Auditor: Retiring teacher should not have been paid from grant

EAST PALESTINE – Severance paid to a retired East Palestine teacher should not have come from federal grant money awarded to the district in 2010.

The error was cited by Auditor of State Dave Yost in the school district’s annual audit. According to the report, the district used Ed Jobs money to pay the severance owed to a former art teacher after he retired in June of 2012.

The grant was not allowed to be used to cover the severance payment because the district did not have an indirect cost plan in place, Yost stated in the report.

“We recommend the district contact the Ohio Department of Education and notify them $8,099.53 was incorrectly spent,” he wrote.

District Treasurer Rick Ellis said he wasn’t aware the grant money could not be used that way and is waiting to hear back from the state before paying the money out of the general fund.

Teacher salaries and severance payments normally come out of the general fund.

Ellis said the district received about $358,000 in Ed Jobs money in 2010 and the one time federal grant expired on June 30, 2012.

During that time the district used the funding to pay the salaries of about six teachers, including the one who retired last year. The federal assistance was targeted toward retaining teaching positions that would otherwise be lost due to funding cuts.

Ellis said the funding did help the district avoid lay-offs.

He doesn’t anticipate lay-offs in the future since the grant funding is no longer available. The district saved money from several retirements last year.

Retirements included all three school principals and the superintendent, who were replaced by people brought on at lower salary scales.

“We did have a lot of staff retire last year. That helps our general fund balance some. Right now we aren’t looking at reductions,” he said.

Several teachers retired from the district in addition to the administrators. The district also benefitted financially from six teaching retirements in 2010, the same year the grant money was awarded.

Certified and classified staff are currently on salary freezes through this year, although a two percent increase on the base salary for all employees is scheduled to kick in next year, according to the district’s five-year financial forecast.

Ellis said the severance matter should be resolved in the near future.

The audit also revealed the district did not always certify funds properly, which resulted in money being spent over what was appropriated during fiscal year 2012.

Yost said 7 out of 38 expenditures audited were not properly certified by Ellis, and that exceeding appropriations is unlawful according to Ohio Revised Code.

The district exceeded appropriations and prior year carryover encumbrances in the Title I fund by $7,270 and the permanent improvement fund by $76,644, according to the audit report.

Ellis said funds were not properly certified because some things, such as educational supplies, were likely purchased by staff members before obtaining purchase orders.

Yost recommended in the report Ellis monitor the budget for all funds more closely and make necessary modifications throughout the year, if needed.

He also recommendation that in addition to the monthly bill list and financial summary reports provided to board of education members at each meeting they also receive the budget versus actual reports and monthly reconciliations.