State audit of Indian River School District finds issues


DOVER — A state investigation has uncovered several financial improprieties in the Indian River School District, many involving the district’s former chief financial officer, Delaware’s auditor said Thursday.

Among other things, investigators found that former CFO Patrick Miller used taxpayer money to make payments of more than $20,000 and $32,000 to the Indian River Volunteer Fire Company and to a local Boys and Girls Club while he served as board president of those organizations.

Auditors also found that Miller requested state accounting system login information from his subordinates so he could begin financial transactions using their credentials and then approve those transactions using his own credentials.

Most of the money paid to the fire company was for an all-terrain vehicle used by the Sussex Central High School athletics department. Investigators said Miller purchased the vehicle on behalf of the fire company and sold it to the district for $4,565 more than the fire company paid.

Money given to the Boys and Girls Club involved funds from a federal grant intended for special education and related services for children with disabilities.

Auditors also found inappropriate or questionable purchases of gifts and food, and a lack of documentation to account for employee salaries.

The report covered the period from July 2011 to June of this year.

“For the entire period of our investigation, the district lacked formal policies and procedures for any of their financial processes. Not only did the district lack appropriate oversight and internal controls to prevent and detect financial improprieties, the blind faith placed in the CFO allowed him to create an environment ripe with intimidation tactics, favoritism, and nepotism,” the report said.

Miller was put on paid administrative leave in April. He subsequently resigned effective June 30.

Miller previously served as business manager for the Brandywine School District in New Castle County. He resigned from that position in 1998 and later pleaded no contest to tampering with public records.

Indian River officials have not disclosed what led to the state audit or Miller’s resignation. They scheduled a news conference Friday to respond to the report.

“The Indian River School District has submitted its response to the state auditor’s preliminary findings but has not yet reviewed the auditor’s final report or Mr. Wagner’s remarks concerning the special investigation,” district superintendent Susan Bunting said in an emailed statement Thursday.

In a written response included in the audit report, district officials said they have hired an experienced and “well-reputed” director of business. They also said they are closely examining all spending and will ensure that funds are “more prudently expended” in the future.

The audit report was released as Indian River district residents prepare to vote Tuesday in a referendum in which the district seeks a tax increase of 49 cents per $100 of assessed property value to raise an additional $7.35 million in local revenue.

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