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Audit Released in Fund-Stealing Case Against College Prep Academy Superintendent, Treasurer
CINCINNATI -- Officials at Cincinnati College Preparatory Academy misused nearly $520,000 of taxpayer money on Bengals season tickets, travel, bonuses, Christmas parties and gifts, personal expenses and more, according to a special state audit released Tuesday.
The findings in the audit led to the indictments of former Superintendent Dr. Lisa Hamm and former Treasurer Stephanie Millard.
“These school officials tried to charge their fancy-schmancy lifestyle to taxpayers,” Auditor of State Dave Yost said. “The extent of their misdeeds is astonishing, but the good work of our auditors and investigators has put them to a stop.”
Hamm and Millard were indicted in March and accused of spending more than $148,000 in school funds on trips for their personal benefit. But their misspending extended much further, according to the new report by Yost.
The 49-page audit on the Cincinnati charter school found $340,800 in improper charges on the school’s credit card, along with $164,247 in other improper disbursements.
The audit said Hamm and Millard were accountable in “virtually every instance.”
The audit cited a “general lack of internal control” by the CCPA Board of Directors that allowed the misspending to go on. Some improper expenses were even authorized by the governing board, the audit said.
The review found many instances of improper use of school credit cards, leading to 17 findings for recovery totaling $340,800. These charges included purchases of alcohol, theater tickets, concert tickets and clothing during trips to Chicago, New York, Europe and other locations. In addition, CCPA paid $1,642 for lawn care services and magazine and newspaper delivery to Hamm’s private residence.
Another 11 findings for recovery totaling $164,247 were issued for inappropriate expenditures not made with a credit card. The school paid $26,259 in property taxes for LKH Victory Corp., a private legal entity in which Hamm is president. Additionally, CCPA purchased season tickets to theater productions and pro football games for use as staff incentives, the report said.
Most of these findings were issued against Hamm and Millard, the audit said.
Many expenses appeared to have benefited only a certain group of CCPA employees, including the superintendent, the superintendent’s father, the principal, the vice principal, the contracted treasurer,
and various administrative staff, the audit noted.
The audit covered July 1, 2006 to May 31, 2010. An anonymous tip to the state auditor’s office led to an investigation, the report said.
Hamm and Millard were indicted on March 6, 2013 on 26 charges of theft in office, unauthorized use of property, tampering with evidence and tampering with records. The CCPA Board of Directors fired Hamm and Millard on March 18, 2013.
Yost also issued findings for recovery of :
> $12,377 against relatives of Hamm who were school employees but were compensated amounts greater than approved by the school’s governing board.
> $1,675 against an employee for receiving duplicate payments for the same pay period.
> $400 against Millard for Christmas bonuses received each of the years audited. Millard’s contract contained no provisions entitling her to such bonuses or benefits, Yost reported.
Other examples of abuse of public funds noted in Yost’s report include:
> Christmas bonuses to employees totaling $47,400.
> The governing board approved expending public funds for staff Christmas gifts each year with totals ranging from $5,000 to $10,000. For 2009 alone, the governing board approved Christmas bonuses, banquet expenses, and staff gifts of up to $30,000.
> The school purchased Nutri-System weight loss meals totaling $4,663 for staff lunches.
> The school catered its monthly board meetings costing $11,226 during the audit period.
> As a student incentive, the school expended $4,000 of public funds to rent suites at U.S. Bank Arena for Taylor Swift and Justin Bieber concerts. And as another student incentive, the school expended $2,157 to rent a suite at the Bank of Kentucky Center for a Cirque du Soleil show. In addition to the suite rentals, the purchased food in the suite for the Taylor Swift concert totaling $1,521 and Cirque du Soleil show totaling $881. The governing board approved none of these events.
> Hamm and Millard also reportedly spent money from the school on trips to Chicago, sightseeing tours through California and Europe and a trip to Boston to see Oprah.
Details of the indictment include nine of the most egregious trips, the auditor's office reports. In total there were more than 20 trips Hamm took with staff and family members.
Among the trips that were part of the indictment included a $20,000, 10-day tour through California in a rental car with a hired driver, meals and hotel stays. Other details include a proposed trip to see Chicago charter schools where Hamm and other staff saw Tina Turner in concert, according to the report, and a trip to Europe with staff where Hamm was supposed to secure residency.
According to the charges brought against Hamm and Millard, most trips were listed as taken for either training purposes or "best practice visits" to other schools that often exceeded the time and spending limit set by the school's board.
The audit cited thousands of cases of improper bookkeeping:
> 1,153 credit card transactions totaling $203,685 with no receipt to support the charge.
> 455 credit card transactions with only a summary receipt to support the charge.
> 52 hotel charges for such items as meals, room service, and gift shop purchases that did not have a receipt to support the expense.
> 2,825 checks for which there was either no accompanying purchase order or invoice and supporting documentation
> 532 electronic bank withdrawals with no supporting documentation
Yost said the auditor’s office made nine management recommendations intended to improve CCPA’s internal control and monitoring of its expenses. The recommendations relate to the areas of credit card, travel and asset policies; gift card purchases; personal use of credit cards; items delivered to the superintendent’s personal residence; documentation supporting student outings; authorized trip attendees; and cash used for travel expenses.
Courtesy of ABC 9.
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