District program misused $177K

Audit: Early Childhood Program employees bought adult tricycles, more


The state Department of Education released this week to the public its audit findings of Sumter School District's Early Childhood Education Program, which it previously provided to the State Law Enforcement Division as part of an ongoing criminal investigation into financial improprieties in the district's program. The investigations stem from an anonymous letter received by the department and the district earlier this year. The department released the audit findings to The Sumter Item after the district submitted a corrective action plan Tuesday to the department.

In that audit report, the department's Office of Auditing Services asserts the district's 4-year-old kindergarten program administrators misused about $177,000 in state funding in recent years, and the state department says it wants that money back. The district said in a public statement Thursday that it's cooperating with authorities and has already implemented safeguards and more stringent fiscal policies to correct the outlined issues.

A finalized 11-page report from the department's Office of Auditing Services details "unreasonable" and "excessive" program training fees paid by the district to two district employees totaling $163,157.21 and several "unallowable, unreasonable and unnecessary" programmatic expenditures incurred by the district for supplies totaling $13,765.58. Items purchased include adult tricycles, hammocks, patio furniture and small kitchen appliances. The report also highlights about $16,000 in other "questionable" programmatic purchases and improper purchasing practices to not require formal bidding by the early childhood program director, who is no longer employed with the district.

The office conducted three on-site visits to the district in its audit this spring to investigate and confirm allegations, according to its report.

The district received from the state Department of Education about $3 million in Early Childhood Education Program funding in fiscal year 2015-16 and about $2.2 million in fiscal year 2016-17. The district's Child Early Reading Development and Education Program has been in place for a few years and is a part of the state's Read to Succeed Act, which was passed into law in 2014. Program money is intended to be used to provide services that focus on the developmental and learning support that children must have in order to be ready for school, according to the state department.

The audit findings detail two district employees - the early childhood program director and a health coordinator/school nurse - in the Child Early Reading Development and Education Program for four-year-old kindergarten were being paid "excessive" amounts to provide professional development training annually to the program's four-year-old kindergarten teachers and instructional assistants.

Those pay rates were $125 per hour, according to the DOE report, and the state agency now recommends the district reimburse it $163,157.21 for the "unallowable and unreasonable expenditures" charged to the district's program during the previous two fiscal years (2015-16 and 2016-17).

In disallowing the expenditures, the audit report describes the state department has guidelines for such training that "schools/districts are encouraged to consolidate and coordinate professional development activities across regional and district boundaries to reduce costs" and there was no evidence to indicate Sumter School District made such efforts with neighboring districts - even when a very limited number of teachers needed the course.

Furthermore, the audit report details the early childhood director received additional compensation of $96,687.50 more than her regular annual salary in the two fiscal years for providing trainings. The office said the trainings should have been part of her regular job duties because her job function was to oversee the program.

After calls were made to her office Thursday, it was determined that the early childhood director no longer works with the district. An office receptionist said she thought she had retired.

The audit report details the state department acted on an anonymous complaint from Feb. 2, 2017, on the excessive training payments, and the agency's Office of Auditing Services began an onsite audit at the school district on April 4, 2017.

In its corrective action plan submitted Tuesday, Interim Superintendent Debbie Hamm said no district employees will conduct Early Childhood Education Program training for the time being, and all required programmatic training will be handled offsite through offerings made by other school districts or through other offsite training programs.

After the district was made aware of a different complaint in late April stating the early childhood director purchased numerous items with program money for personal purposes, the Office of Auditing Services conducted subsequent onsite visits to the district on May 1-2, 2017, and June 7, 2017, according to its report.

After interviews with the early childhood director, warehouse workers, program classroom teachers and others, the office reached its decision that numerous purchases made by the director for the program were "unreasonable" and "unnecessary," the report says, totaling $13,765.58. Expenditures in question include purchases of adult tricycles, adult hammocks, foldable hammocks, canopies, a waterpark and fan, among other items.

The office said it rendered its decision after it found numerous purchases were not in use in schools' 4-year-old kindergarten classrooms in the district and based on "inconsistent" explanations by the program director, among other factors.

The investigation concluded that some items were placed in classrooms, schools and in a district warehouse only after notification of the office's onsite audit. Additionally, some items were shown to office auditors in the follow-up visit in June but were not present in the visit on May 1-2, and some items that had been purchased were never accounted for by the early childhood program director.

The office said it's seeking reimbursement for the $13,765.78 in unallowable expenditures that were from Staples, Kmart and Wayfair.

In its report, the office also detailed other purchases by the program director it deemed "questionable" for program purposes - to include patio furniture, vacuum cleaners, carports, a bed, slow cookers and other small kitchen appliances. Those purchases - from Kmart and Wayfair - were for at least $16,218.06, according to the report, and the office recommended the district contact applicable authorities to determine the full extent of the director's questionable spending.

The report says the program director was able "to make many recurring, unnecessary expenditures" because the cost of the transactions was less than a $2,500 threshold and did not require bids and a higher level of approval.

In the district's corrective action plan for the program, Hamm said a monthly review of all purchases less than $2,500 will be conducted for the early childhood program to determine if offices' purchases are reasonable, necessary and allowable. Also, the district will conduct a periodic check of items purchased by the program to ensure they are in the classrooms and being used by students. Hamm said this check will be made on at least a quarterly basis.

Messages left with SLED on Wednesday and Thursday were not returned. A SLED spokesperson said previously the agency will not likely make any comment until the investigation is closed and/or charges are filed.

Statement from interim superintendent Debbie Hamm:

Our Child Development Education Program (CDEP) is a vital and thriving program that serves hundreds of our youngest children and their families. We value the services provided by CDEP and are proud of the dedicated employees who continue to work with our children so they are ready for school. After being named Interim Superintendent, I reviewed the State Department of Education Office of Auditing Services initial findings, and (district) Chief Financial Officer Chris Griner and I met with the State Department auditors. I also met with district employees and learned that the district cooperated fully with the State Department from the beginning. Based on my discussions, I can assure the community the district has learned from the audit and has taken appropriate action to improve CDEP operations. In Sumter School District, we are moving forward with fiscal responsibility and increased transparency in all that we do.