GARY — The State Board of Accounts has asked Superintendent Cheryl Pruitt to reimburse the Gary Community School Corporation $30,000 in bonus payments that were allegedly not properly approved in accordance with her three-year contract, newly released documents show.
The special audit was limited to records associated with the superintendent's compensation of $30,000 in March 2016, with supporting documents stating the money was for bonus payments owed to her for the 2012-2015 contract period, according to SBOA documents filed Wednesday.
While Pruitt's contract provided for a "Growth Incentive Plan and Bonus to be agreed upon by the Board and the Superintendent," the audit states no documentation was provided for the audit showing that the board agreed upon or approved the amounts or the timing of such payments.
All compensation and benefits paid to officials and employees must be included in the labor contract, salary ordinance, resolution or salary schedule adopted by the governing body unless otherwise authorized by law, and payments made or received for contractual services must be supported in a written contract, according to SBOA.
The audit adds that compensation "must be paid in a manner that will facilitate compliance with state and federal reporting requirements."
The announcement comes as the school corporation remains under the control of a state-appointed emergency manager firm to get a handle of the district's finances and academics, bring spending in line with resources, and begin to pay off the district's massive debt.
Gary Community School Corp. emergency manager Peggy Hinckley described the district's finances as in "total disarray" earlier this month, noting that none of the processes and technology commonly employed by large enterprises and most public school districts were used in Gary schools.
The audit states the SBOA's findings were discussed with Pruitt on Sept. 20. Pruitt did not immediately return a phone call seeking comment Wednesday night. The audit was forwarded to the Office of the Indiana Attorney General and the local prosecuting attorney, according to SBOA.
The report was also discussed Sept. 28 with Hinckley, various current and former school board members, the school's treasurer and others.
Hinckley told The Times on Wednesday that the audit findings are concerning.
"Certainly, when you have a district that is exceeding revenue by $2 million a month and has been in debt quite some time, it's a concern."
In a letter to the SBOA dated Oct. 4, Rosie G. Washington, board of school trustees president, stated the majority of the board's current members disagreed with the auditor's findings and request for reimbursement. Washington argued the $30,000 bonus payments were "duly and legally agreed upon by the board" via a labor contract dated June 1, 2012.
The letter also states the board is prohibited from any budgetary actions and decisions under SEA 567.
"Those decisions are solely the authority of the Emergency Manager as per SEA 567," the letter states.
Hinckley said she did not know if any additional action would be taken against Pruitt by the emergency management team, noting the SBOA, not the team, is the enforcement authority in this case.
Hinckley said Wednesday the matter is "in the hands of the State Board of Accounts, the Office of the Attorney General, and the prosecutor's office."