Audit of Tornillo ISD finds hundreds of thousands of dollars in unexplained expenses; ex-superintendent slated to be reported to authorities
Updated On: Jan 16 2014 06:21:37 PM CST
A state-mandated forensic audit found there were more than $400,000 of unexplained expenses when former Tornillo Superintendent Paul Vranish was at the helm of the school district.
The audit, conducted by Lauterbach, Borschow & Company examined financial data for the school district between 2006 and 2011.
According to the audit, Vranish opened a separate bank account with Fabens National Bank for the school district that handled $555,491 between 2008 and 2011.
The audit found that $315,226.73 of expenses from that account were "unsubstantiated," meaning there was no documentation justifying or explaining what the cash was used for.
Vranish said he opened the separate bank account, with the support of the school board at that time and the regular district auditing firm to handle deposits and payments from parents for the district's TAKS trips.
The TAKS trips, which would take the students to places like Washington D.C. and Hawaii, were trips meant to reward students who did well in the TAKS exams.
The district paid for most of the trip's expenses for students but parents had to pay a $100 deposit.
Vranish said some parents would pay that deposit in payments which would create a lot of transactions. He started the separate bank account to avoid "overwhelming the district's business office," he said.
Despite Vranish's claims that the board was aware and had approved the use of the second bank account, the audit states "trustees were not aware of this account during this operation."
Current Board President Javier Escalante, who's served on the board since 2010, said: "I was really surprised. I never knew that of that separate account. I never even heard of it. There's no record that the board approved it."
Escalante said he believes Vranish opened and maintained the account "behind the board's back."
Vranish, over the phone on Thursday, said the firm that annually audited the District, Gibson Ruddock Patterson LLC - CPA's also knew about the separate bank account and had included samples of that account in the district's yearly audits.
"There's no way large amounts of money like this would be missed in an audit, even in an audit sampling," said Vranish.
Gibson Ruddock Patterson LLC did not return phone calls asking for confirmation of Vranish's statements. Escalante said he did not believe the district's auditing firm ever looked into the second bank account.
The audit also states that between 2006 and 2011, there were unsubstantiated disbursements, or payments totaling $109,777.67 to Vranish from the District's general fund.
According to the report, the expenses "lacked supporting documentation." The audit also states "some of the additional pay was approved solely by the former Superintendent."
Vranish said the expenditures are unsubstantiated because the auditors never contacted him to explain the payments. The report states auditors did not have any discussions with Vranish and only analyzed documentation provided by district personnel and did not ask for additional documentation.
Vranish said that most of the employees who worked in the district's business office at that time no longer work there and auditors did not try to reach them.
"No one who had knowledge about this were contacted," said Jim Darnell, Vranish's attorney.
Vranish also purchased computers and other electronics that he had shipped to his home for which he received reimbursement by the district, according to the audit.
"There was no documentation to support how they were necessary for the District's purpose," the audit says of the equipment purchased by Vranish.
Vranish said he had the equipment shipped to his home because it was "faster and cheaper" than shipping it to the district headquarters but said he could not remember the equipment he ordered.
ABC-7 checked on Amazon and several other retailers and discovered no difference in shipping prices for a Tornillo address and an El Paso or Horizon address.
The audit also found Vranish acted outside his scope. "There were checks that were signed by Mr. Vranish in certain years where he did not have authority to sign," according to the audit.
Vranish denies he did anything under the radar. "I'm not trying to duck any questions. If someone would have told me back them that I was doing something wrong, I would have stopped."
Since the TEA determined there was a lack of internal controls at the district, the board has instituted new policies to prevent unsubstantiated expenses. The district's credit card will be kept in a vault and only checked out to employees by the Business Manager for flight costs and emergency purchases.
All reimbursements must come with documentation and board members are required to review checks five days prior to the check processing and can cancel a payment.
The audit recommends the district establish a system to allow 'whistleblowers' to report perceived wrongdoing.
Darnell said the board is on a mission to slander his client. "The board decided they were going to pay money to make Paul Vranish look bad."
Escalante disagrees and said he is disappointed. He reported the audit to the Texas Education Agency on Thursday and said he planned to send the findings to the FBI, the District Attorney's office and the Sheriff's Office.
"I feel the students in this district were let down. There was so much money going into this account," Escalante said "I'm pretty sure that this is illegal and we're going to get to the bottom of this."
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