The comptroller’s office released its report Tuesday morning on the investigation into accounting practices of employees at Elizabethton High School and the Athletic Department.
The report didn’t name individuals, but the school system had announced that co-athletic directors Eddie Pless and Mike Wilson were dismissed on April 2.
The investigation reported three findings:
• The Elizabethton High School Athletic Department had deficiencies with cash collections and disbursements from concessions and ticket sales;
• The Elizabethton High School bookkeeper used the school’s mail meter machine for personal use and maintained an unauthorized petty cash fund; and
• Some school support organizations had multiple operating deficiencies.
The report said the investigation revealed “questionable practices … which can be attributed to a lack of management oversight and the inadequate maintenance of accounting records.”
In the athletic department, the report said an athletic director made cash disbursements from concession sales from an EHS Christmas basketball tournament held in December 2017. The report said the disbursements were not in compliance with school system and state accounting policies.
The report said tournament workers did not properly perform cash counts of concessions and the athletic director did not maintain supporting documentation for cash disbursements.
The investigator said for that reason, “we could not verify the accuracy of collections and cash disbursements.” The report said the athletic director said the cash was used to pay tournament workers, pay for food and supplies and to make a cash donation of $700 to E-Town Express, the high school’s basketball booster club. That donation was returned.
The report said cash was also removed from ticket sales to an athletic event.
The report said the athletic director said purchasers paid for higher-priced adult tickets, but were issued lower-price student tickets. The money was used to make emergency purchases and pay for athletic event workers.
The report also said an athletic director maintained a petty cash fund in which there were no records of disbursements.
The report recommended that cash should not be withheld from ticket sales, concessions or other mass collections and used for cash disbursements. All purchases should be made by a purchase order, contract or prior arrangement by the principal for emergencies.
It said workers at athletic events should be paid by the school system through its payroll process, and that athletic directors should not keep petty cash funds.
It also said athletic tickets should be sold for the proper amounts and ticket sellers should count money and do reconciliation immediately after athletic events.
The report on the second finding said the school bookkeeper used the school’s mail meter to pay postage amounting to $197.88 for personal packages mailed to relatives. The report said the school prepays the U.S. Postal Service for postage and a vendor’s postage meter machine automatically deducts the correct amount of postage from the account.
According to the investigator’s record, 15 personal packages had been stamped using the school’s mail meter machine.
The report said when the shortage was discovered, the person offered to remit $167.03 to the director of schools. The bookkeeper told investigators she had been in charge of the money since she had been in her position and it was called a “slush fund” or “make it happen fund.”
The report recommended that a policy be established for the mail meter machine. The report said the bookkeeper’s employment was terminated on Jan. 16.
On the findings involving the school support organizations, the report recommended: “School support organizations should develop a written policy, which specifies reasonable procedures for accounting, controlling, and safeguarding any money, materials, or property collected or disbursed.”
In his response to the release of the report, Director of Schools Corey Gardenhour said in a press release that the initial discovery of the accounting problems had been uncovered by school district administrators, who conducted an internal investigation. Gardenhour said that at the end of the internal investigation, “the district acted proactively to address violations and deficiencies, particularly those that involved the collection, record-keeping, and disbursement of school funds.”
The district notified the comptroller’s office of the initial discovery.
Gardenhour said district and school officials will study the recommendations of the comptroller’s report, and will implement procedures and practices which have not already been put in place.
The complete report of the comptroller’s investigation is available online at goo.gl/smdi6M (www.comptroller.tn.gov/repository/ia/elizabethtoncityschools.pdf).