Denver school board in the dark about misuse, misconduct costs to the district

The Denver Public Schools Board of Education's finance and audit committee on Monday learned that three suspected cases of misuse and misappropriation of district assets were referred for formal action last school year, but the elected members were provided no additional details.

Auditors issued reports associated with the accusations of misappropriation of public assets to the district's human resource and legal departments, Craig Ramsey, internal audit manager, told directors Scott Esserman and Kimberlee Sia.

After a brief presentation Monday, Esserman asked what the associated costs were for the district.

“There are dollar amounts in the report” Ramsey said.

After stammering with his response, Ramsey added, “Since they become personnel issues and confidential reports, I think this is probably all I will say about that.”

Esserman said he wanted to see the data, even if doing so required personnel information to be redacted.

While Ramsey declined to say what the loss to the district may have been for these cases, the summary report to the board indicated the median loss for government entities averages $150,000 for each incident.

These three were among the 17 reports of misuse and misappropriation last school year, which ended June 30. While nearly half of the 17 were duplicate reports, the number is in stark contrast to six years ago, when only four such reports were made, a district report showed.

The admission about the misappropriation cases came during what’s called an “IntegraReport” on the district’s fraud hotline, an anonymous tool that employees and the public can use to report suspected fraud, waste or abuse of district assets and fiscal misconduct.

Misuse or misappropriation of public assets — Ramsey said — accounted for about 5% of all the hotline calls.

Of the 186 non-duplicative reports last school year, just 11% of closed cases were substantiated.

“When a company has a fraud hotline, it gets reported sooner,” Ramsey said.

More than a third of the reports are still in process.

“HR, Diversity & Workplace Respect” was the category with the single most complaints last school year, with 145 reports.

Monday’s status summary on hotline calls, however, provided no insight into the type of reports likely to be found valid or invalid nor any details on the cases that proved more problematic, such as those that lacked information or were found inconclusive.

DPS has used the hotline for six years.