The Arkansas State Police will take over the investigation into the Bryant School District’s finances, Prosecuting Attorney Ken Casady said Tuesday.
Casady sent a letter to state police last week, requesting the law enforcement agency to “assign an investigator to determine if criminal charges are warranted,” the letter states. State police agreed to take on the case Tuesday, he said. State police spokesman Bill Sadler confirmed Tuesday the agency has opened an investigation into the matter.
“I only have one investigator,” Casady said. “It’s a lot of records to look through. The scope of it will be better handled by state police.”
The investigation began after the state Legislative Audit Division found irregularities in the district’s financial reports.
Among the findings, former business manager Richard Stipe, who resigned last summer, increased two employees’ salaries and started unauthorized payments to three employees for health-insurance premiums.
The salary increase didn’t lead to an overpayment of the employees’ contracts, but the district is working on writing a policy on how to pay classified employees for years of experience, current business manager Angie Drummond told the Bryant School Board and administration Monday night during a work session. The district has a policy for certified employees - mostly teachers - that is based on experience in public education, she said.
“These were the only two that [the auditors] tested,” Drummond said Monday, adding that she found “six or seven” employees, about half of whom didn’t work for the district anymore, who also received the increase.
Only one has been corrected so far, she said.
School Board President Rhonda Sanders said she wanted to ensure that the district corrected each of the salaries fairly.
In January, district employees were offered by email a chance to receive $150 each month to go toward health-insurance premiums, Drummond said. Administrators decided to pay one employee, married to another who worked in the district, for the entire coverage and receive $300 each month to cover both premiums, she said, adding that the district still had 10 families on that plan.
Board member Michael Daly said the offer created a “gross inequity” and he didn’t know how it could continue for the current insurance year.
“It’s either a benefit, and you take it or not,” he said.
Whether Daly liked it or not, administrators offered the measure to employees, board member David Moore said.
“The important part here is that the board needs to approve those policy changes, and it gets back to the part of a lot of this discussion,” Sanders said. “We’re not trying to make a decision tonight.”
Two employees were reimbursed for a whole year’s worth of premiums, a total of $1,800, Drummond said. She will research how other districts offer the health-insurance premiums and take the information back to the School Board, she said.
According to the audit, Stipe also opened an American Express rewards credit card without supervisory approval and made $1.5 million in purchases during fiscal 2013. Purchases included four iPads and office and electronic equipment that weren’t listed on the district’s inventory list. All purchases have been recovered.
Stipe also made an electronic transfer of $51,889 to American Express to pay an outstanding bill because the company hadn’t received checks for the actual payment in time, the audit states. The checks had been cut but hadn’t gotten to American Express on time, Drummond said, adding that she hadn’t found any late fees from American Express.
Now, Drummond and interim Superintendent Fred Dawson have to approve all electronic transfers.
Also in fiscal 2013, the district spent more than $10,000 in American Express reward points to purchase merchandise, despite having earned only $7,700. Before closing out the card in August 2013, the district redeemed an additional $15,775 in reward points as Amazon gift cards, according to the audit.
The district many times wrote checks to merchants, even though it would pay the merchants with the American Express card and later endorsed the original checks “I/C/O (in care of) American Express,” the audit states.
District officials are using the gift cards for technology purchases to get that “completely off the books,” Drummond said, adding that they didn’t want to use them until the audit was complete.
Drummond said the biggest issue was the credit card was opened without administrative or board approval. The way to fix that issue, she said, is to create a credit-card policy that addresses how the card will be used, whether one can be opened and what happens if an employee misuses the card.
“It could have been set up well had it been approved by the board,” she said. “The rewards points could benefit the district, but it’s just a big mess.”
Practices were instituted in many areas and weren’t approved by the School Board, Sanders said.
“The board needs to have an opportunity to have that discussion,” she said. “That is the bottom line.”
Arkansas, Pages 8 on 04/17/2014