Audit citations lead to fiscal changes

But even with the citations, Middletown schools treasurer Kelly Thorpe called it “a very good” report because some long-standing policies are being modified.

Thorpe, Middletown’s treasurer since Aug. 2011, said this was the first time in seven years the state performed the audit. Previously, she said, each district hired an independent auditor, one who was “less detailed orientated” than the state.

The audit, which ended June 30, 2012, was released Tuesday and showed that Middletown needs to put “new processes in place,” Thorpe said after reviewing the findings. For years, she said, the district cleaned up its books at the end of the fiscal year. She said the state auditor has instructed Middletown to do it quarterly.

One citation showed Middletown failed to recover $291 from a $500 Kroger gift card it purchased for Joshua Belcher, a special education teacher who has since left the district. Belcher, the audit said, spent $209 on the gift card and he provided receipts. Thorpe said the money was spent on groceries to teach the students basic cooking skills.

After Belcher left the district, he was contacted via email by the district in September that he needed to return the card and its remaining $291 balance. Belcher said he mailed the card back to the district’s office, 1515 Girard Ave., but school officials said they never received the card. Belcher filed a police report with the Middletown Division of Police on Oct. 22, 2012, saying the card was mailed but never received. Belcher contacted Kroger and was told the card had a balance of $26. The store said purchases were made with the card in mid-September, according to the police report.

Now, Thorpe said, software has been written that will ensure every school employee returns all district-owned inventory before that employee leaves the district. Thorpe said the gift card should have been collected on Belcher’s last day of employment.

The district also was cited several times because different funds showed negative balances. From Dec. 7-11, 2011, the Uniform School Supply Fund showed a negative balance, the high being $332,460, the audit showed. Thorpe explained that, for instance, school fees may be $25 per first-grader. She said the 70 percent of the district students who qualify for free or reduced lunches don’t pay student fees.

Before, she said, at the end of the fiscal period, the district transferred money from its general fund to offset the lack of collected fees. Now, she said, the district will monitor the fund monthly, and transfer money when needed.

For two weeks in February, the district’s General Fund had a deficit of $1,626,971, but that was because the district was waiting for money from the county audit, Thorpe said. She called this citation “not a big deal.”

The District Managed Fund, on June 29, 2012, was reported at a $523,917 deficit, the audit showed. Thorpe said this was typical for the district because it “cleaned up” the fund at the end of the year. She said the district will make quarterly payments now.

The district also was criticized for allowing its special education coordinator to purchase gift cards from Kroger with district money and put gas points on her personal Kroger plus card. Thorpe called this a “conflict of interest” for the coordinator and said every employee was notified against this practice. She said any perks earned with the district’s money should benefit the district, and not employees.

Also, the district was issued a citation because it used funds from the American Recovery and Reinvestment Act to purchase items that weren’t allowable, according to the auditor’s office. Thorpe said the district was told by the Ohio Department of Education that was purchases were permitted. She said these funds were used as student incentives for the district’s positive behavior support program that, for instance, may pay for a student to attend a school dance.

X