Monroe continued on AX
MONROE — Monroe Local School District has filed a civil lawsuit against former school treasurer Kelley Thorpe, claiming she neglected her duties and forced the district into the financial turmoil it now sits in.
The lawsuit states from 2008 through 2011, Thorpe, who is now Middletown City School District’s treasurer, failed to act reasonably and failed to exercise ordinary care in the performance of her professional duties.
This is the first time Monroe officials have sought action against Thorpe since they claimed the district was millions of dollars in debt due to accounting errors.
The Middletown accounting firm Clark, Schaefer, Hackett & Co. and the bonding company that represents Thorpe’s work were also named in the lawsuit filed in Butler County Common Pleas Court.
According to the lawsuit, Thorpe should have known that certain expenditures she authorized could not be paid out of Monroe’s bond retirement fund ... that certain transfers and/or expenditures were illegal and/or impermissible; and that she had failed to properly identify and disclose all relevant facts to the school district regarding its funds, accounts and financial statements.
The school district seeks judgment in excess of $25,000, recovery of court fees and attorney costs and “any all other relief the court deems just and proper” in the lawsuit.
Monroe faces a $2.2 million general fund debt and a $3.1 million legacy debt, which was caused by misspending of a bond retirement fund dating back to 2005, said Holly Cahall, who became the school district’s treasurer after fiscal year 2011.
“Defendant Thorpe failed to provide a true portrayal of the financial condition of (the school district),” the lawsuit adds.
The lawsuit says, as a direct result of these acts, omissions and breaches of duties by Thorpe, the school district has suffered actual damages. The exact amount of those damages is to be proven in the trial, according to the lawsuit.
A recent state audit found 14 citations that were found during the time Thorpe was handling Monroe’s financial books.
Thorpe, who left Monroe in 2011, did not return a phone call asking for comment.
Middletown District spokeswoman Gracie Gregory said Thorpe was not in the district offices and would have no comment.
“With most pending litigation matters, my practice has been not to comment,” said David Lampe, an attorney representing Monroe schools.
The district was placed under fiscal watch Feb. 2 and was given time to create a recovery plan. The plan was submitted on April 23, but was deemed unacceptable by the Ohio Department of Education.
The Ohio State auditor then placed the district into fiscal emergency status May 9.
A state-appointed Financial Planning and Supervision Commission was then created May 31. They’ve met twice and have until Sept. 27 to develop a recovery plan. Their next scheduled meeting is set for 2 p.m. Thursday in the Monroe Elementary School cafeteria.
The school board has placed a $2.5 million, 7.05-mill five-year tax levy on the August ballot to help it recover from its financial troubles.
The lawsuit claims Clark, Schaefer, Hackett & Co., the accounting firm responsible for auditing the district’s books during the same time period, was negligent in its duties. Representatives from Clark, Schaefer, Hackett & Co. did not return a call seeking comment.
The suit also claims that the Ohio Casualty Insurance Company had issued a $50,000 bond conditioned upon the faithful performance of Thorpe’s duties as Monroe’s treasurer.
As a result, the school district wants payment or release of the full amount of the bond “as a result of the negligence and other tortious conduct” of Thorpe.
Contact this reporter at (513) 705-2851 or jbombatch@coxohio.com.
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