Auditor finds $97,000 went to Houston school administrators

/ 24 April 2012 / jennifer

Edie Grossfield, Rochester Post-Bulletin, Apr 24, 2012 –

HOUSTON — With a report from the Minnesota state auditor’s office in hand, constituents of Houston Public Schools may soon be filing a complaint with the Houston County Attorney’s Office.

The complaint would allege that district staff and school board members used district funds inappropriately, perhaps illegally, between Dec. 1, 2008, and Dec. 31, 2010. It would seek reimbursement to the district, said Kevin Kelleher, a Houston resident who has led efforts to investigate the district’s financial practices.

Petition sent

A petition signed by more than 150 people and sent to the state auditor in February 2011 prompted the investigation. The petition requested, among other things, that the state auditor look into payments made to employees for work on launching the district’s Minnesota Virtual Academy.

The state auditor’s report, released April 17, explains its findings only — it does not make conclusions about whether the Houston school district did anything illegal.

The report says that more than $97,000 in non-contractual payments were made to former Superintendent Kim Ross and seven other district administrators during a two-year period. Of that amount, $20,000 paid between Jan. 1, 2009, and March 2, 2009, was not budgeted by the school board.

On March 3, 2009, the school board amended its budget for fiscal year 2009 to include those previously non-budgeted payments, the report says.

The Post-Bulletin attempted to contact Houston Schools Superintendent Jean Broadwater on Monday, but she had not replied as of this morning.

The petition to the state auditor also requested an investigation into how district credit cards were used. The report says that between Dec. 1, 2008, and June 30, 2010, more than $5,700 in undocumented charges were made to the superintendent’s district credit card. Also, between Jan. 1, 2009, and June 30, 2010, about $4,000 in undocumented charges were made to the district credit card of Steve Kerska, who, at the time, was the director of secondary options.

Kerska’s job was eliminated in April 2010. Ross was put on administrative leave on June 8, 2010, due to investigation into a private business venture he had started with Kerska related to online education. Ross left the district when his contract expired on June 30, 2010.

The report says the auditor’s office couldn’t determine whether the charges made to Ross’ and Kerska’s credit cards were for district business because “the district could not provide us the related vendor receipts.” Also, Ross and Kerska could not provide documentation for travel expenses, “nor did they complete the district’s purchase orders for items they purchased with the credit cards,” the report says.

Compensation anomalies

The investigation also looked into compensation the district paid to school board members for meetings they attended during the 2008-09 and 2009-10 school years.

The per-meeting compensation during that time was $40 for regular and special school board meetings, study sessions, committee meetings and other board meetings, the report says.

According to the report, the district paid board member Steve Scheu for 104 meetings during the 2008-09 school year and 143 meetings during the 2009-10 school year.

“However, the next highest numbers of meetings compensated by any other board members were 39 and 52 respectively,” the report says. “During this time period, school board member Scheu was compensated for 156 meetings from July 2008 through June 2010 for which no other board member received compensation.”

On Feb. 15, 2011, the school board made changes to its meeting compensation policy that corrects the situation described above, according to the report.

The report also found several instances in which the district lost money due to district employees failing to cancel conference registrations and reservations for hotel rooms and airline tickets in time to avoid penalties.

Kelleher, who is a former Houston County commissioner and was the director of the Minnesota Virtual Academy when it started, said he and other concerned constituents had no choice but to petition the state auditor’s office.

“One of the reasons that we’ve had to go to these lengths is because the district has not, the school board has not at all recognized that they’ve done anything improper,” Kelleher said, adding that what bothers him most is how the district’s practices might impact students.

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