June 25, 2016

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Prosecutor, Ohio auditor to decide whether to investigate Stepp

MEDINA — Public officials are discussing a possible investigation into spending through the Medina County Schools’ Educational Service Center’s “carryover” fund.

In an emailed response to a community member’s question Monday, Medina Law Director Greg Huber wrote, “I discussed, today, the question of an investigation into the use of this fund with the County Prosecutor Dean Holman.”

Medina Superintendent Randy Stepp’s use of the center’s carryover fund with no oversight from the school board is at the center of the continuing controversy about unusual fringe benefits in his new contract.

Huber wrote that because the center’s fund was maintained by a county agency, Holman’s office would have jurisdiction.

“Because this is a county fund and because of the amounts of money involved, the County Prosecutor will have a direct jurisdictional oversight of an investigation,” he wrote. “My understanding is that Mr. Holman will be contacting State Auditor David Yost so as to determine with some certainty whether there will be a more formalized audit of Mr. Stepp’s contract and the use of the ESC funds over and above the usual yearly audit of the school system’s budget.”

A spokesman for the state auditor’s office has said Yost was briefed about spending from the fund and that he was “concerned,” though no formal action has yet been taken.

On Thursday, spokesman Michael Maurer said regional auditors “have been in communication with the school district and incidentally with the ESC.”

Huber also wrote that Holman would meet with Medina Police Chief Patrick Berarducci and county Sheriff Tom Miller “so as to discuss the question as to whether an additional investigation is required.”

Holman confirmed Thursday what Huber had written in the email but said he did not want to comment further.

“I did have a conversation with Mr. Huber where I discussed contacting the state auditor’s office,” Holman said. “I am in the process of gathering information at this point.”

Holman said he has not yet met with the police chief and the sheriff.

Medina Schools’ carryover fund held by the Educational Service Center contains money left over after a school district pays for a variety of services, including school nurses, interpreters for the deaf, bus driver training and computer specialists.

The district paid more than a quarter-million dollars for Stepp’s education through the fund — nearly $172,000 in back college loans and almost $94,000 for an executive master’s in business administration from Case Western Reserve University. Stepp also used the ESC carryover fund to reimburse himself for travel expenses.

Board members encouraged Stepp to get the MBA but they did not know the total cost of his education because they didn’t see the financial statements of the Educational Service Center, which Stepp directed to issue the checks.

The school board has pledged greater oversight of the fund. Under proposed changes, expenditures less than $10,000 from the carryover fund would require approval of the superintendent, district human resources director and the treasurer. Expenses more than $10,000 also would require the signature of the school board president.

Contact reporter Kiera Manion-Fischer at (330) 721-4049 or kfischer@medina-gazette.com.