A Nevada
County Civil Grand Jury report released Friday found that the Nevada County
Office of Education does not have clear policies in place to regulate employee
spending on office-issued credit cards, and raised concern over the lack of
financial oversight on such spending by the county’s Board of Education.
The grand
jury’s investigation was triggered by a citizen complaint received in July 2014
over a lack of transparency and oversight on the credit card purchases and
receipts of Nevada County Superintendent of School employees dating back to
2008.
In its
initial investigation, the grand jury interviewed the complainant, employees in
the county Office of Education and one member of the county’s Board of
Education; the grand jury also conducted follow-up interviews with county
Superintendent of Schools Holly Hermansen, a board member and county Office of
Education personnel.
In addition,
the grand jury reviewed several county Office of Education policies, including
expense report and reimbursement procedures.
According to
the report, the Superintendent of Schools office issues credit cards to various
individuals for work-related expenses; under Nevada County Office of Education
board policy, expenditures are allowed under the condition that “costs are not
excessive.”
In analyzing
receipts provided by an interviewee of purchases made on office-issued credit
cards, the grand jury highlighted 11 purchases between August 2009 and January
2014 that “could be considered excessive because of lack of supporting
documentation for authorization of those expenses.”
Those
purchases included a $909.34 charge in August 2009 for dinner, supplies and
literature for a retreat; a $430.66 charge at an Ohio restaurant made in
October 2013 with no explanation for the expense; and a $883.38 charge made at
a Monterey restaurant in January 2014 with no details provided for the expense.
Through
interviews, the grand jury determined that an employee can be questioned about
expense reports, but that determining what constitutes excessive spending is
typically a “judgment call”; the report found that the county Office of
Education’s “current rules and guidelines for expenses and expense
reimbursement are nonspecific, inadequate and ambiguous.”
The grand
jury also found that board policy prohibits alcohol from being purchased on
office- issued credit cards.
However, in
reviewing receipts and testimony by interviewees, the grand jury found that
between January 2008 and January 2014, there were eight instances in which
alcohol had been purchased on at least one office-issued credit card; all of
those receipts were approved for payment.
In addition
to finding that the county Office of Education lacked clear credit card expense
policies, the report also found that the county Board of Education “did not
perform due diligence” when it voted 3-2 at its July 9, 2014 board meeting
against overseeing Hermansen’s expense reports and office-issued credit card
receipts.
That vote,
according to the report, came after two occasions in which board members
requested Hermansen’s expense reports for review.
The report
also found that a member of the board submitted a public records request to
review charges made on credit cards; though the Superintendent of Schools
office complied with the request, the report found that the information it
submitted was incomplete.
The grand
jury also recommended that the Board of Education implement a policy manual to
address credit card expenses, consider the use of an independent auditor to
check for accuracy in credit card expenditures and reimbursements and be
proactive in its oversight of expenditures, specifically in its oversight of
credit card charges made by Hermansen, who reports directly to the Board of
education.
The report
requests a response from Hermansen on one of its recommendations by Aug. 24,
and a response from the county Board of Education on six of its recommendations
by Sept. 24.
Upon the
report’s release on Friday, Hermansen reached out to The Union via email,
stating that “the report has inaccuracies and misinformation.”
However, she
was out of the area and unavailable to comment further until Monday.
June
27, 2015
The
Union of Grass Valley
By Emily
Lavin
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