Possible Fox Audit Repercussions

27 May

With this post, I will pull from the audit the possible repercussions proposed by Fox in its responses to the audit. Fox’s response was embedded in the document after each recommendation from the state auditor.

  • The Board of Education intends to consider the following actions: (1) seek recovery of the unauthorized compensation paid to Dianne Critchlow, (2) notify the Public School Retirement System (PSRS) about the unauthorized compensation to determine whether correction or forfeiture of pension benefits being paid to Dianne Critchlow is warranted, and (3) submit the record of unauthorized compensation to the Jefferson County Prosecuting Attorney’s Office to determine whether prosecution is warranted. (page 14-15)

Identical action items were proposed pertaining to Jamie Critchlow and former CFO/asst. supt. Mark McCutchen. As with all proposed actions, it is up to Fox residents to ensure that these actions are performed and not just “considered.” I urge everyone to contact the board to tell them you are watching.

I think a lawsuit might be necessary to recover the Critchlows’ ill-gotten gains. Sending letters to request repayment has not worked, although it did lead to some purchased items being returned to the district. There is the potential for restitution after a criminal conviction, but I would not count solely on that. Another possibility is to report Critchlow’s unreported earnings to the IRS and the state Department of Revenue so they can pursue collection of back taxes.

As for submitting information to the JeffCo prosecutor, I also think the state Attorney General and the feds need to be involved. I am not totally sure I trust our county legal system to get the results we need. The local legislative delegation has called on the AG to keep a close eye on the forthcoming legal proceedings.

  • The Board of Education intends to consider the following actions: (1) seek recovery of the unauthorized improper and/or questionable charges made to credit cards assigned to Dianne Critchlow and her administrative assistant, (2) submit the record of improper and/or questionable credit card charges to the Jefferson County Prosecuting Attorney’s Office to determine whether prosecution is warranted, and (3) in the event of a prosecution, notify the Public School Retirement System (PSRS), and/or the Public Educational Employees Retirement System (PEERS) about the potential need for correction or forfeiture of pension benefits. (page 26)

A law passed by the state legislature in 2014 (HB 1217) allows for the forfeiture of retirement benefits by public employees convicted of certain felonies. I don’t think this applies to the Critchlows, however, since their crimes took place before the law took effect. Crimes included in the law are felony stealing, receiving stolen property, forgery, felony counterfeiting, bribery, and acceding to corruption, if committed in connection to one’s work duties. Perhaps there are other provisions to go after the Critchlows’ pensions. They should be able to reduce the pensions, since they are now based on fraudulently inflated salaries.

  • The Board of Education intends to consider options for (1) recovery from George K Baum & Company the excessive interest costs resulting from the deficient structure of certain bond financings underwritten by George K Baum & Company and (2) submitting a complaint against George K Baum & Company to the Securities and Exchange Commission (SEC) to determine whether discipline is warranted for the underwriter’s seeming failure to adequately inform and disclose the detrimental structure of the above referenced bond issues to the Board of Education. (page 32)

This is related to bonds that were issued by the district. The bonds were issued in a way that could cost the district an extra $5.6 million in interest costs. The state auditor issued a report in 2013 condeming the non-use of competitive bids in selecting bond underwriters. The auditor found that all JeffCo school districts used “negotiated sales,” thus saddling taxpayers with unnecessary costs.

  • During September 2015, the Board of Education adopted MSBA Policy DIE titled “Audits,” which provides for a solicitation of independent audit services every three years. (page 50)

This is instead of just letting Dan Jones to the audit every year.

What About Other Administrators?

The audit notes on pages 9-10 that salaries for all district administrators were inflated during the audit period, apparently due to unauthorized additions made by McCutchen. For example:

The total additional compensation for the district’s 49 administrators ranged from $115,983 to $417,088 resulting from the base increase and administrator longevity for the 2013-2014 school year.

Should the board go after this money? Sure, (most of) the recipients were not culpable in this, but they received money that was never promised to them. I say they should all have to pay it back. The district is in tough budget times, is it not? Such a measure is not contemplated in Fox’s audit response.

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One Response to “Possible Fox Audit Repercussions”

  1. kris thomas May 28, 2016 at 8:25 am #

    I would certainly follow thru with ALL actions and I pray ALL of them are approved and our district gets their money back, she loses her retirement and she goes to jail. I also feel the school board during that time needs to also be “let go” as they are the ones that did NOT do their checks and balances of how the district was being run. Shame on them!

    Liked by 1 person

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