The school system’s purchasing department became aware of questionable purchases last year during a routine review of school activity of school system-issued credit cards, the state audit said. An internal audit of an employee’s expenses revealed a dodgy credit card purchases, including gift cards, furniture and other items transported to the employee’s home.
Montgomery County Public Schools also found an account operated by a transportation provider, which was funded with money owed to the school district. The account was used to make payments to multiple employees and purchase items outside of the school district’s jurisdiction, according to the state report. The school system then informed the Montgomery police, who launched their own investigation in November.
So far, school and police officials have refused to provide information, saying only that the investigation was into possible “financial irregularities”.
Police investigate Montgomery County Schools Transportation Department
During the departmental survey in November, the school system put Todd Watkins, the former head of the transportation department, and Charles Ewald, the former vice principal, on leave. Two employees involved are no longer with Montgomery County Public Schools, spokesman Chris Cram said in a statement Tuesday. The state audit report does not name any employees involved in the investigations but notes that one of the previously furloughed employees was terminated in February and the other resigned a month later.
Phone numbers listed for Watkins and Ewald were not answered Tuesday. The Montgomery County Police Department did not immediately respond to a request for comment.
The school district hired an outside accounting and consulting firm in December to lead an independent forensic investigation into the “off-the-books” vendor. account and transactions from July 2016 to January 2022, according to the state audit. That investigation – published in February – found around $1.2 million had been deposited into the account. There was also payments totaling approximately $649,000 made directly to school district employees or to purchase goods and services — “allegedly on behalf of MCPS” — from October 2017 through November 2021, according to the state audit.
When Montgomery County Public Schools announced the police investigation Nov. 16, the account had a balance totaling $535,036, according to the state audit.
The company also found up to $572,000 in credit card purchases deemed questionable or in need of further investigation from July 2016 through January 2022.
Cram, the Montgomery School District spokesperson, said Tuesday that “a lot of work has been done by MCPS staff over the past year, including the hiring of forensic auditors and a significant amount of work with our police partners”. The school district recovered more than $800,000 on Tuesday, Cram said.
As a result of the district’s internal investigation, the school district identified a new vendor for bus purchases, revised internal structures that oversee finances and purchases, reviewed purchase card transactions retrained staff who have acquisition cards, assessed employee access to acquisition cards and reduced card purchase limits, Cram said.
The school system declined to comment further, citing the ongoing investigation.
Beyond the details of the transportation department, the state audit also found that the school district had significant security risks within its IT network, procurement policies that were “not comprehensive enough nor used consistently, and a need to improve internal accountability in some areas. The school district agreed that each of the audit findings was factually accurate and agreed to follow many of the audit recommendations.
Auditors noted that the school district’s response was “sufficient to resolve all audit issues.”