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Status Report to the Board March 13, 2012


Prepared by Kerry Smith, Business Administrator, C.P.A., M.B.A.

Introduction
Recent reviews of School accounts at Timpview High School revealed violations of professio na l ethics, Provo School District policies and procedures, and of the State Procurement Codes. The employees involved have been thoroughly trained to follow those policies and procedures designed to ensure the proper use of public funds, and to protect the employees.

Background
During a leadership change at Timpview High School in the summer of 2011, several concerns were discovered concerning possible ethics violations and the improper handling of revenues and expenditures in t he foot ball and Driver's Education programs. On October 4,2011 the District superintendent requested a Staff investigation of those concerns. On November 10, 2011, preliminary findings from the staff ra ised addit io na l concerns in these areas. The District superintendent then requested that the Utah State Office of Education review the student activity and club accounts at Timpview High School. The State Office agreed and condu ct ed an audit of those accounts and financial records. On March 2, 2012, the State Superintendent of Schools presented his report to the Provo Cit y School District in a closed meeting as a "protected" and therefore confidential record. The District im mediately fo llowed up with its own analysis of the State report and its findings. While that review continues, the prelimina ry fi ndings are significant and require immediate response.

Ethics
The football coach signed a uniform supply contract without following District policy or the State Procurement Code which provided football coaches $10,000 of clothing annually plus an additional clothing allowa nce of $1,500 to the head coach. This agreement violates District Policy, the Utah Ethics Act, State ru les, and the State Procurement Code. Some employees have accepted personal benefits outside their contracts, received unauthorized expense reimbursement, circumvented and violated Board policy and proced ure and have been insubordinate.

Expenses Summar'l
A sample of 55 School account checks issued over the last 2 1/2 years was reviewed. The checks selected totaled $141,926.46. Of them, $114,567.00, raised concerns. $96,772 appears to have not been bid properly according to District policy or the State procurement code; $3,537 was to reimburse expenses which appear to be related to employment outside of the District; $2,251 was reimbursement for expenses which appear to be

personal and unrelated to District business; $12,820 was for restaurant expenditures; and $639 which appears to be personal travel expenses wrongly reimbursed. Of the questioned transactions, approvals were given by School administrators in error, without proper review, or outside of District policy. 12 of the approvals were missing or ill egible, 17 of the approvals were by a former principal, and 27 of the approvals were by assistant princi pa ls.

Revenues Summary
The footba ll program appears to be co-mingling public and private funds. The manner of depositing, holding and accounting for some of those funds in non-school accounts makes tracking and accounting for the funds impossible. Some deposits of public funds have not been timely made nor accounted as required by District policy. Public funds have been used to pay the cost of School fundraising expenses but the District is not able to locate revenue deposits from them. Some employees chose to not follow policy and not use the school financial systems to make deposits, or track receipts, opting for manual tracking which cannot be verified or reconciled. Activity fees approved by the Board were not collected in the proper amount nor recorded by payor. Revenues for use of District property have not been consistently accounted or deposited.

Findings and Recommendations


Fund Raising
Money generated using public funds and assets; including school property, the District name, employees in their public capacity, or students while they are the responsibility of the District are public funds for which the District is responsible. Those funds need to be properly tracked, deposited and accounted by the District. The District should assure that funds donated for specific projects are properly approved, that all donated funds for those projects are on deposit with appropriate contracts, and payment and completion bonds in place, before any project begins. The District should approve and oversee all such projects, ensuring compliance with all state, local, and District procurement laws, policies and building codes. The terms and conditions of all donation agreements involving District property should be approved in advance and appropriate records kept on file.

Driver's Training
There appear to be frequent procurement law and policy violations in bid, purchase and funding of vehicle purchases for the Timpview High driver's training program. District funds were improperly placed with a dealer without proper bids, contracts or controls. Adequate procedures for the tracking of fuel expenditures should be put in place at the school level. It is recommended the District centralize many operations of the drivers training programs and implement fuel expenditure controls.

Athletic Game Concessions


Concession sales and purchases are handled by coaches. There is inadequate tracking of expenditures and revenues, and the State Procurement Code and District purchasing policies are frequently not followed. It appears that purchases of a personal nature using District funds are mixed with concession inventory acquisition and not reconciled.

Conclusion
The District should continue its review of policy, procedure and compliance. It should take immediate corrective actions making clear the Board's expectation of public trust, transparency, accountability and integrity; and the District should take appropriate disciplinary action where warranted, and express its appreciation to its dedicated employees properly fulfilling the mission of the District.

Check H

Year

Date
81712009 K/l2I2009 8/1 712009
8/25/2009 9/23/2009

Total
90.86 S S 1,624.99 S 5,768.49 S 1,612.40 815.52 S S 3,360.00 S 13,787.84 S 6,135 .29 S 1,818.08 598.77 S 585.00 S S 4,000.00 S 1,359.58 S 1,318.58 572.64 S 257.03 S 164.10 S 300.00 S 353.89 S 887.04 S 200.00 S S 2,179.58 S 2,479.06 S 4,376.40 S 6,991.80 S 14,680.00 S 1,428.29 S 30,425.65 S 5,607.15 991.14 S 810.75 S S 2,514.80 413.20 S 185.92 S 581.73 S 498.00 S 300.00 S 152.00 S S 1,037.32 102.90 S 121.90 S 268.87 S S 2,504.18 S 5,760.00 S 1,500.00 S 1,070.48 500.00 S 587.03 S S 2,460.00 279.23 S 579.22 S 966.76 S S 2,537.48 453.49 S 972.03 S

Questioned Amount

Payee Louis Wong


Louis Wong

Requestor

Concerns

Restaurants

Personal Other Eml!!ln'men, No llids

l>16K 4 l>171K 61747 61799 62006 62134 62218 62332 62411 62412 62587 62629 62689 62699 62718 62836 62896 63049 63096 63309 63831 63973 63975 64058 64236 64345 64380 64461 64519 64521 64564 64880 64898 64974 65033 65042 65171 65432 65920 65932 65933 66083 66168 66173 66178 66276 66284 66323 66363 l>63Hl> 66526 66532 66587 66727 66752

2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2010 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2011 2012 2012 2012 2012 2012 201 2 20 12 20 12 20 12 20 12 20 12 20 12 20 12

10/212009
10120/2009

10/3012009 11/13/2009 11/13/2009 121812009 1211412009 1/612010


1/6/2010 1/8/2010

1/2912010
2/9/2010 3/4/2010

3/1112010
4/1612012 6128/2010 8/18 /2010 8/18/2010

8128/2010
9123/2010

101712010
10/19/2010 10/30/2010

11 /212010
11 /3120 I0

11/1012010 1/1112011 1/1112011 112712011


214/2011

21712011
2/2812011

3/3012011
6/6/2011

61712011 61712011 61712011 8/11 /2011 8111 12011 8111 12011


8/30/2011 8/31 /2011 9/6/20 I I 9113 /2011

9116/2011 10/11 12011 10/11 /2011 10/1712011 11 /4/2011 I I/K1201 I

S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S S

90.86 1,303.13 5,248.49 6.93 675.54 3,360.00 13,787.84 6,135.29 15.24 90.00 585.00 4,000.00 1,359.58 1,318.58 447.76 18.64 164.10 300.00 353.89 396.36 200.00 915.66 2,479.06 358.80 6,991.80 14,680.00 3.99 29,329.02 114.75 991.14 810.75 2,514.80 109.38 185.92 581.73 498.00 189.63 152.00 1,037.32 102.90 121.90 268.87 2.27 5,760.00 1,500.00 3.15 114.77 587.03 2,460.00 65.16 579.22 16.74 74.43 107.45 972.03

Parks Sportsman Louis Wong


Louis Wong

Miry-lite Universal Athletics Universal Athletics Louis Wong Louis Wong Magelbys Lone Star Builders George Bayles Brad Monks
Louis Wong

Monks Monks Monks Bayles Monks 111 Bayles Bayles Bayles Bayles Monks Bayles Monks Bayles
???

Wong Wong Wong

Wong
Wong
Wong

Wong
Wong

Wong
Wong

Wong Bayles Monks


Wong

Louis Wong Louis Wong Far West Bank


Louis Wong

Edgemont Service Louis Wong Louis Wong At Cost Apparel George Bayles 171 Lets Logo Bayles Yardworx Bayles ??? Louis Wong Universal Athletics Bayles George Bayles Monks Universal Athletics Monks Magelbys Bayles Universal Athletics Bayles Edgemont Service Cunningham Louis Wong Cunningham Edgemont Service Bayles ??? Louis Wong ... Monks George Bayles George Bayles Monks Universal Athletics Bayles George Bayles 711 ??? Brad Monks ... Magelbys Monks Louis Wong Monks Magclbys Monks Mike Bateman Monks Louis Wong Monks ??? Louis Wong Chad Van Orden Cunningham Graphic Display Sign ??? Louis Wong Monks Edgemont Service Monks Louis Wong Monks Louis Wong ??? Timpanogos Graphics Monks Louis Wong 171

Monks Cunningham Bayles Monks Monks Cunningham Bayles Bayles

Wong
Wong

Reimburse food for drivers ed meeting at Magelby'i S 90.86 664.13 S 52.61 S 221.61 Multiple meals, what appears to be personal supplu S No bid, uniforms, part of Universal Athletics purchases S 5,248.49 Concession snacks. personal purchases S 6.93 153.27 S 522.27 Futons and personal food charged to drivers ed. 511 S 80 chairs. only I quote S 3,360.00 Bids not obtained, proper approvals not obtained, Bayles talked 10 at time. S 13,787.84 Bids not obtained, proper approvals not obtained, Bayles talked 10 at time. S 6,135.29 232.66 S 15.24 S 1,320.57 S Sons car repair, unexplained discount S 90.00 585.00 FB breakfast. Tip paid in cash S Not bid. Salesman Scotl Cusick S 4,000.00 Hotel under Ryan Wong friends and family reservation. Orlando, FL.; Did not use travel form ; no purpose for trip; no superii Ilotelunder Ryan Wong friends and family reservation. Orlando, FL.; Did not use travel form; no purpose for trip; no superii Non-school event . No superintendent approval. S 18.64 Personal Car Repair S 164.10
No backup. Reimburse School Supplies

Tcemont
Wong Wong

Drivers Ed and FoothalllJinncrs


Personal car repair

353.K9

S 3% .36 S
206.06

Wong Wong Wong


Teernont

Under Annour GolfToumamcnt

5.00

910 .66

Teemont Wong Wong Wong Bayles Wong Wong Wong Wong Wong Wong Wong Teemont

No bids Former Principals Wife's Airfare Bids after order, purchasing didn't place, faculty apparel No Bid, splitting of invoices S 1,249.34 No Bids Fonner Principals room difference for Wife No Prior Approval, Under Armour Contract 810.75 S No Prior Approval, Under Armour Contract

S 2,479.06 S 35K.KO S 6,991.80 S 14,6KO.00 S


3.99

S 30,425.65 S 114.75 S
991.14

S 2,514.80

Trip Monks Monks Wong Wong


Wong

S 109.38 Under Armour gift for coaches No Bids Bowling Activity Secretary gifts 23.80 S 165.83 S Meal Per Diem, form not used Hockey Monkey crossed out. No Prior Approval, Under Armour Contract
One signature. used travel fonn Little league summer camp restaurant Football Camp Breakfasts Not bid. Salesman Scott Cusick
268.87 S 453.67 S S 5,760.00

581.73

S 1,037.32

2.27

1,083.85

Wong Wong Wong Wong Wong Wong Wong Wong Teemont Wong Wong

S 1,500.00

150.00 S 3.15 S S 114.77 Ice cream. movie tickets. and snacks Coaches Lunch at ESPN zone 587.03 S Banners, trade for CA trip, UVFL, Ruskin, Check City, Provo Breach Resort Personal expenses $ 65.16 Not Bid T-bird Nest 169.69 S 371.80 Golf meals at Gondolfos, snacks, etc.. Mixed with S Restaurant and concession 107.45 S No Prior Approval, Volley Ball Tickets, dinner 582.03 S 42.00 S

S 2,460.00 S
579.22

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