By Sally Absher
Last Wednesday during the regular KCS BOE meeting, Amber Rountree initiated a request for an external forensic audit of the Knox County Schools credit cards.
Rountree made the request after seeing media reports detailing the termination of Roger Underwood, the district’s accounts payable supervisor. Underwood admitted to using KCS credit cards for personal use on at least two separate occasions. He is under investigation by state and local officials.
WBIR reported that a review of documents received from KCS under the state open-records act showed that during the past year, the school system did not pay its credit cards on time, nor did it pay off the full balance, leaving taxpayers on the hook for late fees and finance charges. In addition, the school system is still months behind on its current credit card payments.
And there is more. According to WBIR’s Mike Donila, “School officials who use the cards often pay sales taxes that government entities are exempt from paying. Some credit card users also charge items that Bob Thomas, assistant schools superintendent of administrative services, indicated are not allowed. And, the cards in some instances were used to make personal purchases, which employees would then reimburse – something that is against county policy.”
Rountree offered a substitute motion, amending an item requesting a School Nutrition Department Audit by adding to it a “request to the Knox County Audit Committee to conduct an external forensic audit of the Knox County Schools credit cards going back five years, using Pugh and Company, the county’s external auditor.”
The BOE action followed a KCS press release last Wednesday morning stating, “Knox County Schools finance personnel have made arrangements to inactivate and cancel all six school system credit cards, and have asked to participate exclusively in Knox County’s electronic commerce card (“e-card”) and travel card program. The move comes in response to admitted misuse of a school system credit card by an employee.”
It was also learned on Wednesday that Knox County Commission Chairman Brad Anders has called for “an immediate audit” of KCS credit card use.
Usually such announcements come through the Commission secretary Jolie Bonavita. But oddly, Anders posted the announcement on the Commission’s online forum. He wrote, “After speaking with Andrea, we have concluded that it would best for her to begin developing the audit of Knox County Schools meals program and also their P-Card controls.”
Andrea is Andrea Addis, the Knox County internal auditor.
He added, “So that we did not over step rules of the Audit Charter, we consulted the Law Director and Deputy Director to make sure we were in compliance and they agreed with our thought process and the need to begin the work now.”
According to Chairman Anders, “we felt that due to the exigency of the issues she should go ahead and begin the work.” It was important to move quickly on the audit, according to his note, which required superseding the authority of the Commission Audit Committee. So Anders used his authority as chairman to order the audit directly.
How can the Commission Chairman usurp both the Audit Committee and the Commission? Where else in the TCA or charter does the chair of a charter county have this kind of power? The Commission has approved an internal audit of the nutrition department, but has not voted on the credit card audit.
This is the third audit of school accounts that has been requested this year alone. Clearly someone is asleep at the helm, or worse. As Director of Schools, Dr. McIntyre has ultimate authority for the financial integrity of the school system.
Of course, none of this would be necessary if the Superintendent had followed statute. Armstrong said, “The statutory way to approach this is if there is a concern, the director of schools should approach County Commission and make a report that certain things are at hand, and they in turn would refer it to the audit committee…” That didn’t happen.
Rountree said, “That is the reason I wanted to just add it, due to it being in the news and wanting to make sure that it was done in an expedient and timely manner.”
Lynne Fugate said, “I agree with you Ms. Rountree – it is urgent and we need to do it.”
Dr. McIntyre, who was clearly rattled by Rountree’s motion, expressed concern about naming a specific vendor in the motion. Rountree pointed out that Pugh and Company is the company the county already has under contract to conduct external auditing.
Armstrong said it makes no difference if the auditor is enumerated or not. He explained, “You are requesting the audit committee or commission to consider an audit.” He added it is okay to be specific in the request. “They won’t know what you want unless you specify it.”
After the board voted, Lynne Fugate, somewhat confused, asked if it was the amendment, or the motion, that was approved.
Carson, donning her snarky legal eagle hat, said, “generally that is what you would do, approve an amendment and then approve the motion, but sometimes we just suspend all rules and do whatever we want.”
The board voted again, specifically on the motion, which they unanimously approved.
On Friday, BOE Chair Mike McMillan sent a letter to Commission Chairman Brad Anders, Knox County Audit Committee Chairman Dr. Joseph Carcello, and Mayor Tim Burchett, stating that the BOE had voted unanimously to request that Pugh and Company, the external auditors for Knox County, conduct an external forensic audit of Knox County Schools credit cards going back five years.
McMillan asked that the audit, which was previously assigned to the Knox County internal auditor, be changed to the external auditor Pugh and Company per the vote of the BOE.
An emergency meeting of the Audit Committee to discuss the audits of the KCS nutrition office and the school credit cards is scheduled for today.