraction, examiners reported, “a lack of internal controls resulted in the Payroll Coordinator and Chief School Financial Officer to be paid additional amounts without Board or supervisory approval.”
Examiners found after the Alabama Supreme Court ruled some members of the Public Education Employees’ Health Insurance Plan, or PEEHIP, should receive some refunds, the two employees prepared refunds.
Examiners found they were paid $800 and $4,000, respectively, instead of being paid overtime, and that there was no documentation they worked any additional time on the project outside of their normal working hours, or that the board or any supervisor authorized the extra payments.
"Elmore County failed to properly document overtime paid for two employees that worked to process PEEHIP reimbursements," Dennis said in the statement. "No funds were lost in this transaction."
The audit also reported examiners noted the school board found unusual activities regarding cheerleading funds at Millbrook Middle School.
The board's investigation determined a cheerleading sponsor used funds from the program to pay for extended vacation stays for herself after cheerleading camps.
“A subsequent investigation by the Elmore County Sheriff and District Attorney determined that the funds were used improperly,” the examiner noted in the report. “The teacher was indicted by an Elmore County grand jury on February 4, 2020 and, as of the audit report date, is awaiting a Plea Day.”
Leah A. Sellers was charged with four counts of exerting unauthorized control over funds belonging to the school system (at no less than $500 but more than $1,500 in each count) and one ethics violation for using her official position for personal gain.