While the recent report by the Office of the State Auditor focused its attention on the actions of former school superintendent Shelton Jefferies, the investigation also revealed other related issues within the school district — issues that school district leaders say have since been corrected.
The actions of the school board, specifically that of former chairpersons of the board, and the actions of at least one former chief finance officer for the school district also came under scrutiny as well as board policies that helped allow the financial misdealings to go on uncorrected for so long, the report noted.
“The former superintendent of Nash County Public Schools violated his contract and multiple policies and procedures related to use of his procurement card and a school system vehicle. As a result, the school system paid $45,690 in unallowed and questionable expenses that may have been more appropriately used for valid school purpose,” the report stated. “Additionally, the superintendent fostered an environment in which such violations are acceptable.”
Details about these questionable expenses by Jefferies, who served as school superintendent from Jan. 4, 2016, until Aug. 2, 2019, were first reported by the Rocky Mount Telegram in April 2019.
The allegations were later validated and expanded in the report by the Office of the State Auditor released on June 15 of this year.
However, the auditor’s report also lays some of the blame at the feet of others in the school district.
“The violations were undetected because of a lack of review and oversight by the former chairs of the school system’s board of education and the former chief finance officer,” the report said.
During the time that Jefferies served as superintendent of what was then known as Nash-Rocky Mount Public Schools, four different board members served as chairpersons, according to information provided upon request by the school district.
Reginald Silver was the chairman of the board in 2016, when Jefferies’ expenditures seemed more in line with school district policies.
Wendy Wilson served as board chairwoman in 2017. It was later in that year that Jefferies’ use of travel expenses began to escalate just prior and after Jefferies purchased a family home in the Charlotte metro area in February 2018 and began using a school fleet vehicle to travel to that home.
In the 2016-17 school year, that district-owned vehicle was used 86 days by Jefferies. In the 2017-18 school year, it was used 272 days — which indicates it had to have been used on weekends as well as weekdays, and it never rested for holidays or vacations.
Ann Edge, who died of cancer in April 2020, served as chairwoman of the board in 2018. Franklin Lamm, the current board chairman, served as vice chairman that year, filling in several times when Edge was not able to be present at the meeting.
“During interviews with former board chairs, it became clear that from February 2016 through October 2018, they were unaware of their responsibility to review the superintendent’s expenses,” the audit report states. “Therefore, the former board chairs did not review the expenses submitted by the superintendent.”
That changed late in 2018 when it appears that Lamm began to note the irregularities.
“Beginning in October 2018, the acting board chair began reviewing the expenses and brought some concerns to the board’s attorney. According to the board chair, he had concerns regarding some of the expenses, but approved the expenses anyway,” the report said.
As the report notes, Lamm did ultimately contact the board attorneys the following spring and asked them to conduct an investigation of the issue. In a letter written by the law firm dated June 10, attorney of record Lindsay Vance Smith wrote:
“In the spring of 2019, the board received a report that school system procurement cards and district vehicles had been used for unauthorized purposes. In response to this report, the board directed our firm to investigate these reports and to provide the board with a report of the findings of our investigation,” the letter said.
Those findings were reported to the school board on April 1, 2019.
“In response to this report, the board, through its chair and vice chair at the time, communicated in writing with Dr. Jefferies, multiple times over the next few months, regarding the concerns that had been identified and provided specific directives for the implementation of protocols regarding the use of procurement cards,” the letter continued.
Jefferies resigned as superintendent of the school system effective Aug. 2, 2019, the letter notes.
The report by the Office of the State Auditor also noted that the finance director of the school district should have caught the improper use of the funds. While Wood will not name either the board chairman or the CFO who testified citing promised anonymity, there were only two finance directors who served the school district during Jefferies’ tenure: Susan Blackwell, who resigned effective June 2018, and Sheila Wallace, who was hired as an interim CFO until current CFO Joyce Jarrett was hired in July 2019.
However, the CFO who was interviewed by Wood and her team said she felt like she was intimidated into going along with the misuse of funds.
In her report, Wood noted: “The superintendent’s violation of his contract, policies and procedures was also not detected because the CFO failed to provide proper oversight of the procurement card program. Despite noticing repeated violations by the superintendent, including failing to submit transactions to the board chairs for review, the CFO did not revoke the superintendent’s procurement card. She processed payments for the procurement card without question. She stated, ‘My job was on the line. I felt like if I went in and told him (the superintendent) this needed board approval, he would find a way to get rid of me.’”
Jarrett, the current CFO, said she noted these issues with the procurement cards soon after arriving on the job and set up ways to correct the problem for the future.
“Shortly after joining the school system, I raised concerns about the school system’s use of procurement cards and began working with the then-interim Superintendent Del Burns to develop and implement significant changes to the use of procurement cards,” Jarrett said in her affidavit to the Office of the State Auditor. “These procedures were implemented by Aug. 31, 2019, and were presented to the Board of Education at its Sept. 12, 2019 meeting.”
The letter written last week by the law firm hired by the school board indicates that these and other procedures have been put in place to prevent such mishandling of funds in the future.
“In its contract with its current superintendent, the board expressly clarified that the superintendent will not have use of a school system vehicle. The board further clarified this expectation verbally to its superintendent, and the superintendent has not used a school system vehicle during his tenure,” the letter said.
The school board has worked hard to protect school system resources, the letter said.
“The board takes seriously the findings of the state auditor and believes it has put in place robust protections to ensure that all purchases made through procurement cards are adequately supported and constitute an appropriate use of the school system’s resources. Moreover, the board chair continues to work proactively with the school system’s administration to ensure that all procedures are being followed with fidelity,” the letter said.
In accordance with the recommendation of the Office of the State Auditor, the school board also is seeking repayment from Jefferies for the $45,690 that was misspent.
For a look at the complete audit report, go to https://www.auditor.nc.gov/EPSWeb/reports/investigative/INV-2021-0335.pdf.