COLUMBIA, S.C. — State Superintendent of Education Molly Spearman on Tuesday placed Richland School District One on fiscal watch after a P-Card audit conducted by the South Carolina Department of Education (SCDE).
In a notification letter to district officials, Spearman said the findings listed in the audit report identified "numerous significant deficiencies and material weaknesses that could potentially have a significant effect on the financial condition of the district." As a result, Spearman placed the district on fiscal watch pursuant to state statute.
“We have been informed that the South Carolina Department of Education (SCDE) is putting Richland One on fiscal watch based on their findings from a P-card audit of the district," Executive Director of Communications Karen York said in a statement released by the district. "In reviewing the findings, Richland One still maintains strong internal controls (checks and balances), which include a review of all transactions on a monthly basis by our Procurement Department. As such, those checks and balances discovered issues concerning a former employee that were turned over to law enforcement."
The audit followed a fiscal watch intent letter from SCDE to the district in March which expressed concern about the district's P-Card policies and procedures and it's procurement code related to small dollar purchases.
"The audit found some exceptions. Of the 426 statements that were audited by SCDE, exceptions were found with 18 (or 4.2 percent); of the 3,858 transactions, exceptions were found with 71 (or 1.8 percent)," officials went on to say.
"The District appreciates those identified opportunities to improve; however, in our opinion, none of the findings were significant or rose to material impact, York said.
Among the findings identified in the district's response to SCDE are:
- Card approvers not reviewing P-Card transactions for compliance and completeness
- Recommendations from internal auditor not implemented
- Use of P-card by someone other than the cardholder
- Personal purchases made with P-Card
- Purchases shipped to a residence
- Purchases of equipment with a value of $100 or more
- Superintendent does not have an approver for P-Card
- Splitting transactions to circumvent single transactions limit ($500)
- District and cardholders not following P-card policies and procedures
- P-Card used for prohibited purposes
- Unauthorized signatures on monthly P-card statement and receipt forms
- Items purchased for an event after the event occurred
- Invoice, receipts not providing adequate details about items purchased or no invoice, receipt to support purchase
- District not maintaining an accurate list of cardholders.
"The District has controls that help establish more than reasonable assurance that risks are mitigated to an acceptable level. The District will continue to ensure those controls are in place, and the potential impact of any exception is kept to a minimum."
The district has sixty days from the date of the declaration to send a recovery plan to the SCDE outlining the corrections taken to correct the issues that led to the declaration, according to state education officials.
When the recovery plan is received, the SCDE will, within thirty days, either approve or deny the recovery plan. If denied, the District will have to submit to the SCDE an updated recovery plan. While the District is under fiscal watch, the SCDE will provide technical assistance.
A district under a declaration of fiscal watch will not be released from fiscal watch in the same fiscal year in which the declaration was made, but may be released the following year if the SCDE determines that the corrective actions have been or are being successfully implemented.
The fiscal watch comes after months of concern about the district's P-card use and recent developments that reinforce those concerns.
In August, South Carolina State Attorney General Alan Wilson urged Governor Henry McMaster to investigate the use of purchase cards in Columbia's Richland County School District One.
In his letter to the governor, Wilson states "I have recently received many of the same kinds of complaints regarding Richland County School District One's use of purchase cards, or P-cards.
In October, a state grand jury indicted a former Richland One official on charges that he embezzled school funds for his own personal use.
The South Carolina Attorney General's Office said Travis Antonio Braddy, 43, is facing a 12-count indictment that accuses him of misconduct while he worked as the Richland One procurement officer. Prosecutors said he resigned from the district in May of 2021 on grounds of insubordination.
According to the indictment, the case involved the use of P-cards issued by the district.
The next school board meeting for the district is scheduled for December 13, at 7:00 p.m.