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Status Report to the Board March 13, 2012
Prepared by Kerry Smith, Business Administrator, C.P.A., M.B.A.
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.
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.
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.
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.
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
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.
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.
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.
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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
Payee Louis Wong
Personal Other Eml!!ln'men, No llids
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10/3012009 11/13/2009 11/13/2009 121812009 1211412009 1/612010
4/1612012 6128/2010 8/18 /2010 8/18/2010
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11/1012010 1/1112011 1/1112011 112712011
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
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Parks Sportsman Louis Wong
Miry-lite Universal Athletics Universal Athletics Louis Wong Louis Wong Magelbys Lone Star Builders George Bayles Brad Monks
Monks Monks Monks Bayles Monks 111 Bayles Bayles Bayles Bayles Monks Bayles Monks Bayles
Wong Wong Wong
Wong Bayles Monks
Louis Wong Louis Wong Far West Bank
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
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
Drivers Ed and FoothalllJinncrs
Personal car repair
S 3% .36 S
Wong Wong Wong
Under Annour GolfToumamcnt
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
S 30,425.65 S 114.75 S
Trip Monks Monks 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
Wong Wong Wong Wong Wong Wong Wong Wong Teemont Wong Wong
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
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