A handful of Gene Brown Elementary School PTO officers failed to abide by several minimum state requirements for financial accountability – including using PTO funds for personal purchases – according to a recently released report by the state Comptroller’s Office.
The state office conducted an investigation of the school’s PTO after receiving allegations of malfeasance, according to a report released on Tuesday.
The investigation examined selected records for the period July 1, 2017 through Nov. 21, 2018, and found that the PTO failed to adopt or comply with several financial controls published in the Comptroller’s “Model Financial Policy for School Support Organizations - Procedures Manual,” or Model Financial Policy.
The Model Financial Policy outlines the minimum financial accountability controls that PTO officers must follow, according to the report.
The report noted four areas in which the PTO was deficient in following the minimum standards:
1. PTO officials failed to routinely review and reconcile bank statements. The Model Financial Policy requires that bank statements be reconciled, and that a copy of the bank statements and imaged checks be included in the minutes of PTO meetings, according to the report.
Since PTO officials didn’t comply with the policy, they failed to promptly identify several instances in which the PTO debit card was used for personal business.
For example, it was discovered that the PTO president inadvertently used the PTO debit card to make $80 in personal purchases in early September 2018, the report states. The PTO president told investigators that she immediately repaid the PTO for the personal charges after discovering the mistake. In addition, after reviewing prior-year bank records, investigators found an additional $176 in unexplained debit card transactions made by the president or treasurer to various payees, including Walgreens, Regal Cinemas, New Shackle Island Market, McDonalds and Chick-Fil-A.
“PTO officials stated that some of these transactions were also personal charges accidently charged to the PTO account,” the report states. “The PTO officials repaid these charges and stated that they would never authorize or knowingly allow personal use of PTO funds.”
2. The PTO didn’t acquire or retain invoices, vendor receipts, or other adequate supporting documentation for many disbursements. Excluding payments for teacher salaries and bank fees, PTO officials provided vendor receipts for only nine disbursements made during the 2017-2018 school year, according to the report.
The report also states that more than 25 percent of the disbursements were not supported with an invoice, receipt, or other adequate documentation for the first five months of the 2018-2019 school year.
3. PTO officials didn’t comply with requirements to adequately account for the proceeds of fundraising activities that included a fall festival and a gift brochure sale. As a result, investigators couldn’t verify the accuracy and completeness of the amounts PTO officials said they collected, according to the Comptroller’s investigation.
4. PTO officials failed to establish a policy to identify appropriate expenses for business meals and social events, and failed to include them in the PTO’s approved annual budget.
According to the report, PTO officials spent at least $226 from the PTO account for meals and social and celebratory events, including at least three meals at a local restaurant for officers and selected volunteers between April and August 2018.
An exhibit to the report shows a $90 expenditure to Dos Margaritas Mexican restaurant.
The report states that PTO bylaws require that the PTO treasurer “disburse funds according to the approved annual budget or as authorized by the Executive Board,” and to provide the executive board an account of all transactions.
“In order to improve accountability and provide increased transparency, PTO officials should develop a policy addressing permissible uses of PTO funds for officials’ meals and social events, including how that furthers the goals and objectives of the organization,” the report states.
The report also states that the PTO’s new officers - all of whom accepted their office as of May 2019 – have said they have corrected or intend to correct the deficiencies.
When asked if any of the deficiencies are considered criminal, John Dunn, communications director for the Comptroller’s Office, said that his office has forwarded its findings to the 18th Judicial District DA’s office.
“It would be up to the DA's office to comment on whether this could result in any criminal prosecution,” said Dunn.
“As the new school year begins, we hope the PTO will continue to focus on these issues and make any necessary improvements.”
18th Judicial District Attorney General Ray Whitley said his office would not bring criminal charges.
"From what I understand from the Comptroller's Office, there was no criminal intent," said Whitley.
Gene Brown PTO President Danielle Slack said the organization has an all-new board that is committed to financial accountability.
“We’ve put new practices and procedures in place to ensure there is accountability with how the finances are handled,” said Slack. The organization has a new set of bylaws, a new budget process and is holding meetings on a regular basis, she added.
Slack hopes more parents will become involved in the school’s PTO under the new leadership.
“The hope is that we’ll get a bigger PTO than we have had in the past, and that we’ll be able to bring some great experiences to our students.”