One superintendent received more than $200,000 in unauthorized funds
FRANKFORT, Ky. (March 14, 2013) — Education Commissioner Terry Holliday supports a recommendation by Auditor Adam Edelen to require superintendent contracts, benefits and annual evaluations be made available online after a series of school district special examinations found a lack of transparency and oversight.
The auditor’s office last week released a scandalous special examination that found the former superintendent of Dayton Independent Schools received more than $200,000 in benefits and payments that were not authorized by the board. (Get more details below.) An examination released last fall found the former superintendent of the Mason County School District also received compensation in excess of his contract.
“When school boards are in the dark about the benefits and payments their own superintendents are receiving, how can the public ever be confident their tax dollars are being spent to provide our children with the world- class education they deserve?” Edelen asked.
The recommendation follows a recent announcement by Holliday of his plans to impose stricter requirements for superintendent evaluations and ethics and fiscal oversight training for school board members.
“We’re seeing far too many cases where adults are making choices that are right for them rather than what’s really right for students and their future,” Holliday said. “The focus needs to be on supporting what happens in the classroom and ensuring all our students graduate college/career-ready.”
Superintendent salaries are currently posted on the Kentucky Department of Education (KDE) website, but more information about superintendent contracts and benefits is needed to give a complete picture of superintendents’ total compensation packages Edelen said. Later this spring, KDE will send a letter to all school board chairs outlining the reporting requirements, process and deadline for submission, Holliday said.
Once the information is assembled, it will be available to anyone on the Kentucky Department of Education website. In addition to copies of contracts, the department will be asking for information including:
♦ Monthly travel allowances
♦ Exclusive use of a district vehicle, including if it is for personal use
♦ Use of district fuel or district credit card to purchase fuel, including if it is for personal use
♦ Payment or reimbursement for cell phone and
♦ Internet services
♦ Leave time and maximum leave allowed to be accumulated
♦ Reimbursement for personal retirement contributions
♦ Reimbursement for the purchase of retirement service credit
♦ Payment or reimbursement f or retirement annuity
♦ Payment or reimbursement for educational tuition assistance
♦ Association memberships
This move comes at the same time the Office of Education Accountability, at the request of the Education Accountability and Assessment Review Subcommittee (EAARS) of the Kentucky General Assembly, is looking into superintendent employment issues as part of its 2013 study agenda.
“State and local government have come a long way in becoming more transparent, making everything from state contracts to our basketball coaches’ compensation packages readily available, yet important information about our schools is still cloaked in darkness,” Edelen said.
Under KRS 61.870 – 61.884, the Kentucky Open Records Act , all the information that will be collected is currently available to the public. But it isn’t always easily accessible, Holliday said. These efforts will make the information available to anyone, anytime in one location in a format that is clear and straightforward, Edelen added.
“I have always been an advocate for openness and transparency,” Holliday said . “I welcome the auditor’ss recommendations and hope this will result in a greater level of fiscal oversight and responsibility in our school districts. It is the duty of us all to be accountable and good stewards of the taxpayer’s money.”
Superintendent received unauthorized funds, accused of intimidation
Last week, Edelen released details of a special examination into Gary Rye, the former superintendent of the Dayton Independent Schools. Edelen found that the administrator received nearly $224,000 in benefits and payments over an eight-year period that were not authorized by the school board.
“That amounts to $240 per student in a district in which almost 90 percent of students receive free or reduced lunch,” Edelen said. “That’s an unconscionable abuse of scarce resources in a working-class community.”
Auditors found that Rye did not inform the board of benefits for himself and allegedly intimidated staff members who were responsible for issuing checks if they questioned him.
Edelen’s office launched the examination last fall after the new superintendent raised concerns about certain activities of the former superintendent, who retired at the end of fiscal year 2012. The report includes 12 findings related to payments and benefits to the former superintendent, credit card expenditures, assistant superintendent leave and board oversight.
During the time Rye received the unauthorized benefits and payments, the district began to struggle financially as funding decreased and expenses increased. The district also was struggling academically, culminating in a December 2011 assessment by the Kentucky Department of Education that led to state management of the school district’s middle school and high school.
Details of the report
Auditors found the former superintendent was reimbursed $146,276 for his personal retirement contributions and service credit purchases – benefits not included in his contract.
Rye was paid $47,429 for sick and annual leave days that he should not have received. Some of the leave accumulated was not approved by the board; some leave was taken but not deducted from his leave balance.
The assistant superintendent accumulated 16 more annual leave days than was allowable, representing an additional benefit of $6,368.
Auditors also found rampant travel expense abuses. The former superintendent used a district gas credit card for his personal vehicle, which was not a benefit authorized by the board, and accumulated a total of $21,464 in fuel purchases. Rye double- and even triple-dipped – using the district credit cards to pay for gas and expenses, submitting mileage and other expenses for reimbursement and in some instances, receiving additional reimbursement from the Kentucky Association of School Administrators when he served on the group’s board of directors.
In total, he was reimbursed roughly $8,502 for expenses he did not incur, that were duplicated, or were for apparent non-existent meetings.
“Ripping off the district and KASA is heinous enough, but he really outdid himself when he restricted the athletic teams from traveling long distances for games in order to save money,” Edelen said.
While Rye failed to disclose financial activity to the school board, auditors found the board did not consistently perform his annual evaluations and continued to extend his contract without reviewing it or the cost of the benefits provided.
“Unfortunately, this is not the first time my office has identified lack of oversight as a concern with boards,” Edelen said. “Hindsight is always 20/20 that more could’ve been done, but I hope school boards across the commonwealth heed these lessons to strengthen accountability in our public schools.”
This examination was the fourth in a continuing series by into school districts since last fall. He previously found problems in Kenton, Breathitt and Mason counties.
Edelen’s report has been referred to the FBI, Kentucky Teachers’ Retirement System, Kentucky Department of Revenue and Kentucky State Committee for School District Audits.
For more information, visit auditor.ky.gov and follow Auditor Edelen on Twitter, facebook.com/AuditorKY and youtube.com/AuditorKY. Call 1-800-KY-ALERT or visit online to report suspected waste and abuse.