No fraud found, schools to ask county for money

Halifax County School officials have learned there was no criminal wrong doing over the past two years, when the school system misspent at least $800,000 in state money, a school spokesperson said.

The question of whether a crime was committed along with mismanagement of the school system’s funding has hung over the school system for months.

Spokesperson Keith Hoggard said the state auditor’s office told school officials they have determined no fraud was committed in overspending money, or in other financial dealings by school employees.

Hoggard also said school officials have been meeting with county leaders and plan to present a plan to the Halifax County Commissioners on Monday, asking for the county to hand over more than $850,000 so the school system can repay the state money it owes.

The school system has been under a financial strain for months, after new Supt. Geraldine Middleton found the budget for the present year did not allot for increases in a number of spending categories.

In October she went to the Halifax County Board of Commissioners, explaining the school system did not have enough money to pay all its bills and meet payroll that month, so the board advanced $250,000 of its annual allotment to the school system.

Middleton cut several positions, decreased hours of other workers, and called in the North Carolina State Auditor to look at problems with the school system’s accounting and financial records.

The school system learned it owed more than $850,000 to the state, money it had overspent from the state budget during those two years, and eventually financial officer James Sweet was fired.

It has put off asking the county for the money while its books were being audited. In December, Eddie Burke, a certified public accountant with the company, said his firm had been employed by the school system to audit its books for the 2005-06 year, but found it was not able to do the job for because of the condition of the financial records and information was not presented to his firm in a timely manner.

Eventually his firm was able to piece together an audit, but in so doing found, among other things, that state funding was reduced but school system spending was not, there was no management oversight of the budget or of finance department staff, the books were out of balance by millions of dollars but the finance department staff did not know it, bank accounts were not being reconciled monthly, and a host of other accounting problems.

At that time, the auditing firm said it could not determine if any fraud had been committed, but said there were several instances of questionable spending and that would require additional investigation if the school system wanted to know if that spending represented criminal wrongdoing.

Now the question of repaying the state money must be addressed. County officials have expressed a hesitancy to take on that cost. Because the county is obligated to give equal funding to all the school systems it supports, state and county officials have expressed concern Roanoke Rapids and Weldon might be due additional money, if the county gives Halifax the funds.