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Oklahoma Education Department spent $2.3 million through slush funds, audit claims

An investigative audit conducted by the Oklahoma auditor's office shows $2.3 million was spent by the Oklahoma Education Department through undisclosed accounts. The audit claims the money was used to pay for drinks and food at education conferences.

“Anytime you gather funds as a state employee, on state time, those funds should be deposited into a state account. Obviously, that didn't happen,” state Auditor and Inspector Gary Jones said. “When you start looking at how the money was spent, I think there were obviously ways the money was spent that were not legal, like alcohol.”

Jones said where the investigation goes from here is up to law enforcement, the attorney general and elected officials.

The attorney general's office received a copy of the audit and will review it, said Diane Clay, director of communications.

Donations in question

Some of the companies that made donations to the funds had multimillion contracts with the Education Department for various education services, the audit says.

The audit notes that because state employees solicited donations from vendors “they may feel compelled or obligated to make those donations in order to maintain their contracts.”

The donations were used to pay for various expenses at two annual conferences hosted by the Education Department:

• The Superintendent's Annual Leadership Conference brought together educators from across the state for two days filled with legislative updates and professional development.

• Encyclo-Media was an annual conference for librarians and teachers.

“Whatever the reception committee decided to serve — that was paid for by private sponsors, just like the governors conference,” Garrett said.

The funds were hidden not only from the state auditor's office but also from members of the nonprofit, according to the audit.

Garrett said the funds were not hidden and that they were included in the full audit reports given to board members.

Board meetings of OCIC never included discussion about parties, bands or booze, said Debbie Arato, the retired superintendent of Moore Schools and a board member for about a year.

“As a taxpayer, I don't want to pay for it,” Arato said. “As a board member, I would have never approved it.”

Joe Siano, former president and current board member of OCIC, said he didn't realize the nonprofit was involved with the leadership conference or Encyclo-Media until 2009 when they were told the state department would no longer handle the group's finances.

The accounts were disclosed to the board in April 2009, the report says.

“That was the first time there was ever any indication that there was any overlapping,” Siano said.

He said the board did serve its purpose of providing cost-effective professional development to teachers and administrators, but he said due to a drop in membership and dwindling finances, OCIC board members voted to dissolve. This will be the last year the nonprofit holds professional development.

State schools Superintendent Janet Barresi is listed as a board member in 2010. However, she was not aware she had been placed on the board upon taking office, nor has she attended meetings, said Damon Gardenhire, spokesman for the Education Department.

Jones said the remaining balance in the accounts, roughly $90,000, has been transferred to the Oklahoma State School Boards Association, but that they have not followed up to determine what has become of the funds.


Randy Ellis and Andrew Knittle, Staff Writers


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