Funds misspent, school audit finds; Money for kids used for love seat, locksmith

By Joshua Benton
Staff Writer

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A baritone horn from a pawnshop. A $7,700 set of murals. A pizza crisper, cookie-dough scoops, and a Queen Anne love seat for the principal’s office.

According to state auditors, those are some of the ways Wilmer-Hutchins officials spent more than $270,000 in federal education funds – money that was supposed to pay for reading and math instruction for the district’s weakest students.

In addition, the audit found that Wilmer-Hutchins officials defrauded state taxpayers of about $185,000 by overstating the number of students they were instructing.

It also found evidence of gross misspending on things like computers and TV sets – all at a time when district officials complained the state was not giving them enough money to operate schools.

“I wish there was a way that these people could receive an indictment for each child in this district,” said former board member Joan Bonner, who was a frequent critic of Wilmer-Hutchins’ administration during the 2003-04 school year, the period the Texas Education Agency audit examined.

“There are 2,700 students they hurt, and they should be punished for each one.”

Eugene Young, who took over as the district’s state-appointed superintendent in June, said this week that the district did not dispute the findings or the $455,000 it now must repay state and federal governments. “We owe the money, and it will be paid,” he said.

The biggest problems outlined in the audit related to the improper spending of three pools of federal funding: Title I money, which is aimed at schools with high concentrations of poor students; school improvement money, which goes to schools that have had low test scores for several consecutive years; and special-education money.

All three types of funds are supposed to be used strictly for academic purposes or, in the case of special-ed dollars, for the purchase of equipment designed for children with disabilities.

Instead, school improvement dollars dedicated to Kennedy-Curry Middle bought several pieces of furniture for the principal’s office: a $422 chair-and-pillow combination, a $1,094 bookcase and a $509 Queen Anne love seat.

Money from that fund also bought a $1,155 custom-made mat for the school’s entry, $958 worth of furniture for the teacher’s lounge, and a $2,029 keyboard for playing music in the school gym. In all, nearly $54,000 was spent improperly at Kennedy-Curry, according to the audit report.

Special-ed funds were used to pay an electrician working at Wilmer-Hutchins High and to buy a software package the district didn’t have any computers capable of running.

The Title I money went to a range of kitchen, athletic and construction equipment, including basketballs, trumpets, spatulas, serving tongs, Sheetrock and caulk. More than $600 went to a locksmith who changed locks on classrooms.

District personnel told audit investigators they were sometimes told to alter the books to shift the funding source for items from the general fund to the federal money “because there were insufficient funds available in the general fund.” By the end of the 2003-04 school year, Wilmer-Hutchins was completely broke, unable to pay its bills on time for the opening of school last fall.

“It’s this kind of activity that led them to financial collapse,” TEA spokesman Suzanne Marchman said.

Wilmer-Hutchins didn’t have enough money to open its doors this fall; its students are bused to Dallas each morning.

The improper use of federal funds could put district personnel in trouble with federal authorities. Last September, a team of FBI agents raided the district’s offices – the second such raid in the last decade. No federal charges have been filed in the investigation. An FBI spokeswoman was unavailable for comment.

Ms. Bonner said she hopes officials are indicted and that those who spent educational funds on loveseats and bronze statues will be forced to repay the money themselves.

“I don’t care if they have to sell a kidney, they need to pay this money back,” she said. “We know they don’t have a heart or a brain, but a kidney might be usable.”

The faked attendance data has been suspected since an inquiry began last fall. The audit found that that district officials intentionally inflated the number of students in attendance every day as a way to get the district more state money than it deserved.

Auditors found that teachers were specifically told not to mark students absent even if they stayed home. Even when teachers did mark a child absent, office personnel sometimes changed that marking before forwarding.

Texas public schools are funded based on how many students they enroll and how many days those students actually attend. If a student skips school, the campus doesn’t receive money for the absence. Auditors say the fraudulent reporting led to Wilmer-Hutchins receiving $185,000 in state tax dollars it did not deserve.

The alleged tampering led to the indictment of the district’s former superintendent, Charles Matthews, in March. The charge is a second-degree felony carrying a potential sentence of 20 years in prison and a $10,000 fine. Dr. Matthews, through his attorney, has denied the charges.

In 2003-04, the year of the alleged fraud, Wilmer-Hutchins’ attendance rate was 95.4 percent, up almost two percentage points from the year before. But it’s possible even the earlier year’s data may have problems. In 2002-03, Wilmer-Hutchins had the largest increase in its attendance rate of any independent school district in Texas.

Dr. Matthews had a personal financial incentive to boost attendance rates.

According to his employment contract, he would have received a bonus of nearly $9,000 if every school in the district reported an attendance rate of 95 percent or better. In 2003-04, seven of the district’s 10 campuses met that level.

One obvious sign of the attendance fraud, according to auditors: All the seniors at Wilmer-Hutchins High School were still marked present for three days after graduation, even though no senior classes were held.

The audit also found several other problems:

*The district did a poor job tracking its equipment.

It spent $1,953 on handheld computers that never arrived. It bought a number of new TVs in 2004 despite having 19 new sets sitting untouched, still in their boxes, in a storage room.

*The district had no tracking system for most of its equipment – including 20 laptop computers that were stolen, allegedly by an employee. Auditors found several former employees who still possessed district equipment.

*Wilmer-Hutchins did not track the travel costs of its employees or board members.

On several occasions, employees and board members were given advance checks for travel expenses but not required to show receipts to prove the money had been spent on district business.