The state's most recent audit findings give mostly good news for the Warren County School District.
The audit, released by the Pennsylvania Auditor General's office on Thursday, found the district has taken corrective action to fix five of six issues found in the previous state audit released in January.
However, the audit did find one previously identified issue that had not been resolved, although steps are being taken, and made an observation related to a questionable contract action in 2010.
State audits are done on a cyclic basis. The audit released Thursday examined a time period from Sept. 8, 2010 through June 21, 2013.
The audit found corrective action had been taken for problems related to errors in transportation pupil counts resulting in overpayments, internal control breakdowns resulting from a lack of managerial direction, internal control weaknesses related to documentation supporting reimbursements for transportation and supporting usage of tax exempt fuel, administrative weaknesses resulting in unverifiable Social Security and Medicare wages for the 2006-07 and 2007-08 school years and lack of documentation necessary to verify school bus driver qualifications.
According to the audit the district has implemented recommendations made in previous audits to come into compliance with relevant state laws, regulations, contracts, grant requirements and administrative procedures.
The audit did, however, find continued issues related to unverifiable Social Security and Medicare wages from the 2008-08 through 2011-12 school years.
To remedy the situation, the audit made six recommendations.
The district, in its included response, outlined a number of steps already being taken to correct the issue and cited a high rate of turnover hindering efforts to implement corrective steps sooner.
The audit also found issues relating to compensation upon the departure of the district's director of human resources near the end of her contract in 2010.
According to an observation in the audit, "The District Spent $28,268 on an employee severance package even though the employee's contract was terminating."
Specifically, "On Sept .10, 2007, the Warren County School District Board of School Directors voted to enter into an employment contract with an individual to serve as the district's director of human resources. The contract had a term of three years, from Sept. 11, 2007 through June 30, 2010. The contract provided compensation to the director of human resources of $85,000 in the first year, as well as a variety of benefits in accordance with the district's administrative compensation plan. Neither the contract nor the administrative compensation plan included any separation provisions nor did it provide for the payment of any unused sick or vacation days prior to retiring from the district.
"However, on May 10, 2010, the board approved the elimination of the position of director of human resources effective as of June 30, 2010. Shortly after this decision and two weeks before the end of the original contract, the board approved an agreement of separation that set forth the terms under which the director of human resources would leave the district's employment on June 30, 2010. Although it was approved by the board on June 14, 2010, this agreement was not included as an addendum in the official board meeting minutes nor was it made available to the public for review.
"Nevertheless, its purpose was outlined at the beginning of the document as follows, 'The employment agreement with the district expires on June 30, 2010, and due to a reorganization in the human resources department, the (director of human resources) position has been eliminated and the district will not be renewing the employment agreement. The parties desire to reach an agreement as to the terms of separation from employment in an amicable fashion and the district wishes to assist with transition to employment elsewhere.'"
"The agreement also included numerous stipulations regarding the benefits that the district would provide to the criteria relevant to the director of human resources after she left her position. The following provisions financially impacted the district:
'The district will continue to pay salary, in the usual bi-weekly installments, less lawful deductions, through and until Sept. 30, 2010. However, will no longer be entitled to the continuation of salary if she becomes employed. If that occurs, salary payments will cease immediately upon notice that she has been hired. In the event she receives notice of being hired in July, 2010, payments will continue until July 30, 2010.'
'The district will continue to pay health insurance coverage through Sept. 30, 2010. (The director of human resources) will continue to be responsible to contribute toward the premiums in the same amounts she paid at the time of her separation. The district's obligation to continue health insurance until Sept. 30th; however, will cease upon her receiving notice of her being hired by an employer that makes available to her health insurance coverage.'
"The director of human resources also acknowledged that, without the terms in the agreement, she would not have been entitled to any of the additional salary and health insurance benefits she received. Furthermore, she agreed, 'not to disclose any information regarding the cause, existence or substance of the agreement,' except to her attorney, other professional advisors, or spouse.
"The district paid the director of human resources $24,678 in salary and benefit costs for the period July 1, 2010 through Sept. 30, 2010. Additionally, on June 30, 2010, the district paid the director of human resources $3,590 for unused vacation days even though this expense was not part of the agreement on the original contract.
"The district's taxpayers paid $28,268 to an employee whose board-approved contract was terminating and had no need for any agreement in order to terminate the employee/employer relationship. Moreover, the district paid her $3,590 in unused vacation days even though doing so was not required by either the agreement or her original contract. This is money that would have been better spent on the education of the district's students. At the very least, the district should have been more open with the public regarding why such a payment was necessary, and it should have explained how the expense benefited the district's taxpayers."
The district responded within the audit but District Board President Arthur Stewart took time to offer additional comment following Thursday night's board meeting.
"We have a completely different administrative team in place since that audited period and the board is very conscious of those problems, but we were very conscious when they were occurring," Stewart said. "Those problem areas were areas that we asked the new team to focus on and by our own judgment, as well as more recent internal and external audit processes, there has been significant improvement."
The full audit can be found on the Pennsylvania Auditor General's website at www.auditorgen.state.pa.us/Reports/School/schWarrenCountySchoolDistrict111913.pdf.