NY audit: Schools Superintendent Walts didn't control spending

A third-party audit commissioned by the New York state school district that Prince William County Public Schools Superintendent Steven L. Walts used to head found a string of potential abuses, including over-charging by contractors and high travel expenses.

During Walts' seven-year stint as superintendent of the Greece (N.Y.) Central School District, over-charging by contractors on projects related to a 2001 Capital Improvement Plan budget were in excess of $200,000. In examining the CIP, the third-party auditors confirmed insufficient documentation, change order issues and inconsistent labor rates charged by contractors.

"Quotes for work were often presented as a lump sum amount without any breakdown of labor, materials, or overhead and profit amounts," the document states. It also mentions that on many occa-sions, contractor invoices were found lacking in detail, in some cases just listing the amount due.

The most egregious example was a change order for a drinking fountain installed outside of a district school for $10,000. The cost of the fountain was determined to be $150.

The audit was performed by Eldredge, Fox & Porretti and its results were in a Rochester Democrat & Chronicle story.

The audit also discovered more than $37,500 in travel expenses by Walts and three members in his staff during the 2004-05 school year. These expenses include a flight to California by Walts in excess of $2,100 and at least six instances of the District reimbursing Walts and his staff for rooms in excess of $350 a night.

Walts was hired by Prince William County Public Schools in July 2005, as was former Greece staffers Keith A. Imon and Keith J. Johnson. Johnson serves as associate superintendent for Human Resources, while Imon is the schools' associate superintendent for Communications and Technology Ser-vices.

"The Superintendent is confident that he followed all processes and procedures in his former school district and served in the best interests of the students," Imon stated in an e-mail Thursday. "He remains fully focused on the excellent progress we continue to make over the past five years in Prince William County Public Schools."

The News & Messenger obtained travel receipts for Walts for fiscal 2009 for a story last December and discovered approximately a dozen trips in that time frame of varying expense to the taxpayers.

These trips included visits to New York, San Francisco and Minneapolis. When questioned at the time of the December story, Walts stated those trips were "purposeful" and that they "benefited the school division."

Walts stated that superintendents are required to attend some meetings by the Virginia Department of Edu-cation. Others were for professional development, as well as "to ensure that the best instructional methods and financial management are in place in Prince William," stated Walts.

On Feb. 3, the Prince William County School Board heard a presentation detailing an external audit of county schools for fiscal 2009. McGladrey & Pullen's report stated that no difficulties were encoun-tered in performing the audit and the firm didn't discover any fraud or illegal acts during the course of its audit.

However, the firm expressed a concern in its report that a recommendation of hiring an internal auditor position made in 2008 was not followed by the school division. The division did follow McGladrey & Pullen's recommendation of establishing a formal fraud policy and a formal internal audit pro-gram.

"The Superintendent is very supportive of the recommendation for an internal audit position," stated Imon in a separate e-mail Thursday. "This will be considered in the upcoming budget deliberations as we face an almost $80 million budget shortfall."

According to Imon, the internal audit position wasn't filled last year due to budget constraints. The average annual salary plus benefits for this type of position would be $155,000.

Staff writer Kipp Hanley can be reached at 703-878-8062.