Tuesday, September 16, 2014

State auditor to release findings Wednesday from investigation of Fayette schools

This from the Herald-Leader:
Kentucky State Auditor Adam Edelen is expected Wednesday to release findings from a "thorough investigation" of alleged mismanagement in Fayette County Public Schools.
Adam Edelen

Fayette Superintendent Tom Shelton said Monday afternoon that he looked forward to the release of the auditor's findings and wanted to regain public trust.

"We are confident that the report will reassure our community that all public funds are accounted for and that there was no illegal activity, while also pointing to concrete areas for improvement in our budget and finance processes," Shelton said. "We are ready to put these allegations to rest and begin the process of regaining public trust and confidence as we refocus our entire district on our core mission of serving students."

In August, Edelen told the Herald-Leader that his office was in the final stage of the investigation, and he said he probably would release the findings this month. Edelen said they had hoped the investigation wouldn't take this long, but "upon conducting our investigation, there were numerous allegations that came to the attention of our auditors."

He said it was important that people "be held to account if there are misdeeds found" and that "they be cleared if there are not."

Edelen's spokeswoman, Stephenie Hoelscher, said Monday she couldn't discuss details of the findings before Wednesday's news conference, to be held on the Newtown campus of Bluegrass Community and Technical College. Hoelscher said BCTC had nothing to do with the investigation; its campus simply would be the site of the news conference.

Fayette County Public Schools officials were given the findings late last week and asked to respond, she said. Hoelscher said she received that response Monday.

"We are confident that the examination will finally answer important questions that have been raised about the district's financial situation," she said Monday.

The release of the findings brings to a close a nearly four-month investigation into allegations made by the district's budget director.

In May, Julane Mullins sent board members an email alleging that a budget shortfall was caused by irregular accounting that worsened with "numerous acts of mismanagement." She also forwarded that information to Edelen's office.

In May, when the school board approved a tentative budget, cuts to the budget were described as totalling about $17.5 million. Earlier, Shelton had suggested $19.1 million in cuts.

The allegations led to public drama and divisions in the district's organization.

In Mullins' email, she questioned the timing of an accounting journal entry made by district finance director Rodney Jackson. She also questioned the handling of significant pay raises for top district officials.

Shelton and Jackson responded strongly to the allegations, saying they did nothing wrong or against district policy. They also have denied doing anything that resulted in the district's budget cuts.
In the email, Mullins took issue with Shelton's actions regarding a board policy that required approval for transfers of more than $50,000. Mullins has said that in May 2013, Shelton wanted transfers in his budget in excess of $50,000 to include two $75,000 transfers to NaviGo, a career and college preparation company. NaviGo was founded a friend of Shelton, former Kenton County Superintendent Tim Hanner.

Mullins said in the email that Shelton directed that these "budget transfers be made despite the fact that they violated the board policy requiring approval for such expenditures."

Shelton has said that allegation was untrue and that he simply paid two $75,000 invoices to NaviGo from his budget.

Shelton told the Herald-Leader that his relationship with Hanner, whom he knows personally and professionally, had "nothing to do with the decision to find a way to improve college and career planning in our schools."

Hanner told the Herald-Leader this summer that Navigo had done everything the company was contracted to do.

"Everything we have done is in good faith," he said.

After Mullins made her allegations, Shelton asked Edelen to investigate to reassure citizens there was no wrongdoing.

Additionally, Shelton has recommended to the school board that his annual evaluation be delayed until the state auditor completed the investigation.

Edelen has said that after Mullins made the initial allegations in late May, the investigation quickly expanded to other allegations.

Hoelscher said Monday that at least three auditors worked on the investigation. Their work included conducting interviews and reviewing documents.

She said the investigation was narrowly focused on the allegations that centered around "budget and finance issues."

Read more here: http://www.kentucky.com/2014/09/15/3430856_state-auditor-to-release-findings.html?sp=/99/322/&rh=1#storylink=cpy

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