Auditors outline problems with school board association

DES MOINES – Auditors outlined a list of irregularities and questionable practices within the Iowa Association of School Boards, and said they were stopped when they tried to share those concerns with the association's board.

The Legislature's Government Oversight Committee is looking into problems with the IASB, a non-profit group funded in part by taxpayer dollars.

Auditors told lawmakers Tuesday they went to IASB Executive Director Maxine Kilcrease and another official with a laundry list of concerns. They also cited to IASB officials the need for internal controls to ensure that expenses were approved.

Ted Lodden of the West Des Moines accounting firm Brooks Lodden said they were told to discuss every issue or audit finding with a new executive council and then would have the opportunity after they completed the audit to meet with the IASB's board.

The auditors were invited to a board meeting, where they thought the purpose was to present those issues. But they sat there for the better part of two days and were told by management the board was too busy to meet with them, Lodden said.

They were told their list of concerns would be handed to board members.

“I don't believe that list was ever presented to the board,” Lodden said.

Lodden said when he tried to bring concerns to the association's board, he was sent a letter from the association's outside lawyer to his lawyer, which he interpreted as a threat.

One auditor in the firm was prohibited from having any contact with the board or current or former staff members, Lodden said. He also was instructed to put another auditor on the job, Lodden said.

The IASB has since placed Kilcrease on paid administrative leave until an investigation can be completed.

The IASB said Kilcrease's contract called for a $210,000 annual salary, but that she was being paid what would amount to $367,000 per year. Kilcrease also raised the salaries of three other top employees, officials said.

Kevin Schick, a consultant who was serving as chief financial officer, also finds himself in the spotlight for allegedly using an association credit card to pay for airplane tickets to Bora Bora that were not for business travel, officials said.

Attorney Nolden Gentry, who is representing the IASB, said to his knowledge, the Federal Bureau of Investigation is probing expenses that it appears an IASB program billed both the state and federal governments for.

Lodden said it is possible about $500,000 of a federal grant would have to be paid back.

Sen. Tom Courtney, D-Burlington, questioned the use of the association's credit card for expenses, noting most people turn in business expenses to be reimbursed.

Gentry said association officials were provided access to a credit card so they could charge legitimate IASB expenses without having to pay it out of their own pockets. He said they were required to fill out a report to justify charges.

“It was not intended for people to put personal charges on it,” Gentry said.

Officials said $8,680 was improperly charged, with $7,500 paid back so far.

Rep. Deborah Berry, a Waterloo Democrat and member of the oversight committee, expressed frustration with what went on at IASB.

“It disgusts me,” Berry said. “Again, here we are in tough economic times, and teachers are being laid off, and then you have another organization that's using taxpayer dollars at their own discretion.”

The legislative committee is continuing hearings Monday, and Co-Chair and Sen. Rich Olive, D-Story City, they could use subpoena power to bring people before the committee.