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Audit: Hermitage district spent $158,000 improperly on construction Saturday, May 10, 2008 By Rob Moritz Arkansas News Bureau LITTLE ROCK - The Hermitage School District in southern Arkansas improperly spent nearly $158,000 over a two-year period on school construction projects, and more than half went to one contractor, an audit report released Friday showed. Former school superintendent John Jordan authorized and concealed many of the payments to the contractor, who was in violation of state law because he also was the district's construction superintendent, auditors told the Legislative Joint Auditing Committee. Another audit report showed nearly $47,000 from the Cabot School District's cafeteria meal sales were never deposited. The food service manager for Junior High South has resigned, and Cabot police and the Lonoke County prosecutor are investigating. The state Board of Education placed the Hermitage district on the fiscal distress list earlier this year because of a projected $110,000 budget deficit by the end of the school year. School patrons are to vote on a 5-mil increase to help reduce the district's debt on May 20. State auditor Paul McEachern told lawmakers Friday that Jordan notified auditors of the financial improprieties and his involvement in August. Jordan resigned in September. The audit findings have been turned over to the Bradley County prosecutor. McEachern said the audit did not determine if the former superintendent benefited financially. The district's current superintendent, Richard Rankin, told the committee internal controls have been added to prevent future spending problems and that all bids over $10,000 are now being properly bid. The district also is requiring bond equal to the amount of the contracts awarded and invoices are required before any payment is made, Rankin said. School district voters defeated a millage hike last year, but Rankin said voters this time understand the possible consequences of not passing the proposed increase this month. "They understand that with the situation we're in we really need to pass the millage to be able to continue with the school district," he said. The audit found, among other things, that Jordon paid Ederington Construction several times from fabricated invoices that concealed the district's payments to the company. Owner Jim Ederington also was the district's construction supervisor. Money was discovered missing from the Cabot district school lunch program by special software that records meal sales in the various cafeterias, auditors told legislators. Honora Walton, manager of food services at Junior High South, resigned in December. |
