June 30, 2016

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Widened probe target in Stepp’s credit card use unclear

Click here to view the statements on Randy Stepp’s board-issued credit card

MEDINA — The Medina school board has asked the state auditor to broaden the examination of district spending controlled by Superintendent Randy Stepp.

But it’s unclear what board members might be looking for.

On Monday, the board amended the agreement authorizing a state audit already under way of Stepp’s use of the district’s “carryover fund” held by the Medina County Schools’ Educational Services Center.

Randy Stepp

The audit of the ESC fund began April 8, when Stepp was placed on paid administrative leave pending the outcome of the audit, expected later this month.

Now, in addition to the carryover fund, the board is asking the state to audit Stepp’s American Express card — one of two credit cards he was issued in 2006, the year he was hired, to pay for district expenses.

But the school board is asking the auditors to examine only one month’s bill — December 2007, covering charges made between Nov. 10 and Dec. 10.

School officials have declined to explain why that month was singled out.

The Gazette obtained a copy of the December 2007 billing statement through a public records request.

It showed $5,276.36 in charges. All but $524.09 of the charges were for 13 rooms booked at the Capital Square Hyatt Hotel in Columbus for Nov. 11-14.

The dates coincide with that year’s annual conference of the Ohio School Board Association.

School officials declined to say what specific charges they were questioning.

“I don’t want to make any comment on it because there’s an audit in process,” district Treasurer Jim Hudson said.

The charges include nine hotel rooms reserved for two nights, Nov. 11-12, with individual bills ranging from $340 to $462.

Two other reservations were for the night of Nov. 12 at a cost of $170 each.

Two more rooms were reserved for three nights, Nov. 11-13, at a cost of $510 each.

The only other charges on the December credit card statement were a Dec. 5 charge for $88.49 from the Blue Heron restaurant and a $435.60 charge for a Columbus Hyatt hotel on Dec. 6.

Among the issues the school board is asking the state auditor to consider are “authorization for approval to pay per district’s policies or employment contract,” the “adequacy of supporting documentation,” “proper public purpose,” “proper fund/account coding in the District’s accounting records” and “exclusion from any amounts previously reimbursed or paid by the ESC.”

A Gazette examination of ESC records found no indication of double billing for the 2007 Columbus conference.

The board requested the audit and placed Stepp on paid leave following a public outcry over Stepp’s new contract, which provided him with an $83,000 “retention” bonus, and subsequent publicity about earlier contracts that obligated the district to pay for Stepp’s old college loans and for a master’s of business administration.

School board members later said they did not know his education expenses cost the district more than a quarter-million dollars.

Last week, Stepp filed a lawsuit in federal court charging the school board knew the full cost of the contract provisions but falsely claimed ignorance in a March press release.

The lawsuit also disputes the school board members’ statement that they did not know about all the payments he was making using the district’s carryover fund at the ESC.

Last month, The Gazette reported that in 2008 Stepp was reimbursed $4,782.89 from the ESC fund for a 2008 trip to Orlando, Fla., for a National School Boards Association conference.

Stepp was accompanied by his wife and three daughters and has said he billed the district only for his expenses. But records show he included receipts for two nights at a luxury hotel after the four-day conference ended.

The Gazette obtained and examined all seven-plus years of Stepp’s statements for his two credit cards and found a total of $63,383.81 in charges.

Many of the charges are for food, travel and hotel expenses. Stepp often used his district card to pick up other employees’ hotel and meal charges.

The Medina City Teachers Association also requested copies of Stepp’s credit card statements but came up with a higher total of more than $75,000, which was included in a letter to the union members.

Asked why the totals differ, union President John Leatherman said union officials included some spending from other administrators’ credit cards.

He said they included those charges for conference trips they believe Stepp also attended.

Leatherman said he was surprised by the district’s interest in the December statement because he already had reviewed the document and concluded most of the charges were related to the annual OSBA conference.

He said that the school board and administrators often attended that conference in mid-November.

“I don’t see what they are looking at because anyone who’s reviewed the receipts would see that costly hotels (for educational conferences) are throughout all the pages of credit card statements,” he said.

Leatherman said he and the more than 400 district teachers still have questions about bills Stepp ran up for books.

The Gazette review of the statements found 107 charges to Amazon.com totaling $5,789.77, 12 charges to Borders for $1,001.12, 11 charges to Barnes and Noble for $871,84 and five charges to JWS Wiley Publishers for $2,638.24.

Again, the union’s total was somewhat higher.

“Most recently we’re concerned about what we think is nearly $12,000 in books that were purchased,” he said. “I feel like if they were purchased with district money they need to be sitting in our district office.”

Stepp told The Gazette last week that the books he purchased were either for staff development or related to his college coursework.

Leatherman said he’s still reviewing documents regarding Stepp and other administrative expenses.

“The district continues to answer our questions, but we will still have more,” he said. “It just takes time for us to review the material and ask questions.”

The school board is working to change the way credit card purchases are authorized by the district through an update to district policies and procedures regarding credit cards.

In the meantime, Treasurer Hudson has taken all district credit cards from employees and administrators.

Contact reporter Loren Genson at (330) 721-4063 or lgenson@medina-gazette.com.

Loren Genson About Loren Genson

Loren Genson was The Gazette's senior reporter. From August 2012 through September 2015, she covered Brunswick city and state and national government. To contact The Gazette, call the managing editor at (330) 721-4065.