A nearly six-month investigation involving Elizabethton City Schools has finally come to a close.

Officials with the Tennessee Comptroller of the Treasury released their investigation report involving Elizabethton High School Tuesday morning and indicated several financial issues over a span of several months.

“During the 2017-18 school year, school district administrators conducted investigations into financial accounting practices of employees at Elizabethton High School as well as the operational practices of school support organizations,” ECS said in a release issued to the Elizabethton Star. “At the conclusion of the investigations, the district acted proactively to address violations and deficiencies, particularly those that involved the collection, record-keeping and disbursement of school funds.”

Once the internal investigation concluded, the school system involved the Comptroller’s Office. In the report, the Office findings within the district included:

• Elizabethton High School’s athletic department has deficiencies with cash collection and disbursements from concessions and ticket sales.

• EHS bookkeeper used the mail meter machine for personal use and maintained an unauthorized cash fund.

• A trio of school support organizations had operating deficiencies.

The information came to a head in April when ECS announced they terminated the employment of co-athletic directors Eddie Pless and Mike Wilson, effective April 4, 2018, per school board documents. During May’s BOE meeting, a letter — dated March 6 — obtained by the Elizabethton Star showed that an internal investigation from the system’s discipline committee recommended the termination of employment of Pless and Wilson.

In the Comptroller’s investigation report, the department investigated the time of July 1, 2017 through Feb. 28, 2018 at the request of the school system in regards to practices by the athletic directors.

According to the report, “our investigation revealed the following questionable practices in the (athletic department), which can be attributed to lack of management oversight and the inadequate maintenance of accounting records.”

In one of the findings in the report, “an athletic director” made cash disbursements from concession sales collections generated from a high school basketball tournament in Elizabethton in December 2017, which is not in compliance with school system policy and the Tennessee Internal School Uniform Accounting Policy Manual. Investigators stated that tournament workers did not maintain supporting documents for disbursements, hampering the accuracy of collection and disbursement verification. The report adds that the “athletic director” used the cash to pay tournament workers — including his wife and himself — pay for concession food, supplies and donate $700 to the E-Town Express — an Elizabethton basketball booster program. Comptroller officials added the booster club returned the funds on February 28 to remove itself from any controversy and that EHS did not receive any other collections from the tournament.

In another instance, “a second athletic director” withheld cash from athletic event ticket sales. The report indicates the AD in question claimed funds were for emergency costs and to pay event workers.

“The athletic director did not keep supporting documentation for these cash disbursements; therefore, we could not verify the use of cash withheld from ticket sales,” the report reads. The AD also reportedly sold certain adults a lower-priced ticket while collecting the higher-priced adult ticket amount at junior varsity football games as a way to allow tickets to reconcile with collections while also creating excess cash to pay football field workers. Also, the AD reportedly claimed he withheld cash from ticket sales and other events to make emergency purchases and to pay an athletic worker with an immediate financial need. Cash was reportedly replenished from an AD petty cash fund.

According to school policy, petty cash funds are prohibited. No petty cash fund records were reportedly found, according to the Comptroller. The Comptroller adds that the practices of not performing written cash counts for concession sales, ticket sellers not completing cash counts and reconciliations and selling student tickets at an adult price “exposes the school system to risks of funds being used inappropriately or stolen.”

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Another instance report stated the high school’s previous bookkeeper used the school’s mail meter machine for personal use and maintained an unauthorized petty cash fund.

According to the report, the EHS bookkeeper used the school’s mail meter machine to pay postage totaling $197.88 for personal packages mailed to relatives. The Comptroller added they were unable to find records documenting the bookkeeper reimbursed the school.

Once confronted in January 2018, the bookkeeper remitted $167.03 to the director of schools.

According to the report, a note accompanied with the funds read “This is the money that I have been in charge of for the time I have been in the current position,” written by the bookkeeper. According to the report, the bookkeeper claimed to investigators that the funds, referred to as the “slush fund” or “make it happen fund,” built up from unclaimed money at the school and purchases of postage from the school’s mail meter machine by faculty, staff and herself. The report indicates that the former bookkeeper stated school administrators knew about the petty cash fund and that it was used to purchase gift cards for teachers, coffee, and other items and that no money was deposited with the school. No records of the cash were maintained. Actions taken by the bookkeeper, according to the Comptroller, “exposes the school system to risks of funds being used inappropriately or stolen.”

The report states the bookkeeper’s employment was terminated on Jan. 16, 2018. In Board of Education documents from the January meeting, EHS bookkeeper Rosemary Brewer-Clabo’s dismissal was made effective Jan. 22, 2018.

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The report also indicated that the E-Town Express booster club, Elizabethton High School Athletic Parents Organization and Junior Cyclones Athletic Booster Club at T.A. Dugger also had operating deficiencies.

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District and school officials added they will study the recommendations and work to implement procedures and practices where those have not yet occurred.

Further information from the report will appear in future issues of the Elizabethton Star.

To see a copy of the Comptroller’s report on the investigation click here: Elizabethton City Schools Comptroller Investigation Report