Auditor: Ex-school leader got unapproved benefits

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Associated Press

Posted on March 8, 2013 at 5:01 AM

LOUISVILLE, Ky. (AP) — A former superintendent of a struggling Kentucky school district pocketed nearly $224,000 in benefits and payments that weren't authorized by the local school board during an eight-year stretch of "unconscionable abuse," the state auditor said Thursday.

The findings by state Auditor Adam Edelen's office were turned over to the FBI.

The review of former Dayton Independent Schools Superintendent Gary Rye found he was reimbursed $146,276 for retirement-related benefits not in his contract, Edelen said. Rye was improperly paid $47,429 for sick and annual leave days, charged $21,464 to a district gas credit card for his personal vehicle and received thousands of dollars in expenses for meetings he didn't attend or never occurred, the report said.

Those unapproved benefits and payments amounted to $240 per student, Edelen said.

It occurred in a small district in Campbell County — across the Ohio River from Cincinnati — where most students are eligible for free- or reduced-priced school lunches, and where athletic teams were prevented from traveling long distances for games as a cost-saving measure, he said.

"That's an unconscionable abuse of scarce resources," the auditor said. "This fellow who's entrusted to educate those kids enriched himself at their expense."

Rye retired last summer after leading the northern Kentucky district for 15 years. His attorney, Jon Alig, said he had not yet seen the auditor's report. He declined immediate comment on the allegations, which were also turned over to the Kentucky Teachers' Retirement System and the state Revenue Department.

"I haven't seen anything," Alig said. "I'd have to look at anything before I can comment about anything."

The auditor's office started its review last fall after Rye's successor, Jay Brewer, raised concerns.

Brewer, who became superintendent last July, said the allegations were "terrible."

"In a day and age where schools are in desperate need of funding, to see money taken away from students, instruction and teachers is just a tragedy," he said.

Edelen's office said that Rye intimidated staff members responsible for issuing checks if they questioned him.

Dayton school board attorney Matt DeMarcus said the board was never alerted to the alleged abuse by an independent auditor hired to keep tabs on district finances.

"The independent auditor's remedy for that was to speak to the former superintendent," DeMarcus said.

DeMarcus said the district intends "to get every penny back. We have a lot of ways of doing that. One is we're going to go after the former superintendent, and the other is go after the (independent) auditor and their insurance."

The district also has its own insurance policy meant to cover employee theft, he said.

The alleged abuse by Rye occurred while his district was beset by academic as well as financial problems. The district's middle and high schools were deemed "priority schools" by state education officials because of chronic low student performance.

The state has assigned a special team to help the district put together a plan to improve student performance.

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