A nonprofit booster club has raised new concerns over a $7,500 taxpayer grant awarded to the North Little Rock School District to pay for practice clothing for the high school football team.
Members of the NLR Athletic Foundation say they believe the school district has submitted receipts for athletic apparel that students get to keep for personal use, making the items ineligible to be funded by the grant awarded by the taxpayer-supported Central Arkansas Planning and Development District.
Planning district officials said they don't award grants for personal use and that they would have asked the district to revise its grant request if it had originally asked for sweatsuits that students get to keep.
"There would never be a time where we would grant money to an individual," said planning district Executive Director Rodney Larsen. "We thought that over 500 students would benefit from this, not just a few."
The foundation has previously questioned the validity of receipts turned in to the planning district by the school district to prove the grant was spent either on the items in the original grant request or on a suitable substitute.
The latest objection regarding the receipts was included in a complaint filed this week by foundation President Jay Amberg with the Arkansas State Board of Public Accountancy.
The complaint seeks to have school district Chief Financial Officer Denise Drennan's accounting license suspended or revoked, and it accuses her and Athletic Director Gary Davis of misappropriating the grant money.
School district officials have dismissed the claims in the complaint, saying Drennan did nothing wrong.
The questions about the grant come as the school district seeks to fire head football Coach Brad Bolding over claims that he violated the district's purchasing policies, among other issues.
In early February, the school district submitted a receipt for the practice clothing originally listed in the grant proposal. But that apparel was purchased by the NLR Athletic Foundation, which is separate from the school.
After the planning district questioned the first receipt, the school district withdrew it and submitted almost 100 pages of new financial documentation to show that the $7,500 awarded in December 2013 was spent on football players.
The new documentation included two purchases of Nike travel warm-up outfits that were made after the school district received the grant.
But foundation members and Bolding say the football players get to keep those sweatsuits at the end of each season and that many parents paid for them.
"It's like a nylon, slick-type material, and they buy them, they own them," Bolding said.
Some fundraising money was used to make up the difference if parents couldn't afford the apparel, he said.
Bolding provided a partial list of players to the Arkansas Democrat-Gazette that includes whether they paid for their warm-ups. Bolding also provided canceled checks from a handful of parents that indicate they were written to pay for warm-ups.
Amberg, the foundation president, said he thought the district was being "hypocritical" in its handling of the grant in light of its decision to fire Bolding largely over not following district purchasing and inventory procedures.
"They're going to get on Brad Bolding because of spending, but then they're going to turn around and submit phony, unsubstantiated documents, not once but twice?" Amberg said. "Everybody makes mistakes, and people can forgive that. But sometimes you have to fall on a knife and admit the mistake."
Both Drennan and Superintendent Kelly Rodgers said the district will repay the money if the planning district doesn't accept the additional documentation as a substitution.
Drennan said that if the planning district had asked the school district to return the money at any point, "we would have written a check."
She said that after it became clear that the school district hadn't spent the money as it was intended, a planning district staff member suggested that the school district try to substitute other purchases that were similar to the items listed in the initial grant proposal.
Drennan said she and the staff member decided on the second set of warm-ups -- a purchase of $8,945.82 -- because it was a similar amount to the original grant.
Drennan said she contacted Davis in the athletic department, who then wrote a formal letter requesting consideration of the substitution. Davis sent the letter to the planning district via email on March 2.
On Wednesday, Davis said he wasn't aware that the second set of warm-ups might not qualify for the grant.
"The kids keep them, but they use them for their whole high school career. For most of them that's their sophomore, junior and senior year," Davis said.
On Wednesday, Larsen said the planning district's governing board has given him the power to determine if the substitution is appropriate, but a decision to ask for the grant money to be reimbursed would have to come from the board, which meets monthly.
"The grant was essentially for a product that would be reused for up to five to seven years," he said. "It's a big question, and I'm waiting to see how the rest of it falls out before I make a decision."
School district officials said the grant was deposited into Bolding's fundraising account, which he was responsible for making sure was spent on appropriate items.
In a firing notice issued in late February, the school district listed purchases totaling more than $230,000 that administrators said showed Bolding had violated school district policy and procedure. The district noted that more than $140,000 of the purchases had been made after district officials admonished Bolding in August 2013 for not following district purchasing procedures.
Bolding has denied any wrongdoing and said he will appeal the termination although he had not filed an official request to appeal as of Wednesday.
The majority of the purchases in the firing notice were made by the NLR Athletic Foundation, which was previously known as the NLR Quarterback Club.
The nonprofit has close ties to Bolding and often purchased football equipment, clothing and other items for the football program over the past few years.
In 2013 alone, the foundation raised $112,882 and spent nearly $93,000 on "goods and services for the North Little Rock High School Football team," according to the nonprofit's tax form.
Amberg said the letter of termination -- the second issued to Bolding since Jan. 30 -- spurred him to file the accounting complaint, which also accuses Drennan of unethical conduct in the handling of the coach's firing and the school district's finances.
The complaint accuses the school district of obtaining the NLR Athletic Foundation's financial records under false pretenses -- saying the district asked for the records for insurance purposes but then used the documents to bolster Bolding's firing.
Amberg noted that the school district used the foundation's documents to support more than 60 of the 79 purchases listed on Bolding's latest termination letter.
"If they had never had the financial documents, what would that second termination letter even look like? It might not exist," Amberg said.
Amberg said the school district also copied a $600 check listed in the foundation's documents that was paid to Montez Peterson, the stepfather of star wide receiver K.J. Hill.
The district has cited the Feb. 7, 2013, check as proof that Bolding or "a third party with [Bolding's] knowledge" gave Peterson the money about a month before Hill enrolled in the North Little Rock district as a sophomore.
A copy of the check, signed by former foundation President Billy Starks, was submitted to the Arkansas Activities Association in early February when the school district "self-reported" a potential violation involving the $600 and contact Bolding had with Peterson.
Citing the violation, the school district voluntarily forfeited 10 football and at least 24 boys basketball games, including the Class 7A state boys basketball championship, during the 2013-14 academic year.
The ethics complaint to the accounting board states that Bolding and the foundation suffered irreparable harm as a result of Drennan's actions, including the firing of one of its board members from his personal job after the AAA publicly released foundation records submitted by the school district.
Drennan said she believes she's done nothing wrong.
"Without going into specifics, I can say I fully believe that I was doing my job for the North Little Rock School District. I was protecting the North Little Rock School District, and I was being ethical," she said.
Drennan said she requested the documents from the foundation so she could get all of the equipment inventoried and put on the district's insurance. She said the foundation only told her not to copy its IRS Form 990 tax information, which she said she didn't.
She noted that many of the potential ethics violations cited in the foundation's complaint don't apply because she's not an accountant offering financial services to the public.
As chief financial officer for the district, she said, her responsibility is to the school district, which included alerting administrators if she saw a problem.
Rodgers said Drennan was doing what he expected her to do.
"Denise has no duty to the foundation because she serves as an employee of the North Little Rock School District. Her duty is to the North Little Rock School District board, and ... she reports to me if she finds problems, which in this case she did," Rodgers said.
Jimmy Corley, the executive director of the Accountancy Board, said that within a week of receiving complaints, the board reviews them to make sure it has jurisdiction and to determine if there is enough validity to move forward.
From there, the board's compliance committee would investigate and hear evidence from both sides before making a determination. If the committee finds in favor of the complainant, the accused has the right to appeal a decision to the full Accountancy Board.
Corley said the board can recommend more continuing education or issue fines up to $10,000. He said it's rare to issue such a high fine or to suspend or revoke an accountant's license.
A Section on 03/12/2015