School leader repays $2,800 after Register inquiry

A northwest Iowa school district is facing scrutiny after using taxpayer money, including a district credit card, to purchase thousands of dollars' worth of food and alcohol — and reimbursing staff members without receipts.

Administrators with the 600-student Lawton-Bronson School District purchased lunches at Chipotle, Jimmy John’s and Buffalo Wild Wings in the Sioux City area, often as thank yous for staff members, according to district expenses and administrators.

Last September, Superintendent Jeff Thelander used his district credit card to pay for a $297 celebratory meal for several teachers, a medical researcher and his friends at a Sioux City-area steakhouse, where they had a $22 Atlantic salmon entrée, a $39 dry-aged ribeye steak and three glasses of wine, leaving a $50 tip, according to a receipt obtained by The Des Moines Register.

After the Register’s inquiry into the charged expense, Thelander paid back the school district $2,800 for reimbursed alcohol and expenses for which he had no receipts.

The expenses have prompted complaints from some staff and residents, who question whether the district is misusing taxpayer funds.

“I will be the first to admit that mistakes were made by both Mr. Thelander and the board during the past year,” Board President Steve Olson told The Des Moines Register. “Once identified, these mistakes were promptly and appropriately addressed.”

But district leaders and business managers also said reasonable purchases of meals and other expenses are part of doing business, especially when travel is required for training. They deny any misuse of funds, saying many of the meals were purchased to boost morale, in acknowledgment of hard work or as a thank you to staff or community members.

However, State Deputy Auditor Tami Kusian said she “doesn’t know of any public purpose” to buy alcohol with school district money, a statement reiterated by other school financial experts. The Register obtained copies of two district receipts with wine and beer purchases.

“And I certainly think the rest of the meal would be open to some scrutiny,” Kusian said.

Teacher Patrick Sutton, who contacted The Des Moines Register with concerns about what he described as a free-spending culture, said there appeared to be “a general pattern” of pizzas and sandwiches routinely brought back to campus for some employees. Yet, he said teachers will receive only $250 for supplies, often spending their own money for classroom items.

“I love my district. I worked here for a long time,” he said. “The money should be spent on the kids.”

Other Iowa school districts require employees to purchase items with their own money and later be reimbursed after submitting receipts. In Lawton-Bronson, however, items are charged first to district cards and receipts turned in later.

Sutton said he filed a complaint this fall over the matter with the Iowa Board of Educational Examiners, which investigates concerns that pertain to license-holding employees such as teachers or administrators.

The state board could neither confirm nor deny that the complaint had been filed, because an initial complaint and investigation are not public record.

Olson said he was not aware of a complaint, but reiterated his support of the meals. “I have little doubt the district would have any problem explaining its position and justifying its expenditures,” he said.

Expenses audited

Kahill’s, the South Sioux City, Neb., restaurant where Lawton-Bronson educators and a noted cancer researcher dined in September, is known for its elegant wine display and its sea-to-table meals that bring fresh ocean fish to western Iowa.

The dinner was a “thank you” for the speaker’s participation in a school event the following day, which included a morning presentation and break-out sessions with science students, Thelander told the Register.

“In lieu of a very high speaker fee, we have a meal where teachers in the district and a couple of friends (of the doctor) ... have a nice dinner,” he said. “That was a fair exchange for the level of what this doctor came in and did during the course of the day.”

The Register found the Kahill’s expense while reviewing district credit card statements for the 2014-15 school year, obtained through a public records request. When asked if the district had approved any other alcohol expenditures, the business manager pointed to a similar dinner at Kahill’s the year before, which included a Sam Adams beer.

The school district is audited yearly, but financial experts say such audits typically serve as a spot check of purchases.

Auditors ask for policies on matters such as meal reimbursements, which in Lawton-Bronson is set at $7 for breakfast, $12 for lunch and $24 for dinner for pre-approved meals within the state. More expensive meals are allowed as approved by the superintendent. The Kahill’s meal equated to about $37 per person.

Kusian said an attorney general’s opinion requires government agencies to document the public purpose of meals and other expenses. In this case, Thelander told the Register that the meal fostered community connections and a relationship that benefited the school.

Meal rules murky

School finance experts say there’s not a clear-cut answer to what meals should and should not be purchased.

“The overriding criteria is, what’s the public purpose of it?” said Andy Nielsen, a deputy state auditor. “Is it needed for the program?”

Mike Hamilton, a retired school business manager who oversaw district spending for 40 years, said the amount school districts are willing to spend on meals often comes down to the comfort level of school leaders and elected school board members.

While the Kahill’s meal didn’t prompt Sutton’s complaint, the lunches and dinners he saw brought back to campus did. Lawton-Bronson leaders offered a similar explanation: Meals were purchased to help motivate or reward staff.

Chad Shook, the elementary principal in Lawton-Bronson, said such purchases were customary, and recalled a dinner at Red Robin that records show was expensed for $65.

“From time to time, we require or ask teachers to come in on their own time,” Shook said. “We don’t pay them a stipend to come in off contract hours, and for that Mr. Thelander has always been kind enough to take them out to dinner.”

Thelander also recalls bringing secretaries a meal when they were asked to do extra cleaning, purchasing meals for teachers and other staff as a thank you, or picking up the tab for administrators while they worked long hours on a school project.

During the course of the school year, Thelander spent $91 at Chick-fil-A, $107 at Red Robin, $181 at Perkins, $202 at Jimmy John’s and $336 at Buffalo Wild Wings, among other Sioux City-area restaurants, according to a Register review of credit card purchasing data.

“The main thing with the meals are, when you’re working long hours with people beyond the regular day,” Thelander said. “It was a small token, a thank you for that work that was done.”

Missing receipts

During the Register’s inquiry, Thelander acknowledged he’d lost many of his receipts for restaurant and gas purchases he made with the district credit card.

Thelander said he’d kept eight months of receipts — the majority of the school year — in a large manila envelope, instead of filing them regularly with the district as is required of other employees.

Despite the lack of receipts, district credit card bills were paid regularly, which school financial experts contacted for this story questioned.

Kimberly Brouwer, the district’s business manager, said expense totals that appeared on card statements were looked over each month.

“Typically I would know what the majority of his purchases were without needing to ask,” she said, “but if there was something I didn't remember or something that was a larger dollar amount, I would ask for clarification.”

But Nielsen, a state auditor, said that “districts should not pay credit card bills without the detailed documentation behind them. Otherwise they don’t know what they’re paying for.”

Requiring receipts is standard business practice for school districts, said Doug Nefzger, president of the Iowa Association of School Business Officials.

“We’re making sure those receipts are turned in and matched up,” he said of his experience as a school business manager. “If there’s not a receipt, we work with the vendor to get a copy, or we’re talking to the employee for reimbursement.”

And that’s what happened in this case. The Register first contacted the school district about credit card spending, requesting information under the state’s open records laws, in early June.

According to district records, from late June to early November, Thelander wrote five reimbursement checks totaling about $2,800 for receipts he could not produce.

Although he’s maintained that purchases were appropriate, Thelander said of the lost receipts: “I feel terrible about it. It’s a hard thing to explain to your family, and it was a very hard and expensive lesson.”