Houston School Board addresses auditor’s report

/ 16 May 2012 / jennifer

Edie Grossfield, Rochester Post-Bulletin, May 16, 2012 –

The leader of a group of Houston public schools constituents has asked the Houston County attorney to take legal action against two former administrators and a sitting school board member for allegedly stealing money from the district.

Kevin Kelleher, a former director of the Houston school district’s Minnesota Virtual Academy, and a former Houston County commissioner, submitted a complaint on Tuesday to Houston County Attorney Jamie Hammell.

The complaint is based on the findings of an investigation and report, released April 17, by the Minnesota State Auditor’s office. Kelleher led the effort to involve the state auditor with a petition signed by 150 people in February 2011.

The report found that more than $97,000 in non-contractual payments were made to former superintendent Kim Ross and other district administrators between 2008 and 2010. It also found more than $5,700 of undocumented charges made to the former superintendent’s district credit card and about $4,000 of undocumented charges made to the credit card of the former director of secondary options, Steve Kerska.

The report pointed out inconsistencies in how school board members were compensated for attending meetings and that board member Steve Scheu received compensation for significantly more meetings than the other members.

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.

In Kelleher’s complaint to the county attorney, he outlines three issues related to unauthorized and undocumented use of district funds and asks Hammell to bring charges against Ross, Kerska and Scheu and to seek the return of district funds from them.

Addressing concerns

In the meantime, the Houston School Board has been trying to address the concerns pointed out in the state auditor’s report, said Superintendent Jean Broadwater.

The board has made some changes to policies and procedures and will consult with the district’s auditor, an Austin firm, on June 19.

“The board has decided to invite our district auditors down to go over, line by line, every item that the state auditor found,” Broadwater said. “If they advise us to take any corrective measures or suggest changes, we will absolutely work with them on whatever they would recommend,” she said.

School board chairman Tom Stilin said a change the board already made to its payment system has assured that unauthorized payments cannot happen again.

“It’s a totally different program now from what we had then,” he said.

In addition, Broadwater said the school board recently formed a policy committee to develop rules for how district credit cards can be used by employees, which is something the district hasn’t had in the past.

“They had a purchasing procedure, and now we’re going to look at putting credit card policy under that. There was never a specific outline for what happens with credit card purchases,” she said.

Also, the school board has changed the district’s policy regarding compensation to board members for attending meetings, Stilin said. The auditor’s report said there were inconsistencies among school board members regarding the number of meetings for which they were paid.

“It used to be if you had a negotiation meeting at 4 p.m. and then you had the school board meeting at 6:30 p.m., that was considered two meetings. We don’t do that anymore,” Stilin said.

Kelleher contends that the district still should be able to recoup the funds. Also, he said the school board has dragged its feet on the issues and acted only when constituents forced the matter.

But Stilin said the board has done everything it can.

“When the whole situation happened a couple of years ago, we did everything we could legally do at that time. And if you look at the documentation it would tell you that,” he said.

Minnesota state auditor’s report, Independent School District 294

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