Updated: State Auditor Releases Results of Indian River School D - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Updated: State Auditor Releases Results of Indian River School District Probe

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DOVER, Del. (WBOC/AP)- Delaware's state auditor has released the results of a months-long probe into the handling of finances in a Sussex County school district.
    
Auditor Tom Wagner on Thursday released a 29-page report detailing the results of an audit of the Indian River School District.

According to the report, the investigation found the school district lacked formal policies and procedures for any of its financial processes. The report further went on to say: 

Not only did the district lack appropriate oversight and internal controls to prevent and detect financial improprieties, the blind faith placed in the CFO allowed him to create an environment ripe with intimidation tactics, favoritism, and nepotism. 

Examples of financial improprieties included the purchase of gifts for employees and large payments to organizations where the district's former CFO, Patrick Miller, served on the Board of Directors, according to the report.

Miller, was put on paid administrative leave in April. He later retired effective June 30. The school district has not disclosed what led to the state audit or Miller's resignation. However, the Office of Auditor of Accounts said in the report that it launched its investigation after in January it received various complaints that alleged financial misconduct by Miller. The district also had human resource-related concerns about its business office, which was supervised by the CFO, according to the report. 

In addition, the AOA identified several types of purchases that were deemed inappropriate or questionable based on a lack of supporting documentation.

"These purchases included a Teacher of the Year ceremony held at Baywood Greens for approximately $7,000, Alex and Ani bracelets totaling $352.80 for certain District Office staff, and a Tiffany & Co. bracelet for $380 as recognition gift to the superintendent," according to the report. The report also found the CFO (Miller) made $20,343.40 and $32,500 in payments to the Indian River Volunteer Fire Company and the Boys & Girls Club of Oak Orchard/Riverdale, respectively. The CFO served as board president for both of these organizations, the report stated. 

Another part of the audit details the charges of meals purchased during a conference attended by Miller and three other employees. 

"One meal, totaling $358.87, was at a Ruth's Chris Steak House for four District employees, which equated to $89.72 per person. While not formally documented, the District's travel meal policy was approximately $46 per person per day. One employee on that trip stated that she knew the total bill exceeded the District's daily meal limit so she gave the CFO $300 for the meal. However, the documentation showed the CFO was reimbursed for the full amount of the meal."

The audit says district employees said their travel receipts were scrutinized by Miller and sometimes reduced for small infractions.

State Auditor Tom Wagner told WBOC this behavior is the result of unchecked power. 

"One person cannot have too much strength over the operations of an agency," he said.

Miller previously served as business manager for the Brandywine School District in New Castle County. He resigned from that position in 1998 and later pleaded no contest to tampering with public records.   

The auditor's report comes in advance of a Tuesday referendum in which Indian River district residents will vote on a proposed tax increase. WBOC spoke to people who will vote in that referendum, who were split on whether the audit will change the way they vote.

Rosemary Brown says she will vote no as a result of this report.

"I just don't feel right after what I read," she said. "They're just using the money inappropriately, and I think and it should be kept in there for resources for our children." 

Tasha Nock has three sons in the district and will vote for the referendum, saying it'll provide great resources for children.

"It's not [the district's fault," she said. "They didn't really know how he was and what he would do with the money. So no, I wouldn't distrust the district at all."

Noting how the district has "expressed ongoing budget concerns," the auditor's report said, "With the assistance of the new, experienced director of business, AOA encourages the district to develop sound operating practices and scrutinize purchases to ensure they are good stewards of taxpayer dollars while still maximizing benefits to students."

In a request for comment, Indian River School District Superintendent Dr. Susan Bunting told WBOC, "

The Indian River School District has submitted its response to the state auditor’s preliminary findings but has not yet reviewed the auditor’s final report or Mr. Wagner’s remarks concerning the special investigation. Therefore, district officials will withhold comment until their official media briefing on Friday morning.

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