Although the purchases at Potomac Middle School in Dumfries are relatively small compared with the $10 million spent each year on more than 700 credit cards in county schools, the amount of credit spending at Potomac Middle again raises questions about the county’s fraud and waste safeguards, as the audit’s release comes shortly after an embezzlement case at another Prince William school.
In that case, an initial audit resulted in a criminal embezzlement charge against an elementary school principal, who was found to have put more than $8,500 in personal charges on a school credit card. Investigators also found electronics missing from the principal’s school.
The Potomac Middle audit, which details spending from July 2009 to March 2011, found that the school exceeded its $361,000 budget by about $32,000, or close to 9 percent.
Charges included 30 separate restaurant bills totaling $14,689. Four of the meals exceeded $1,500 each; the largest restaurant charges were budgeted under “travel” and included the On the Border meal in September 2009, and more than $1,600 for staff meals at Carrabba’s, one in May 2010 and another in August 2010, according to credit card statements.
The audit noted that at least 29 “conferences, hotel, and travel related expenses” were submitted for reimbursement, without any itemization or justification for the expenses. Similarly, there were charges for Christmas cards totaling $253 and personal gifts totaling $430, in violation of school policy, according to the audit.
The school system considers the majority of the charges appropriate — they were spent for school purchases — but officials are working to address the overspending and the fact that many of the purchases lacked proper approval. School administrators are allowed to expense large meals if conducting school business, officials said, as long as the expenses are properly approved.
Philip Kavits, a school spokesman, said officials are using the outcome of the Potomac audit “to improve the system and make sure the dollars are spent as they should be,” adding that officials already have made “tremendous progress” in addressing the problem. He said the audits show that the majority of spending has not raised red flags and that the surprise internal audits — instituted in 2010 — are an effective tool for curbing abuse.
The school system has recovered $1,300 in charges, Kavits said.
Benita M. Stephens, Potomac Middle’s principal at time of the charges and the administrator who oversaw the school’s budget, was replaced this year and recently was placed on paid administrative leave, Kavits said. He declined to say why Stephens was placed on leave, calling it a personnel matter.
Citing the audit, the former principal said she is resigning.
“I don’t think it was accurate,” Stephens said of the audit. “There was no personal charges that were made by me, that part I can say.” She said Christmas cards were purchased to give to school staff.
Of the $32,000 in cost overruns, Stephens said: “I hate to say this, but I carry a staff member who had terminal cancer.” She declined to elaborate.
And on the large hotel bill, at the Westfields Marriott in Chantilly in August 2010, Stephens said she scheduled a retreat and had to pay for meeting space. “If there’s one thing I could pull back that would be it,” she said. “I’d be working now if that was the case. This has been a nightmare for me for two years.”
She said she wanted to consult with her attorney before answering additional questions.
The school system is handling the issue internally, Kavits said, and does not regard the issue as a criminal matter.
School Board Chairman Milton C. Johns, who also sits on the school system’s internal budget committee, said the results of the Potomac Middle audit were “surprising and disturbing” but far from the norm. He said that placing a limited number of credit cards for administrators to make smaller purchases is key to running the second-largest school system in the state.
“In a school system as large as ours, we have to have some flexibility at a relatively low level for folks to make these minor purchases,” Johns said. Without issuing credit cards, “we would grind to a halt. . . . The vast majority of transactions have been handled appropriately.”
School officials say the auditing program has proved effective. Of the 11 completed audits since 2010, most findings involved small problems with accounting procedures, which administrators have fixed, said Vivian McGettigan, the school system’s auditor. She said Potomac Middle is the only school she has reviewed so far that exceeded its budget.
“I think it’s working very, very well, because when I bring issues back, [school administrators] respond to them immediately,” McGettigan said.
The embezzlement case and issues at Potomac show that the school system should beef up its safeguards, said Tracy Conroy, a parent who helped found the advocacy group Our Schools.
After seeing a copy of the Potomac audit, Conroy said Prince William administrators should ask for an outside investigation to ensure that all wrongdoing was uncovered.
“Why wouldn’t they have brought it out or had it fully investigated?” Conroy asked.
School officials said the Potomac spending differs from what they encountered earlier this year, when Kirby Elementary School Principal Jenny Georgina Enriquez-de Bermant was charged with crimes related to such spending. School officials cited the May case as a success story for their auditing procedures.
An initial audit found suspicious charges and noted missing items from the school, according to court documents. School officials then referred the matter to police, who investigated and found about $8,500 in personal charges made on the school’s credit cards. Bermant said she wanted to provide holiday gifts for her children, and the school ended up missing iPhones, an iPad2 and two 32-inch televisions, according to court records.
Joseph McCarthy, an Alexandria lawyer who represents Bermant, declined to comment.
Bermant has paid $14,773 in restitution, court records show. She pleaded guilty to the embezzlement charge in July and is scheduled to be sentenced in January, when she could face a maximum sentence of 20 years in prison.
Last year, McGettigan outlined a plan to provide an additional auditor and an assistant for the office in the next fiscal year and additional positions by the end of fiscal 2015. Officials plan to address the staffing issue at the next meeting of the school’s internal audit committee, which is scheduled for Wednesday.