LITTLE ROCK – The prosecuting attorney’s office is looking into a state audit finding that the recently retired Clinton School District superintendent did not live in his district-provided housing and let a family member stay in it rent free with the district paying the utilities.

State auditors, during the routine audit of the district’s books, also found a number of repeat findings, including 10 employees being paid a total of $45,250 above their contracts for additional duties not approved by the School Board and that the board approved the payments retroactively in July 2012, and an employee being paid $1,000 above their contract for additional duties not approved by the board.

The audit found that significant portions of those additional payments were documented by time sheets not reflecting actual hours worked, but created to justify a salary stipend previously agreed to by the federal the district’s federal coordinators and/or the superintendent.

Superintendent Scott Jones, who took that position July 1 when James McGaha retired, told the Legislative Joint Auditing Committee last Thursday that he was aware of all the audit findings and that they were being addressed.

"Being the new guy coming in I’ve had … one workshop with the financial staff and I’ve been very involved with budgeting and paying bills," Jones said. "Anything that needs approval comes across my desk now."

Jones also said he lives in the house provided by the school district and plans to live there as long as he is superintendent.

"I think I’ve been told that if I move out of the house I will not have a job," he joked. "This is something that shouldn’t have happened, I agree."

School Board Chairman Kirk Pryor told the panel that the superintendent’s house is sandwiched between the elementary school and senior high school and is offered as a benefit to the superintendent.

Deputy Legislative Auditor Larry Hunter told the panel during the meeting that living in the house was a part of McGaha’s contract and that his son lived in the house rent free. The school board met Dec. 17, 2012, after discovering the problem, and approved renting the house to the superintendent’s family for $1 a month retroactive to July 1, 2011.

McGaha also reimbursed the district $3,901 for the cost of the utilities and rent on Dec. 9, 2012.

Hunter told Sen. Jimmy Hickey, R-Texarkana, the committee’s chairman, that the audit finding was the only one of the five found by auditors to be turned over to the prosecutor’s office for investigation.

Pryor told the committee the board did not know that renting the house violated state law.

"We were aware after the fact that he had stopped living in the house," Pryor said. "We really weren’t aware of all that until it was past happening and there really wasn’t much we could do at that point, so we just basically forced him to reimburse us for what we paid him for it."

Other findings in the audit included a number of accounting entry errors and abnormal account balances, such as negative receivables and negative payables, also existed on the district’s balance sheet, but couldn’t be traced to actual transactions. These were repeat findings, according to the audit.

Also, the district could not document that proper procedures were followed to select a construction manager for the junior high addition and renovation.

The fifth finding involved a May 18, 2012, contract the district signed for a combined position not included on the classified salary schedule for the 2012-2013 fiscal year. On July 12, 2012, the board approved the position, which changed the existing classified salary schedule without submitting the proposal to the board’s personnel policy committee as required under state law.

On Sept. 27, 2012, the board repealed the previously approved change to the classified position and submitted the proposed change to the personnel policy committee. On Nov. 19, 2012, the board again approved the classified position.

The state audit did not identify the new position created.

The school district, in its response to the audit finding, said all changes in salary scheduled are now being presented to the personnel policy committee 10 days before final board action.

After the committee meeting, Jones told a reporter he is addressing all of the audit’s findings.

"I’m doing the best I can to work with everyone there, the board and the staff, to get everything corrected and make us the best school we can be," he said.