Audit originated after Providence Creek raised concerns
Jan 29th, 2016 · by Ashton Brown · Comments:
DOVER — An audit of Providence Creek Academy Charter School released by the Delaware Auditor's office this week found nearly a quarter of a million dollars was misspent during a three-and-a-half-year period.
"Our inspection identified over $247,000 in various personal purchases, unsupported transactions, and noncompliance from July 1, 2011, through Dec. 31, 2014," said State Auditor Thomas R. Wagner.
Red flags initially were raised in the fall of 2014 when the academy evaluated its own funds.
"We looked at the PCard statement and saw several things without proper documentation and knew it needed to be investigated," said Chuck Taylor, head of school at Providence Creek.
The PCard, or state procurement card, is a Visa card through JPMorgan Chase issued to state organizations for procurement and travel expenses.
When Providence Creek recognized the irregularities, the school's next step was to conduct an internal audit which was completed by SB & Co.
Tom Wagner
"When charter schools conduct an internal audit like this, we aren't given access to all the information or communications," Mr. Wagner said. "In this kind of situation the school is the audit firm's client, not the state, so what happens between the two can stay between them."
According to the Office of the Auditor of Accounts, SB & Co. issued "unqualified opinions," finding no problems with the finances.
However, Providence Creek informed the Department of Education about its concerns and requested a state audit.
Academy officials called the Office of the Auditor of Accounts in late 2014 regarding allegedly inappropriate handling of school funds they associated with Shanna Simmens, the school's former finance and human resource manager.
"Our rule of thumb for conducting an audit is to follow tips that can be verified, usually in the form of documentation," Mr. Wagner said. "And this wasn't just a simple accusation, it was something concrete we needed to follow through with."
The state's audit determined that more than $11,000 was used for a trip to Las Vegas and Ms. Simmens' personal payments for bills such as utilities, timeshares and traffic tickets, among other purchases.
For the Las Vegas trip, four Providence Creek representatives arrived in Nevada three days before the 2014 National Charter School Conference. In the three days before the conference, the employees charged alcohol, MGM Grand Comedy Club tickets and admission to the Mandalay Bay Resort and Casino's beach to the school.
"When we do an audit, it's much more than looking at receipts," Mr. Wagner said. "Seeing where a purchase was made isn't enough. We look into each item purchased and whether or not it was used for a legitimate expense."
For example, nearly $800 was paid to a business technology support company and documented as payment for a classroom LCD projector. But upon further research, it was found the business does not sell projectors.
Although all expenditures are evaluated, an additional $20,609 couldn't be proven as legitimate business purchases but couldn't be definitely attributed to personal expenses.
The bulk of funds were spent on unsupported Providence Creek salaries paid to current and former employees along with individuals allegedly close to Ms. Simmens. The total of unsupported salaries paid was around $215,000.
Mr. Wagner said a portion of the salaries may have been legitimate but not properly documented. More can only be known once he sits down with school officials.
"The thing is that at charter schools, salaries and things of that nature can be a lot more fluid than what you may have at a public school," he said. "Some teachers at PCA may have been offered a raise and that may have been changed on the payroll but not documented, and that's something that wouldn't happen at a public school."
Oversight and following protocol are areas where Mr. Wagner said charter schools lack resources.
"Charter schools are a wonderful thing because there is a smaller administration so there can be a heavy focus on academics, which is great for the students," he said. "But at the same time the smaller administration needs to handle the same amount of work as a full-sized administration. So you're going to have people wearing a lot of different hats and that can lead to poor internal controls."
Since Ms. Simmens' termination in December 2014, Mr. Taylor said Providence Creek has taken measures to better define positions and their responsibilities to prevent any future financial debacles.
"We had some policies at the time that may have been a little loose but we've tightened job descriptions by redefining them and better specified the skill sets required for those jobs," he said.
"And we've also added a Board Oversight Committee that meets quarterly to conduct evaluations."
Providence Creek officials have yet to have a chance to sit down with the auditor to discuss the exact findings, but they are in the process of coordinating a meeting with Mr. Wagner and Kathleen Davies, chief administrative auditor.
"I think once we sit down together, we will be able to get to the bottom of a few issues, especially the salaries and we'll be able to offer additional help to prevent anything like this from happening in the future," Mr. Wagner said.
"To put it in a nutshell, PCA's problems are easily fixable."
Former Delaware State News staff writer Ashton Brown