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SALT LAKE CITY — Footing personal credit card bills with district funds, failing to get approval for large purchases and taking months to repay personal expenditures are part of a "pattern of weak compliance" among administrators at the Washington County School District in St. George, according an Office of the Utah State Auditor report released Tuesday.
Working on a tip, auditors looked at the school district's credit card expenditures and found several examples of "risky behavior" that could lead to misuse of credit cards, according to Utah Auditor John Dougall.
Auditors did not find any fraud, Dougall said, but it can be "so easy for folks to misuse credit cards."
"We've seen cases where somebody buys a little personal item on the side and then it escalates," he said. "So that's the risk we're trying to identify sooner."
Washington County School District business administrator Brent Bills said auditors did a "great job" with the audit.
"We look at an audit as an opportunity to see what we need to improve on, what we need to do better," Bills said. "We felt they treated us very fairly."
Among the findings are 12 instances of employees failing to obtain required approvals and price quotes before making purchases with district credit cards, according to the report.
Auditors also questioned an arrangement between the district and Bills that allowed him to use a personal credit card to make work-related purchases to reap credit card rewards.
Bills said the practice was approved by school board officials and is "above board."
"School board members signed letters saying, 'We gave him the authority to do this,'" he said. "… And we've been transparent about it and everything else. I've been very, very open about this from the start."
Under the arrangement, Bills' credit card bill was addressed to the school district and paid by the district. Afterward, Bills would reimburse the district for any personal expenditures, he said.
Bills said he receives about 90,000 airlines miles each year through his credit card rewards program, which amounts to about two plane tickets a year.
School board president Laura Hesson said the board signed off on the arrangement 10 years ago and that it is written into his contract.
"We looked at it as similar to other businesses and how they would do it," Hesson said, pointing to companies that allow employees to put work-related expenses on their personal credit cards to accrue rewards.
Auditors said the bonuses appear to meet the definition of "gross compensation" from the district and, if so, should be publicly disclosed.
"The simple fact that the district was using taxpayer funds to front money for personal expenses highlights risky behavior from my perspective," Dougall said. "And that was the business administrator. It starts from the top and flows down."
Bills said the district will no longer pay for his credit card bill. Instead, Bills will pay his bill and get reimbursed by the district for work-related expenses, he said.
Auditors said Bills also used district funds to pay for travel expenses for several school board members' and administrators' family members to attend a conference.
Four of the seven personnel did not reimburse the district until the end of the district's fiscal year — shortly after the Office of the State Board of Education started auditing one of the district's high schools, Dougall noted.
"The timing was kind of interesting that it wasn't repaid promptly but was only when folks started poking around," Dougall said.
Bills disputed the implication. He pointed out that the State Board of Education audit started before the Office of the State Auditor investigation and was not looking into credit card spending.
"These things were totally unrelated," Bills said. "I can go back in time and tell you how the board has paid for every single one of these trips."
Still, the district will no longer pay for family members' flights and will require employees to make the transactions on their personal credit cards, he said.
Bills acknowledged that several administrators made credit card transactions without obtaining prior approval. He said some principals gave their district credit cards to secretaries to use without training.
"What’s contributing to the errors is we have people that are using the credit cards that don’t know the policies," he said.
Hesson and Bills said the district is clarifying and strengthening its policies regarding credit card use and is retraining administrators at the district and school level on spending policies.
"We're happy that the audit has come out," Hesson said. "It just helps us reframe our process to make sure we're managing the money correctly, to make sure we're doing everything we can. Where these things can be improved upon, we're happy to do these things."