Medina Schools Treasurer Jim Hudson wants to change the way credit card receipts turned in by the district’s senior administrators are scrutinized.
“We need to have more levels of review,” Hudson said.
Until new policies are in place, Hudson has curtailed the use of credit cards.
On April 8, Superintendent Randy Stepp returned the two credit cards he had been issued when he was placed on paid leave pending completion of a special state audit of his use of a district “carryover fund” held by the Medina County Schools’ Educational Service Center.
Hudson said the other five administrators who were issued credit cards also have turned them in.
“I have all the cards until we figure out the new process,” Hudson said.
Hudson said the changes in policy are not related to the special audit, which was requested after school board members acknowledged not knowing that Stepp had used the ESC fund to pay more than a quarter-million dollars of his educational expenses.
Stepp’s contract obligated the district to pay for his old degrees and any new college courses he took. But board members said they didn’t know the total cost.
Hudson said he and the school board are revising the district’s credit card procedures as part of an overall review of financial management policies.
Stepp and senior administrators used the credit cards to pay for a variety of goods and services.
The Gazette requested copies of receipts turned in by Stepp since he became superintendent in 2006 and found receipts totaling nearly $53,000.
Most of the charges were for hotel rooms at educational conferences and business-related meals at a variety of meetings within and outside the district. Often Stepp used his cards to pay for rooms and meals of other staff members.
Hudson said he reviewed the receipts and found no indication Stepp had used the cards inappropriately.
But he concluded that additional oversight was needed. Under the old policy, a purchase order was required detailing the reason for each credit card purchase.
Administrators then would submit receipts to Jon Burkhart, the district’s business manager, who paid the monthly credit card bill and kept records.
Hudson said someone besides the business manager — who reports to the superintendent — should review the receipts.
“The policy that was in place went through the business office,” Hudson said. “We are changing that.”
Changing the rules
Hudson said he would propose new credit card policies and procedures at the school board’s work session in June.
He said he is working with the state auditors and looking at “best practices” from around the state to present to the board.
In addition to more oversight of the receipts, Hudson said he is considering placing limits on individual charges.
“Some bank vendors offer cards that have a limit of $500 or $600 so we can limit the expense for a particular reason,” Hudson said. “Let’s say we have someone going to professional development. We can increase their limit to $700 for the conference and then lower it back down again after they return.”
School board President Karla Robinson said she supported Hudson’s call for tighter controls on credit card use.
“It’s very easy for a card like that to be misused,” Robinson said. “But people need to use credit cards on occasion and we don’t want them to have to jump through hoops to do it.”
Robinson said the board should not be involved in the routine examination of individual credit card receipts.
“I don’t believe our role is day-to-day management,” she said. “Our role is to set policy and guidelines and to hire the best people possible to implement that and oversee it.”
Union questions Stepp’s spending
John Leatherman, president of the Medina City Teachers’ Association, which represents the district’s approximately 400 teachers, said he is pleased the district is re-evaluating its credit card policies.
“I’m very glad to hear they pulled the credit cards while we sort this thing out,” he said.
Leatherman said he agreed with Hudson that changes were needed in how the credit card receipts were checked.
“MCTA has major concerns about why these credit cards go through the business office rather than the treasurer,” he said. “Our concern is that the card was being reviewed by the business manager who was a subordinate of the superintendent, rather than the treasurer who is at least equal to the superintendent.”
But Leatherman, who had requested the same nearly eight years of records that The Gazette obtained, criticized Stepp’s use of the credit cards as excessive.
Leatherman specifically questioned the meal and food purchases, which totaled about $15,000, and more than 100 payments to Amazon.com, totaling more than $5,600, for books.
The Gazette examined the receipts for the meal and food expenses, which detail who attended the lunches and the purpose of the meetings.
Some meetings and meals were among district administrators. Others involved “shared services” with other school districts. Some meetings were part of union negotiations.
Stepp said all his food and meal purchases were legitimate.
“If I had an expenditure, it was for a purpose related to district business,” he said. “Any time we got together like that it was certainly to conduct the business of the district.”
As for the book purchases, Stepp said he often bought books related to college courses he was taking.
As part of Stepp’s 2009 contract, amended in 2011, the school board agreed to pay all expenses related to his past and continuing education. Between 2010 and 2012, the board paid nearly $94,000 for an executive master’s in business administration at Case Western Reserve University and about $172,000 to pay off three student loans stemming from his earlier degrees at Ashland University.
“Some of those books would have been related to my MBA, or to help further my own growth and development,” Stepp said.
Leatherman said he had no problem with books that related directly to education, such as “The Global Achievement Gap: Why Even Our Best Schools Don’t Teach the New Survival Skills Our Children Need — and What We Can Do About It.”
“I can see where some of the book titles, his contract would definitely allow,” Leatherman said.
But he questioned some of the other books, including “Integrative hypnosis: A Comprehensive Course in Change” and “Social Engineering: The Art of Human Hacking.”
“There are books about personal finance and the FBI and hypnosis that I just don’t understand why they would be used by the leader of a school district,” he said.
Leatherman said he would voice his concerns about the district’s credit card spending at today’s teachers’ union meeting.
He said he hopes to work with the district and the board of education in making sure all the district’s funds are evaluated thoroughly.
“I hope this isn’t a continuous job for the MCTA,” he said. “We’re just looking for transparency.”
Contact reporter Loren Genson at (330) 721-4063 or firstname.lastname@example.org.