Misspending, fraud alleged in school audit

By Ray Weikal

Matt Frye/Liberty Tribune
Former Liberty Public Schools Superintendent Phil Wright announces that he will file a lawsuit against the Liberty school district for the total amount he would have made during the remainder of his three-year contract after he says he was forced to resign earlier this year. The news was delivered July 9 during a press conference in front of the Charles Evans Wittaker U.S. Courthouse. See story Page A9.

An accounting firm’s investigation has revealed widespread financial abuse and mismanagement at Liberty Public Schools.

Westbrook & Co. released its audit during a Board of Education meeting Monday night, July 14, in a packed room at the district’s Administrative Center.

In front of about 200 people, certified public accountant Rick Westbrook outlined his firm’s findings. The report, compiled over about three months, included alleged credit card and reimbursement fraud, equipment misuse and improper project bidding procedures.

“We believe that the financial stability of your district has declined,” Westbrook said.

Westbrook’s report included 19 separate findings regarding possible credit card fraud. These included one instance of a bar tab, begun at 10:29 p.m. during a “recruiting” trip in Cedar Falls, Iowa, with charges of 14 pitchers of beer for six people.

“We noted charges for dining and alcoholic beverages late into one evening, with as many as 46 alcoholic beverages consumed during this one outing,” the report cites in another finding. “The payment of the tab was split between two administrators. It appears this may have been done in order to obscure the total cost of the outing.”

Specific names were removed from the audit by the Board of Education, Westbrook explained. Board members received the report on July 7.

Since financial abuse allegations surfaced earlier this year, former Superintendent Phil Wright resigned and Assistant Superintendent Steve Fleming and Director of Human Resources Jim Hammen were put on paid leave pending further investigation.

Allegations also implicated Wright’s predecessor, Scott Taveau. Westbrook’s audit contained several findings that strongly suggest a connection with Taveau. A $90,764 consulting agreement — the same amount known to have been paid to Taveau for six months of work after he retired — yielded no tangible value for the district, Westbrook said.

Questionable spending of bond revenue on capital improvement projects was perhaps the most troubling allegation raised by Westbrook. Project additions and sloppy spending controls led to cost overruns of about $14 million for work approved by bond votes in 1997, 2000 and 2004, Westbrook said. About $10 million more was spent on facilities over three years from a mystery fund — coded “988” — controlled directly by a “past administrator.”

“Adding items from a wish list after voter approval only insures that budgets will be overspent,” the report reads.

The Board of Education has already created or rewritten policies to address the allegations raised by the Westbrook audit, according to President John Sedlock. The district will also “request reimbursement from a retired superintendent” and consider possible action against Fleming and Hammen.

A planned investigation by the Missouri state auditor of the school district will cost about $30,000 and be completed by January 2009, Sedlock added.

- To read the complete audit report by Westbrook & Co., go to the Liberty Public Schools Web site, www.liberty.k12.mo.us.

School audit forum slated

Liberty school district patrons interested in finding out more about an audit released Monday, July 14, and the status of former Superintendent Scott Taveau’s retirement benefits are invited to an informal meeting from 1 to 3 p.m. Sunday, July 20, at the Liberty Community Center.

William Carlin Walker, a district resident who blew the whistle on top administrators’ questionable expenditures, will be on hand to answer questions and lead the discussion.

The audit by Westbrook & Co. reported thousands of dollars spent on alcohol, misuse of credit cards, circumvention of bids and millions of dollars in project overruns.

A letter from the Public School Retirement System indicated that Taveau and the district could be required to make restitution with interest to the system. School board President John Sedlock said the district would cooperate with PSRS.

— Angie Anaya Borgedalen

Staff writer Ray Weikal can be reached at 389-6637 or rayweikal@npgco.com.