Auditor General Jack Wagner's Audit Finds Mid Valley School District Officials Charged $36,478 to Taxpayers

Jun 23, 2010, 16:23 ET from Pennsylvania Department of the Auditor General

Expenses for Florida conference not authorized by school board

HARRISBURG, Pa., June 23 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner said today that seven board members and a school principal at the Mid Valley School District in Lackawanna County attended a National School Board Association conference in 2008 in Orlando, Fla., without approving the trip at a public meeting, and rang up $36,478 in undocumented or excessive expenditures paid by taxpayers.

Auditors found that the district reimbursed travelers for such questionable expenses as:

  • $1,338 for amusement park passes, parking and meals
  • $1,516 for meals, including $641 for dinners at Ruth's Chris, a high-end steakhouse
  • $389-$480 a night for rooms at luxury hotels

The conference was held March 29-April 1, 2008; however, six board members arrived early and stayed additional days after the conference had ended, and billed taxpayers for the expenses, Wagner said. The school district reimbursed attendees for these expenses, which included $9,709 in hotel accommodations and $982 in car rentals, even though they failed to provide itemized receipts, as required by the state law and district policy.

Although several board members subsequently reimbursed the district for a portion of their expenses, none provided repayment in full. Wagner said he was referring his findings to the State Ethics Commission for further review.

"With Pennsylvania facing its greatest economic crisis since the Great Depression, it is incumbent on all public officials to demonstrate to taxpayers that they appreciate the value of a dollar and are not wasting precious financial resources," Wagner said. "I strongly urge the principal and school directors who violated the public's trust in this case to make full restitution to the Mid Valley School District, and I urge the school district to pursue reimbursement if it's not provided voluntarily."

The Public School Code permits school board members and employees to attend conferences if they are deemed in the financial or educational interest of the district, and it requires the district to reimburse attendees for legitimate expenses. However, a review of school board meeting minutes determined that there was no documentation in the minutes giving authorization for the eight attendees to attend the National School Board Association conference. Neither was there evidence that the conference attendees presented estimated expenditures for approval of travel advances, as required by school policy.

Auditors noted that the district had pre-paid all conference fees, air fares and hotel expenses, in addition to advancing each attendee $750 for meals and other costs.  If receipts provided after the conference totaled more than the prepaid expenses, officials were reimbursed for the additional costs.

Wagner faulted the district for inadequate financial controls and oversight of established policy regarding requirements for conference attendance.

"The conference expenses submitted to the district for payment clearly demonstrate a disregard for the prudent use of taxpayer money," Wagner said. "The school board and the school district violated the public's trust that this money would be used appropriately.  This conduct is unacceptable, particularly in the face of the tough budgetary times that school districts and taxpayers alike are confronting today."

Wagner's audit made 10 recommendations, including that the district should:

  • Document the board's approval of officials' attendance at conferences in meeting minutes.
  • Ensure that final reimbursements include only expenses that were legitimately incurred, and require attendees to reimburse the district for any reimbursements that were judged not necessary.
  • Consider analyzing how many individuals need to attend a particular conference and put this decision to vote in a public meeting.
  • Determine an appropriate length of stay for each conference, and avoid reimbursing attendees past that set period.
  • Affirm in district policy that entertainment expenses incurred while attending an approved conference are not reimbursable expenditures.

"As public employees and officials, school district administrators and their boards of directors have a responsibility to the taxpayers," Wagner said. "The school's reimbursement procedures must be fixed so that a situation like this does not occur in the future, to ensure that public monies are spent judiciously and for their intended purpose, and not for personal gain."

Wagner's audit also cited the district for possible teaching certification deficiencies. A complete copy of the report, including the district's response, is available at www.auditorgen.state.pa.us.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly.  He is the Commonwealth's elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations.  The Department of the Auditor General conducts more than 5,000 audits per year.  To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department's Web site at www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General



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