ELMORE COUNTY, Ala. (WSFA) - An Alabama Department of Examiners of Public Accounts audit uncovered several issues with the Elmore County Public Schools’ finances.
The audit covered the school system’s operations between Oct. 1, 2018 and Sept. 30, 2019. It was filed Friday.
Examiners found that:
- The school board failed to comply with certain aspects of the Public Works Law
- The school board failed to ensure all financial transactions were properly recorded
- The school board failed to ensure all capital assets were properly recorded on financial statements
- The school board failed to ensure all payments made to individuals were properly approved.
Elmore County Superintendent Richard Dennis took some responsibility for the issues found by the audit.
"I'm gonna take responsibility as far as the technicalities are concerned," he said. "Those are things I have to accept responsibility."
He wanted to make it clear that no funds were lost. He said there was a procedural error that was corrected while the auditor was there.
“We did not have funds that were misused, misspent or lost in this situation,” he said. “They were miscoded as far as the equipment was miscoded.”
While the audit was underway, the examiners also noted that the school board found unusual activities regarding cheerleading funds at Millbrook Middle School. The board opened a probe and determined the program’s sponsor had used account funds 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 wrote. “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.”
Court documents identified the woman as Leah A. Sellers. She 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.
The Elmore County Board of Education has officially responded to each issue raised by the examiners, laying out its plan for corrective action in each.
A member of the state examiner’s office will be at the Elmore County Board of Education meeting Monday at 2 p.m. to address the audit.
In regard to the first issue, the examiners noted the school board constructed a track at Redland Elementary School which met the requirements of a public works contract. But while the project was put to a bid, the board failed to ensure a performance bond.
“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.”
In regard to the second issue, the examiners found “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.” The examiners noted that “management of the Board was notified of these errors and made adjustments to correct the financial statements.”
The Elmore County School Board, according to the audit, responded that “although we do agree with this, we want to make note that this was missed in the prior year audit that was conducted by the department." Examiners said they appreciated the response, but said “preparation of accurate financial statements is the Board’s responsibility,” and added that it was only corrected by the board after the error was found by the state during the current audit.
In regard to the third issue, the examiners found “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 made this determination after finding the board didn’t record energy savings upgrades for lighting projects at local 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.
The school board agreed with the finding and has since made the corrected adjustments to its financial statements.
In regard to the fourth issue, the examiners found “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 that 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 the refunds. But 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.
The board, according to the audit, said it “strongly" disagreed with the findings, stating it discussed the matter during two board meetings. “ECBOE tried on multiple occasion to seek guidance from PEEHIP and other entities,” the board said, adding that it did not get a response.
Examiners said they could not find anything in the board’s meeting minutes to support the board’s claim.