Audit questions Wyoming Department of Education management under Cindy Hill

A state audit released Tuesday spotted inappropriate overtime payments, ineffective oversight and employees paid out of the wrong budgets at the Wyoming Department of Education in fiscal year 2013.

The state audit covered $949 million in federal funds granted to Wyoming either directly or by pass-through agencies between July 2012 and June 2013. 

Of the audit’s 17 findings and questioned costs, nine of them were directed toward the Wyoming Department of Education.

The audit recommended further review by the state attorney general and the U.S. Department of Education and said the state may have to pay back an undetermined amount of federal funds.

For seven of the 12 months in the audit, which reviewed federal funds handled by Wyoming agencies, the department of education was under the leadership of Superintendent of Public Instruction Cindy Hill.

A 2013 law replaced Hill with an appointed director of the department, which employs 115 people. Hill was left with several ceremonial duties in the newly created Office of the Superintendent of Public Instruction, which now employs eight full-time employees and has a budget of about $2.3 million. 

The Wyoming Supreme Court overturned the 2013 law as unconstitutional earlier this year. Hill plans to resume her duties as head of the department of education once the case’s remaining legal issues are resolved.

The audit said internal control at the department was compromised on multiple occasions during fiscal year 2013. The total amount of questioned costs as a result is unknown, the report said.

“[M]anagement decisions were made that were not allowable or advisable and overrides were directed to Finance staff to cut through steps that were considered bureaucracy,” the report’s authors said.

The independent auditors who conducted the audit are not permitted to determine whether laws were broken. That determination must be made by the attorney general’s office.

WDE finance staff members are meeting to review and strengthen internal controls, Chief Financial Officer Dianne Bailey said. 

It is creating a communications protocol to allow employees to reach out to other agencies with expertise or authority to verify financial decisions, she said. If a questioned cost or budget move is overriden by management, the WDE’s finance division will now contact the Wyoming Attorney General’s Office for an opinion and the Department of Audit and Governor’s Office will be alerted, the audit said. Training on the process will be provided.

Reaction

Renny MacKay, spokesman for Gov. Matt Mead, told The Associated Press that the governor found the audit “troubling” and that he hoped Hill could explain “how these actions took place.”

House Speaker Tom Lubnau, R-Gillette, also speaking to the AP, said the audit confirms testimony from agency staff members of the abuses that occurred when Hill ran the agency in 2011 and 2012 and underscores why lawmakers removed her as head of the agency in 2013.

“When was the last time you read a federal audit report that said an elected official was misspending money?” Lubnau said in a telephone interview. “I think it’s an exclamation point on a problem that we already knew was there.”

Meanwhile, a House committee investigating whether Hill committed any impeachable offenses remains active.

Lubnau, who chairs the panel, said the audit would be reviewed by the investigative panel. “After the committee members have an opportunity to read and digest the report, then we’ll figure out what the next steps are,” he said.

The audit is required by the federal government to account for how states spend federal money. It is paid for by the state.

Unregulated grants

Several other federal grants went partly unregulated at the department of education during the 2013 fiscal year, according to the report.

The audit said the department did not have effective systems in place to monitor all requirements of several Title I and special education grants. It recommended the department implement a system where requirements are actively monitored to make sure federal funds remain in compliance.

Another finding spotted a deficiency in the amount of funds the WDE should have expended to meet a federal matching requirement under a career and technical education grant during fiscal year 2013.

The audit said the WDE should have spent $26,335 to ensure the grant’s state matching requirements were met.

The report also found an employee was paid from the wrong budget during the 2013 fiscal year, resulting in $46,800 in federal funds that were potentially wrongfully spent.

A family contract

The audit mentioned a contract granted to an immediate family member of a Wyoming Department of Education employee during a prior fiscal year not under the audit’s purview. Nearly all of the $7,000 contract was paid for with federal funds, the audit reported.

WDE Accounting Supervisor Trent Carroll said the department does not write language into its contracts requiring employees or independent contractors to announce their family relations with members of the department.

But there is a state statute regarding nepotism, which outlaws public employees from taking part in the hiring of their family members.

“And we expect a member of leadership to be aware of that and to follow it,” Carroll said.

Though he would not discuss specifics because it regarded personnel, attorney to the superintendent John Masters said appropriate actions were taken once leadership learned of a contract that had been approved by an immediate family member.

Masters said auditors never met with members of the office of the superintendent.

Hill said in a prepared statement she was pleased with the results and applauded the good work of WDE employees. But otherwise, she didn’t address the audit’s findings.

Hill has cited other audits that found no questionable spending under her administration, but those audits weren’t as thorough in their review of agency spending as the audit released Wednesday.

The Wyoming Department of Education distributed nearly $130 million in federal funds during the 2013 fiscal year, according to the report.

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