To see a story about Superintendent Randy Stepp denying wrongdoing, click here.
To see complete text of the special audit, click here
Loren Genson | The Gazette
Medina Schools officials said they’re still looking for answers to how nearly $1 million was spent without oversight from the school board or the district treasurer.
On Tuesday, Ohio Auditor David Yost issued a finding for recovery of $4,121, which the examiners said illegally was spent by Superintendent Randy Stepp from a “carryover” fund held by the Medina County Schools’ Educational Service Center.
Yost criticized Stepp for what the audit termed “illegal spending.”
“When public officials gain a sense of entitlement, this sort of bad spending follows,” Yost stated in a news release announcing the official release of the audit.
Yost’s office said the findings for recovery against Stepp were forwarded to Medina County Prosecutor Dean Holman.
Holman said Tuesday that he hadn’t yet received the findings. He suggested it’s possible that the case would be handled by the city of Medina and not the county.
“When it comes to city schools, it’s not us; it’s the city law director,” he said.
Holman added that if asked to handle the case, it would be “up to us to recover the money.”
The school board placed Stepp on paid leave in April pending the outcome of the audit.
The audit found that between July 1, 2005, and March 31, 2013, the ESC issued 247 checks totaling $947,128 that were not properly approved by the district or recorded in district records.
Auditors also said that more than a half-million dollars of that total went for expenses where the “proper public purpose was unclear.”
The audit also stated that an investigation into a $172,000 student loan payoff directed by Stepp is incomplete and that it’s unclear whether Stepp should have disclosed the loan payoff as fringe-benefit income on his W-2.
“I am eagerly awaiting the rest of the facts from the U.S. Department of Education about his personal school loans,” Yost said in a news release.
At a press conference Tuesday, school board President Karla Robinson said the audit proves that board members were not aware of all of Stepp’s spending from the carryover fund.
“The board is gratified for the confirmation provided by the state auditor as to the lack of proper district-level authority for these expenditures,” she said.
Robinson said that new statewide rules are in place to provide limits and regulations on spending from ESC funds.
House Speaker William G. Batchelder, R-Medina, asked for the changes in the biennial budget passed this summer.
“We’re grateful state law has changed,” Robinson said. “Our pain and suffering is going to mean the rest of the ESCs in the state will not have this problem going forward.”
Robinson said Stepp’s status as a paid employee on leave would be “on the table” when the board meets in special session Thursday.
Robinson said she and other board members relied on Stepp to manage the district’s money properly and tried not to “micro-manage” the spending.
“When that trust is broken and mistakes like this occur, it’s a very serious problem for a board, because we’re not charged with watching every single penny,” she said. “We’re charged with making good policy decisions and hiring strong individuals to make sure our policies and procedures are followed and observed.
“In this case, it doesn’t appear that happened.”
Robinson said board members want more answers about how $947,128 in district money was spent and authorized by ESC officials without oversight from Medina Schools.
“Our board is most eager to have an explanation as to how this could have occurred,” she said.
She said she hoped the auditors would be able to complete “a full examination of the ESC procedures at issue within the regular current audit cycle, if not sooner.”
ESC policy changes
While the finding for recovery was against Stepp, the audit said ESC Superintendent William Koran and Treasurer Michelle McNeely and their bonding companies also are liable for repaying $3,870 misspent from the carryover fund.
McNeely and Koran both signed the purchase orders requested by Stepp to use district money for items that the audit deemed “not a public purpose.”
McNeely resigned last month. Koran has said policies were changed earlier this year to provide better oversight of the spending.
“We have already passed resolutions on the amount of carryover funds we can have from one year to another and it maxes out now at $25,000,” Koran said.
The ESC now also requires the signature of a treasurer and superintendent to spend ESC funds on expenses that are outside of the services for which the ESC contracts.
Koran offered to open up the education center’s books and sit down with Medina Schools officials to discuss the findings.
“If they want to sit down with us and go through every expenditure, we’d be very happy to do that,” Koran said. “We have an interim treasurer in place and he’s going through everything right now, and he’s making sure all our ‘t’s’ are crossed and ‘i’s’ are dotted.”
Medina City Teachers Association President John Leatherman said he agreed with Robinson that the audit results seem to back up the board members’ claims that they didn’t know about all of Stepp’s spending.
He said if the board takes action to fire Stepp, the teachers may revisit the union’s March 7 vote of “no confidence” in the board.
“I’m excited to see what comes out of the Thursday meeting,” Leatherman said. “It might give us the opportunity to remove the vote of no confidence.”
Robinson was asked by a resident at Tuesday’s news conference about the five-member board’s unanimous approval in January of a new five-year contract for Stepp that provided an $83,000 signing bonus and sparked a public outcry.
Robinson called that decision “the wrong choice for this board. We understand that now.”
Robinson and board member Susan Vlcek announced last month they would resign next year and give the three board members who will be elected in November the opportunity to fill their vacancies.
Bill Grenfell, the other board member who voted to approve Stepp’s contract, is not seeking re-election.
New board members Tom Cahalan and Doug Adamczyk were appointed this spring to replace Dr. Robert Wilder, who resigned in February, and Charles Freeman, who resigned in March.
Both Cahalan and Adamczyk are on the Nov. 5 ballot, along with four other candidates: Eric L. Carpenter, Angie Kovacs, Ronald Ross and Robert C. Skidmore.
Montville resident Ray Gordon attended the press conference, along with several other community members and parents.
“I think it’s a sad day for the city of Medina to realize that someone we trusted, that we had confidence in, betrayed us,” he said. “I’m hoping that people realize the person responsible for this is no longer there.”
Brigid Turrittin, the co-chairwoman for the campaign to pass the district’s 5.9-mill levy on the Nov. 5 ballot, said she hopes the audit results will encourage voters.
“The things that happened can’t happen again,” she said. “What went wrong will be punished.”
Reporter Kiera Manion-Fischer contributed to this report.
Contact reporter Loren Genson at (330) 721-4063 or email@example.com.