Compiled Ed Wallace – 3/20/2016
In the report issued February 18, 2016 by UBE’s Internal Audit Department (IA), there were 46 areas of noncompliant concerns involving the control environment, dispersements and vehicle use at Enterprise High School.
According to IA: “The Internal Audit Department (IA) received some concerns from a citizen in southern Utah that individuals at Enterprise High School (EHS) were engaged in some questionable financial and compliance practices. The purpose of this audit was to address the identified concerns and verify compliance with school, district, and state policies and procedures and consider potential noncompliance, fraud, waste, or abuse of those guidelines. IA addressed these concerns through examination of financial records,review of state and local policies and procedures, as well as through inquiry and observation.”
The scope of our audit encompassed the time period from July 2008 through September 2015 and focused on the following areas:
1. Overall Control Environment
3. Vehicle Use
Findings and observations for the above areas are summarized below with recommendations for corrective action. Per auditor judgment, findings are considered more severe than observations and findings are prioritized by significance. While performing the audit IA identified several district level concerns, which were referred to the Office of the Utah State Auditor for further consideration in their audit of the district. Additionally, any concerns with educator practices were referred, as appropriate, to the Utah Professional Practices Advisory Commission.”
Some of the areas of concerns included:
– Purchases made without prior approval
– Checks issued to “cash”
– Personal use of school property and equipment
– 1099s not issued
– Teacher dues collected and disbursed from a school account
– Checks disbursed without appropriate signatures
– Credit card control sheets not in agreement with credit card statements
– Unauthorized users of school credit cards
– Lodging paid for nonemployees/family members
– Unreasonable purchases
– Credit card purchases over the $1,000 limit
– Apparent conflict of interest between private interest and public duties
– Multiple types of fuel purchased and multiple same-day fuel purchases for a single vehicle
The IA listed seven concluding remarks relating to issues including noncompliance to Utah Administrative Code and USOE Model Policy. “At the conclusion of our audit testwork, the school still did not have sufficient guidance from the district regarding proper handling of cash receipts, fundraising practices, and vehicle usage that necessitated the continued need to reference Utah Administrative Code and other model policies in the audit. However, since WCSD has responded to the audit, they have taken corrective action to ensure policies and procedures have been updated and employees have been trained.”
In a responding letter to IA, Washington County School District Board President Laura Hesson wrote:
“Dispite our disagreement over many of the Findings and the scope of others, we are dedicated to improving our internal controls, not just at Enterprise Hign School, but also across the district. We appreciate the opportunity this has given us to see how we look to outside eyes.”
EDITOR’S NOTE: A spokesperson for WCSD stated that all relevant documents that the IA requested were provided. A call to Board of Education member Brent Bills was not returned. We will publish any response we get from Mr. Bills or from any other spokesperson relating to this matter.
The complaint was filed by the Enterprise-based CAITS Institute which was founded by Aaron Prisbrey. The following is a copy of a Facebook post from CAITS posted yesterday, 3/19/2016
“LIES, DENIALS, AND COVER UP; COURTESY OF THE WASHINGTON COUNTY SCHOOL DISTRICT
On Friday we obtained a copy of the Utah State Board of Education’s recently completed audit of the financial misdeeds of former Enterprise High School principal Rusty Holmes. After a year, and tens of thousands of taxpayer dollars, the audit found more than 40 categories of financial improprieties at the school during Holmes tenure. The audit is an indictment of the financial misappropriations of Holmes and lack of institutional controls by District Business Administrator Brent Bills. (It doesn’t look like the auditors are done as they are still investigating the entire District).
No longer is there any doubt about Holmes misappropriation of taxpayer funds and the fact that Bills enabled the behavior. But now the focus needs to shift to the active cover-up by the District.
In the Fall of 2014, I started this ball rolling when I served a GRAMA request on the District requesting records from Enterprise High School to look into the financial shenanigans of Holmes. The District eventually turned over the records, but then Superintendent Larry Bergeson and second in command N. Craig Hammer called a meeting at Enterprise where Hammer threatened Faculty and Staff with their jobs if they continued making allegations against Holmes.
Assuming Bergeson was not aware of what the financial records revealed, and assuming he had been provided bad information by District administration, I provided the records and my findings to him. Those records showed numerous improprieties including thousands of dollars misappropriated to the rodeo club, Black Friday purchases to the Home Depo for hundreds of dollars, personal purchases at the Locker Room, and gift cards to Cal Ranch and IFA. We discussed the fact Holmes had purchased a post hole digger for his personal tractor with District funds and that it had never left his rodeo arena, where he used it to install fencing. Bergeson asked for my suggestions as to how to handle the situation, I suggested he fire Holmes and Bills immediately and that he hire a certified fraud investigator to see how much institutional control Bills had lost.
In response, Bergeson fired no one, nor did he hire a fraud investigator. Instead he met with employees from Enterprise high who confirmed what was in the documentation. The District tipped Holmes off that I was aware Holmes was appropriating district property for personal use (which is blatantly illegal) and Holmes was instructed to return it. No criminal referral was made and Holmes was apparently not sanctioned as he remained Principal at Enterprise High.
As it appeared Bergeson was running cover for Holmes activities, I filed a request for the video that, according to a source, would show Holmes returning numerous items to the High School after the District notified him I was aware he had appropriated District property to personal use. The District retrieved the video but refused to turn it over.
In the spring of that school year, Bergeson announced he was going to be transferring Holmes from Enterprise High to be the new principal at Millcreek High for the following year. (sources tell me this was a promotion because Millreek is bigger and that Holmes is now one of the top paid, if not the highest paid principal in the District).
I was informed that the Millcreek faculty was concerned that someone with Holmes reputation would be placed in a position of trust at Millcreek where many of the students have more significant problems than traditional students. Apparently the District called a meeting with the Millcreek administration and faculty and informed them that the allegations of financial impropriety levied against Holmes were categorically false.
As it was obvious the District was going to condone the misappropriation by Holmes and the malfeasance of Bills, I turned over the information I had in my possession to Utah Attorney General, Sean Reyes, in a rather lengthy meeting in Salt Lake. The information regarding Holmes and Enterprise High was the same information I had provided in September of 2014 to Bergeson. While Bergenson’s response was to promote Holmes to principal at Millcreek, Reyes response was to order a forensic audit in conjunction with the State Board of Education.
Now that the audit confirms the financial misdeeds by Holmes, and the lack of institutional control by Bills, will the District continue to cover for the misconduct or will it hold District administration accountable? If School Board President Laura Hesson’s respose to the audit is any indication of what the District will do, it appears the cover up will continue. Hesson penned an arrogant, dismissive response to the auditors:
…with the number of transactions that we have reviewed we feel that the scope of the problems have [sic] been overstated. Overall, we believe that a more thorough investigation of the documentation and a greater understanding of school operations would have resulted in fewer findings and observations.
Really? Holmes was converting District monies and property to his own use, and Bills enabled it to take place and Hesson claims the problems have been overstated. Instead of holding the wrongdoers accountable, the District is going to attack the auditors? This was a team of unbiased auditors from the Board of Education in conformance with International Standards for the Professional Practice of Internal Auditing. If, we teach our young people to refrain from acts of cheating and plagiarism while simultaneously condoning misappropriation and malfeasance by those entrusted with their learning, our young people won’t learn honesty and integrity; they will learn duplicity. It will be interesting to see what lesson the School Board intends to teach.”
Utah Standard News depends on the support of readers like you.
Good Journalism requires time, expertise, passion and money. We know you appreciate the coverage here. Please help us to continue as an alternative news website by becoming a subscriber or making a donation. To learn more about our subscription options or make a donation, click here.
To Advertise on UtahStandardNews.com, please contact us at: email@example.com.