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JTSD plans audit of credit card

Published October 10. 2018 12:56PM

The Jim Thorpe Area School District board of directors have authorized a forensic audit into the use of a credit card for expenses.

The board’s president says he is confident that the card has not been used improperly, but wants to clear up “rumors and innuendo.”

A group of residents have spoken out at recent meetings questioning why the card is in Business Manager Lauren Kovac’s name and scrutinizing statements for the account which they obtained through right to know requests.

“To assure the public that there has been no improper use of the credit card, the board of directors will recommend that a forensic audit will be performed on the credit card from its initiation to the present — from the time we got the credit card to the present will be audited,” said board President Dennis McGinley.

On Monday night, the board authorized $15,000 for a forensic audit into the use of a Capital One Spark Business credit card opened by the district in 2009.

The district has paid back the expenses on the card for the past 10 years, but Kovac said Monday night that the board never approved her opening the account, or putting her own name on it.

McGinley opened Monday’s regular school board meeting by reading a lengthy statement defending Kovac and her use of the card.

He said the card had been recommended by then-Superintendent Barbara Conway for the convenience of purchasing district and other supplies. It is in the district’s name as well as Kovac’s.

The board approved a motion in September directing Kovac to stop using the card for district business effective immediately.

‘No intent to hide’

McGinley said business credit cards can be registered to individuals or a business entity. He said it made sense that the card be registered in Kovac’s name because she reviews all district policies and purchases.

“There was no intent to hide this from the board,” McGinley said.

When board member Glen Confer asked if minutes showed that the board approved the card, Kovac said she got the card without board approval. McGinley said he was misinformed when he said the board approved it.

“Wait a minute, how can you get a credit card without board approval?” Confer said.

“Because it’s in my name,” Kovac said.

McGinley said the district has been audited numerous times in the 10 years since the card has been used, and he personally believes the card has not been used improperly.

He said board members had recently reviewed all transactions dated 2015-18 and found that all but one were accompanied by appropriate receipts. He said that expense was “readily explainable.”

Misunderstanding

“The issues surrounding the Capital One credit card are a combination of misunderstanding, and misinterpretation of some purchases, and semantics,” McGinley said.

When asked if there is a limit on how much Kovac can spend without board authorization, Superintendent Brian Gasper said the district now uses a debit card which is limited to $500. If the business office wishes to spend more, it must ask the board.

District resident Paul Montemuro, who has filed numerous requests about the district’s finances under the state’s right to know law, spoke during the public comment period of the meeting about the documents he obtained.

Montemuro questioned why the card was used throughout the summer months, when school was closed, if it was only meant for emergencies. He said there are also hundreds of dollars of expenses for restaurants around Carbon County, and questioned if they were for school-related use.

“Go through that credit card, your head will spin,” he told the board. “Molly Maguires, PJ’s, Bonnie & Clyde’s, Terracotta, Nick’s Lake House. What are they doing up there, buying stuff up there?” he said.

Montemuro also asked if the district received cash back rewards for expenses paid for with the card. Capital One offers Spark Business cardholders 2 percent cash back on all purchases or frequent flyer miles.

He also claimed that the district is missing $2.5 million in payments due from Youth Services Agency because the business office never sent YSA a bill.

The cost of the forensic audit is limited to $15,000 for now, but the board’s finance committee chairman, Dr. Clement McGinley, said that amount could go up if the board approves it.

In concluding his statement announcing that he would recommend the forensic audit, board President Dennis McGinley said he stands by Kovac.

“I want to reinforce my support of Mrs. Kovac and my faith in her character, honesty and integrity,” he said.

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