District questioned on NLR sport gear

A nonprofit booster organization paid for about $7,500 worth of athletic apparel that the North Little Rock School District received state grant money to purchase, and now the boosters and the state are wondering where the grant money went.

The Central Arkansas Planning and Development District awarded $7,496.87 in surplus state tax dollars to the school district in December 2013 to buy 110 sets of warm-up gear for the high school football team.

But documents obtained by the Arkansas Democrat-Gazette show that the private nonprofit NLR Athletic Foundation paid for the gear in November 2014.

The questions about the grant money arose as the school district seeks to fire North Little Rock High School head football coach Brad Bolding. A public hearing on Bolding's termination that had been scheduled for tonight was canceled Wednesday by the school district.

Foundation leaders say the district never reimbursed the nonprofit for the purchase, and they were surprised to learn that the school district turned in the foundation's receipt to the state to prove the grant had been used as intended.

Planning district officials said they have asked the school district repeatedly for canceled checks to account for the grant funds -- as well as funds from another awarded to the basketball program. The district's grant rules require documentation to prove funds are spent as intended, but the school district has yet to produce those documents, the district's executive director said.

School district officials said the grant money was deposited in a football account in early February 2014. They said individual coaches are responsible for keeping track of donations and grants and making sure they are spent correctly.

Bolding said in an interview this week that he sought district Athletic Director Gary Davis' permission to buy the warm-ups shortly after he received word that the grant had been approved. The fleece outfits had already been ordered, he said.

"Davis said the money had already been spent somewhere else, and he turned down my request," Bolding said. "He didn't say where it had been spent, but he's the first signature I need to spend any money."

The fleece hooded sweatshirts and pants sat at the vendor -- BSN Sports of Dallas -- for almost a year, Bolding said, before he decided to approach the NLR Athletic Foundation to help pay for them.

"It was a lot of money BSN was sitting on, and they are a vendor we use a lot," Bolding said. "We didn't have any warm-ups for the kids, and every day some of our team is outside."

Davis said Tuesday that he cannot comment on Bolding's claim because it's part of an ongoing personnel issue.

Bolding has been on paid leave since mid-January. His attorney, David Couch, said Bolding's knowledge of the "misspent grant money" as well as what he said were dozens of other unpaid purchase orders resulted in the coach's firing. Couch also represents the NLR Athletic Foundation.

School district Chief Financial Officer Denise Drennan said Wednesday that she couldn't talk about the specific grant, saying it's a personnel matter.

In general, when coaches receive gifts, fundraiser money or grants, that money is filtered through the district to the athletic department and eventually to individual accounts for each coach, she said. The coaches request permission to spend from those accounts, which requires a signature from Davis and from Human Resources Director Gregg Thompson, she said.

Teachers and coaches who receive small grants are responsible under district policy for making sure they follow the requirements of those grants, Drennan said.

"Generally ... it's theirs to spend on the kids as they see fit," Drennan said. "There's no tracking from the athletic department as long as it's used on the kids."

Documents from the school district, obtained under the Arkansas Freedom of Information Act, show the grant check from the state's general improvement funds was deposited Jan. 13, 2014, and marked for the football program. It was assigned to the football program's account on Feb. 3, 2014, according to those records.

The school district also released financial documents showing deposits and purchases from the football account during the 2013-2014 and 2014-2015 academic years. The latest statement showed that the football account was in the red. It also included a handwritten note: "Bolding overspent account by $1,686.48."

When asked how or if the note applied to the grant funding, Drennan said she couldn't comment because it's a personnel matter.

In its letter of termination to Bolding, the school district accused the coach of four policy and procedure violations, including three that involved the NLR Athletic Foundation.

The district cited Bolding for failing to follow district purchasing and inventory procedures regarding six purchases of athletic equipment, five of which were paid for by the foundation.

The school district also said Bolding failed to comply with the district's policy for disposal of personal property regarding trading old headsets to get a $5,800 discount on new headsets that were paid for by the NLR Athletic Foundation.

The termination letter makes no mention of the purchase of the warm-up suits.

Bolding has denied overspending his account and any wrongdoing regarding the purchases cited in the firing letter.

He also has denied a third allegation made by the district that he gave a $600 check to Montez Peterson, the stepfather of star wide receiver K.J. Hill, before Hill was enrolled in the North Little Rock district.

Bolding and foundation members say they plan to rebut the allegation once Bolding is given a chance to appear before the School Board.

Foundation President Jay Amberg, who handles the nonprofit's finances, said his group agreed to pay for the warm-ups, along with another 35 sets because additional students had joined the team. But he said the foundation has never been reimbursed for buying the gear covered by the grant.

He said the school district contacted him in January asking for receipts for several big purchases that the foundation made for the football program, including a television, headsets for the coaching staff and a football sled.

School district staff members told him they planned to inventory the items for insurance, Amberg said.

Instead, Amberg claimed, the district took his receipts for the warm-ups and submitted them to the Central Arkansas Planning and Development District to show the grant had been used.

"They used our records for their accusations against Brad [Bolding]. And they submitted our receipts to the grant people. I asked them if they planned to reimburse us for the grant portion, and I was told they needed the canceled check. But they had our receipts."

Documents obtained under a Freedom of Information Act request show that the foundation receipt was submitted to the planning district as an attachment with a form signed by Davis.

Drennan said planning district officials called the school district's athletic department earlier this month and said they would pick up close-out documents.

"They called athletics that morning and wanted to come by and get the information. BSN was called to get a copy of the invoice. There was no time to do anything else the same day," she said.

Planning district Executive Director Rodney Larsen said his staff has asked repeatedly for canceled checks to show that the football grant -- as well as a second $2,000 grant also awarded in December 2013 to the school district's basketball program to buy shoes -- was spent properly.

District officials said in response to a Freedom of Information Act request Wednesday that they had no record of the basketball program receiving the grant.

Larsen disagreed, saying the planning district has a record of the grant being released to the school district on Dec. 12, 2013.

Larsen said his next step will be to send a written request for the required documents to close both grants. If the planning district staff determines that the school district did not spend the grant money correctly, he said he would take that information to the district's board of directors.

"They would be in violation of the grant agreement they signed with us, and it would be up to the board, but they ultimately would ask for the money back," he said. "In that same grant agreement they agreed to provide us with these documents and have a clean audit trail, so we will be pursuing this."

The state's eight planning districts were created after a 2006 Arkansas Supreme Court decision that legislators handing out money to their districts -- the old method of dispersing general improvement fund money -- was a violation of Article 14 of the state constitution, which forbids "local and special" legislation.

Groups compete for small grants by applying to those districts when the surplus tax funding is available. Each district operates a little differently, some requiring letters of support from legislators since the money is coming from the state, others not requiring the support but including it as a consideration in their decision.

For the North Little Rock grants, Rep. Eddie Armstrong, a North Little Rock Democrat who is serving as the House minority leader this year, supported the school district's two requests for funding.

Armstrong said that, as far as he knew, the funds had gone to the athletic programs. He said he never received an update but hadn't been concerned.

"It's heartbreaking to know this opportunity to do something that I was really proud of is being washed up in something so unfortunate," he said. "I can't believe we are in a place and space, where we are trying to unseat this coach ... I'm not here to place blame. I was honored to get the call, honored to recognize those students. GIF funding isn't a given. It's not guaranteed. I wouldn't apologize for helping support my alma mater ... but I would be disheartened to know that it wasn't used for the students."

The planning districts require financial reporting for the grants they award, but there is no larger state agency in charge of policing those grants. The districts submit an annual audit to the Department of Finance and Administration, but that department serves largely as a pass-through agency for the funding.

If a problem is found, it can refer the audit to the Legislative Audit Division.

A Section on 02/26/2015