By Andy Sevilla
An internal investigation and outside audit of the Lehman High School Cheer Activity Fund found no evidence of theft or misappropriation. However, the report, compiled by Gibson Consulting Group, said it found that incomplete recordkeeping kept examiners from determining if all revenues were received and deposited or that all expenditures were appropriate and authorized.
According to the report by the Gibson Consulting Group, the lack of procedural compliance and financial reporting prevented the cheerleading activity fund managers from administering the fund effectively; and as a result, the fund accrued past due balances of more than $45,000.
Most of that debt was owed to Varsity, a uniform supplier.
Hays CISD spokesperson Tim Savoy told the Hays Free Press last fall that cheerleading club sponsors and campus bookkeepers manage campus activity funds. The fund’s immediate former sponsor and cheerleading head coach, Stacy Martinez, resigned that post shortly before the money probe began last August.
She still teaches English III at Lehman High, Savoy said, adding the resignation was not related to the investigation or audit.
The report doesn’t only place blame on the fund’s managers. Investigators found that the school’s principal, Michelle Chae, “should be held accountable for the enforcement of the (The Hays CISD Activity Funds Administration) manual,” which had not been done since the fund was started.
“Job description duties require principals to maintain fiscal control and to comply with district policies affecting the schools,” investigators stated in their findings and recommendations.
Chae noted in a memo to district administrators that 13 measures were offered to correct inadequate recordkeeping and unauthorized or improper transactions. She also stated that per a discussion she had with Hays Chief Financial Officer Annette Folmar, many steps have already been implemented.
The 333-page report’s major findings revealed that the Lehman Cheer Fund has not been managed in accordance with the Hays CISD Activity Fund Administration Manual. Also, in addition to procedural deficiencies, fund managers used Quicken software, which does not support the development of accounting records called for by the manual. The audit found that Quickbooks — a dual entry accounting system that can produce the required general ledgers and financial statements — is more appropriate for this business fund.
The major findings also concluded that due to the procedural deficiencies and lack of complete records, the audit team was not able to reconstruct the financial statements for the cheer fund.
That debt is what led the uniform vendor to complain to school officials that money was owed, and officials then began a probe, Savoy said.
An anonymous tipster told Hays Free Press last fall that school officials met with cheerleaders’ parents to inform them that tens of thousands of dollars were unaccounted for from the cheer fund.
At the time Savoy said the accounting discrepancy ranged from $20,000 to $50,000.
In an August 14, 2014 email, obtained through an open records request, Hays CISD Superintendent Mike McKie in part told the school board, “due to the amount of funds in question, it is essential that this remain confidential.”
The report states that not all cheerleaders get to attend, but all have to participate in the fundraising. Also, any cheerleaders chosen to attend the national competition were responsible for paying their own trip fees, totaling $735.
According to internal memos regarding the cheer fund accounting issues, Hays CISD reimbursed the Lehman’s School Activity Fund $52,962.83 for expenses needed to cover the cheer program.
Discrepancies identified in the audit report:
—Cheerleading uniforms were billed to students as estimates, and no real cost breakdown for each cheerleader was provided; estimates varied from $450.70 to $1,120.71. Uniform orders were made in bulk from the vendor and students were allowed to make several upgrades to the uniform.
—Various donations and fundraiser payments were credited to the specific student account rather than to the organization as a whole.
“There is no evidence to support the rationale for the allocation of these payments,” the report stated.
—Fund revenues should be accounted for at the fund level, and not allocated to individual cheerleaders, the report found. Also, various cheer fundraiser proceeds were used to fund sponsor costs for trips to the National Cheer Competition at Disney.
