ELIZABETHTON, TN (WJHL) – State auditors revealed in a report “operational deficiencies and missing funds” within Elizabethton City Schools.
The Tennessee Comptroller of the Treasury said it completed its investigation this morning. The comptroller’s office said the deficiencies were due to a lack of management oversight and inadequate accounting records.
Auditors said their investigation revealed the following:
- Elizabethton High School Athletic Department had deficiencies with cash collections and disbursements from concessions and ticket sales
- EHS bookkeeper used the school’s mail meter machine for personal use and maintained an unauthorized petty cash fund
- EHS support organizations had multiple operating deficiencies.
Elizabethton High School Athletic Department
Previously, state auditors investigated Elizabethton High School’s Athletic Department and focused on the time period between July 1, 2017 and February 28, 2018, after school officials reportedly discovered questionable practices. The investigation focused on practices by, then, athletic director Ed Pless and co-athletic director Mike Wilson. State auditors said they found that the athletic director at the time made, “cash disbursements from concession sales collections generated from an EHS Christmas basketball tournament held in December 2017.”
Auditors said the disbursements “were not in compliance” with school system policy or the state’s policy. In addition, auditors claim tournament workers did not perform cash counts of concession collections.
Auditors said they also uncovered that a second athletic director “withheld cash from athletic event ticket sales. The athletic director claimed the funds were used for emergency purchases and to pay athletic event workers… According to the athletic director, the cash withheld was replenished from an AD petty cash fund prior to completion of ticket reconciliations”.
The two employees were fired earlier this year on April 2.
Elizabethton High School Bookkeeper
EHS’ bookkeeper reportedly, between April 2016 and January 2018, used the school’s mail meter machine to pay postage totaling $197.88 for personal packages for relatives. State auditors said there was no record the bookkeeper reimbursed the school for the charges. EHS repays for the postage and uses a meter machine to stamp the postage amount.
The bookkeeper, after confronted, paid $167.03 to the director of schools. The bookkeeper reportedly stated, in a note with the funds “This is money that I have been in charge of for the time I have been in current position.” According to the state, the bookkeeper claimed that the funds, referred to as the “slush fund” or “make it happen fund,” was accumulated from unclaimed money at the school and purchases of postage from the school’s mail meter machine by faculty, staff, and herself. Auditors said she said school administrators were aware of the petty cash fund, and it was used to make small purchases including gift cards for teachers, coffee, etc. She reportedly claimed none of the petty cash was ever deposited with the school.
The bookkeeper was fired on January 16, 2018.
School Support Organizations
Auditors investigated three school support organizations and said their findings revealed they failed to “fully implement the model financial policy” resulting “in deficiencies in the organizations’ financial processes. The school support organizations that were investigated were the E-Town Express (an EHS basketball booster club), the Elizabethton High School Athletics Parents Organization (APO) and the Junior Cyclones Athletic Booster Club (JC) ( a T.A. Dugger Junior High School athletic booster club).
We’ve included the full state audit in this report. Click here to read it.
Auditors recommend the following in brief:
- Cash should not be withheld from ticket sales or concessions or other “mass collections”. Payments to athletic event workers should be paid by the school system through the payroll process. The state says, “Two individuals should prepare a written count of concession collections signed by both responsible individuals; then, the individuals should turn in the collections to the school cashier for a receipt and deposit.”
- A record of total collections must be created daily and two individuals should count the collections and prepare a count sheet signed by both people. The count sheet should be retained and filed by the treasurer.
- School support organizations develop a written policy for procedures for accounting, controlling and safeguarding any money, materials or property collected or disbursed.