TEA Eyes Take Over of Beaumont ISD: Leaders Get “F “ for MisManagement of Funds

beaumontBEAUMONT- The  Texas Education Agency is eying  the takeover of the Beaumont Independent School District. Texas Education Commissioner Michael Williams visited the district last week following a recommendation by TEA investigators that a board of managers take over the district.

Problem

According to the TEA report, The district is in hot water for its “severe loss of public trust”  and reputation in its community tainted relating to multiple incidents of fraud, waste and abuse.

The possible changes over the horizon could not only result in the uprooting of the current school board and ousting of Superintendent Timothy Chargois, but also could affect the accreditation of the district.

Responding to citizen complaints, the TEA investigated concerns that the Beaumont ISD violated conflict of interest and disclosure laws in purchasing and procurement, raised purchasing issues and had a discrepancy of $11 million in the general fund balance of the district’s 2012 financial report.

The Beaumont Independent School District was established in 1983 through the merger of the former Beaumont School District (founded in 1883) with South Park Public Schools (founded in 1891).  The citywide district encompasses 153.34 square miles in Jefferson County in Southeast Texas.

Enrollment

The district has a total of 20,819 students. Of those, 5,952 are high school students; 4,572 are middle school; and 10,295 are elementary school students. The district is predominantly Black school district with 64-percent of African-American students, 16-percent Whites and 16-percent Hispanic students. The district is poor with 72-percent of its students considered disadvantaged.

Investigation Details

The investigation revealed that BISD violated financial control and oversight laws when conducting day-to-day financial operations and had kept shoddy records.

One case involved former finance director Devin McCraney and Sharika Allison, who allegedly conspired and unlawfully transferred or embezzled over $4 million from the district bank accounts by making 18 wire transfers. Many of the transfers ranged from $93,00 to $432,895.

Investigator records indicated that McCraney consolidated his duties as the director of finance with duties as chief business officer giving him autonomy and authority over the district’s finances. He allegedly told TEA investigators that he was able to embezzle substantial funds over a significant period of time because no one was watching his activities.

TEA reported that the board’s inability to detect fraud, waste and abuse was troubling because independent outside groups including TEA, the Legislative Control Board and the Federal Bureau of Investigation were able to pinpoint the problem. The report said without those reviews, there would have never been a reason to suspect abuses nor would they have been uncovered.

The report also blasted the board and superintendent for  not  having appropriate protection and security procedures in place to protect district finances.

The board had no internal auditor and it was the superintendent who was responsible to monitor and ensure that his financial procedures were properly maintained. The report said the district had no procedures for the use of wire transfers, no one to review or monitor those making wire transfers from district bank accounts or second party approvals and the system manager, not the superintendent issued and controlled the pass key that allowed unfettered access to the district’s account.

It findings said the board of trustees failed to monitor district’s finances by failing to ensure the superintendent in  had internal controls and procedures  to protect district funds from being pilfered.

According to the report board members have system in place to review or monitor funds, wire transfers, pass keys or other security controls.

The Superintendent, Timothy Chargois, did not escape the wrath of the report being nailed for failure to manage his day-to-day operations and not implementing the kind of internal procedures needed to protect the district’s funds from the wire transfers and other fraud, waste and abuse by its employees.

In February, Chargois undertook efforts to better utilize staffing resources. In line with the practice and the recommendations of the Legislative Budget Board (LBB), Beaumont ISD Superintendent Chargois submitted the following plan to the Board of Trustees for reorganization of staff in order to better utilize resources and to operate more efficiently within the constraints of impending budget decisions.

In the district’s efforts to save face, it issued a 42-page response to TEA’s findings, but the answers and changes apparently come too little,

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