Legal doubts shroud loans

Richmond County schools Superintendent Charles Larke said it was accepted practice and commonplace to issue pay advances to employees, but legal and accounting experts question the practice.

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School board members said this week they were stunned to learn that more than $600,000 was doled out in pay advances or loans.

The superintendent, however, said members knew and the practice is legal.

Anne Proffitt Dupre, a University of Georgia law professor recognized nationally as an expert in education law, said she was shocked to read about the allegations.

"It certainly seems very troubling as a matter of law, certainly worth investigation, but as a matter of judgment if nothing else, to think that, even putting a good spin on this, that this is helpful, that this isn't what the school is supposed to be doing," the co-director of the Education Law Consortium said.

It would take some time to research the issue to determine its legality, but she said she could think of nothing that would allow for such advances or loans. She also said she would advise her clients against the practice.

Although he also couldn't comment on the legality of the issue, Rick Malone, the executive director of the Prosecuting Attorneys' Council of Georgia, said officials can only do what they are authorized to do in writing.

"Absent a policy or a law, you don't have the authority to do those things," Mr. Malone said.

Dr. Larke said Thursday that he was operating without a written policy, but that board members had given him the OK to give advances. A policy would be too restrictive and members thought he needed flexibility, he said.

Repeated attempts by The Augusta Chronicle to learn details of who received taxpayer money, how much and why have been denied.

Dr. Larke said Thursday he didn't want to embarrass anyone who received money, and school board attorney Pete Fletcher denied three different Georgia Open Records requests seeking the information. The third request was crafted using the legal advice of David Hudson, an attorney for The Chronicle and legal counsel for the Georgia Press Association.

On Friday, Mr. Fletcher's paralegal said records associated with the investigation, even those that pre-dated the investigation, are not open to the public at this time. The investigation is looking at records for the past three years, so those older than that can be released to the public. But names of those who received taxpayer money and why will be blacked out, she said.

In an e-mail Friday, Mr. Hudson held to his legal opinion that open records predating an investigation remain open during the investigation. Names and dollar amounts given to them are also open to the public.

Anita Faglier, the director of finance and accounting for the Richmond County school system, said Thursday that Mr. Fletcher advised her and Controller Gene Spires not to speak with anyone about the investigation.

Mr. Spires skittishly answered a question or two, but then felt "uncomfortable" to say anything else when Dr. Larke asked that he answer questions for The Chronicle on Thursday.

Ms. Dupre said officials should always make every effort to "avoid even the appearance of impropriety." The issue raises a number of questions, including who was denied their requests for money.

"I don't think the taxpayers in Richmond County are going to feel particularly trusting of the school board, of the school superintendent, excuse me, even if somehow it is determined this is acceptable at some level," she said.

Dr. Larke said Thursday the money advanced to employees already had been earned by them, citing teachers as an example. Teachers are 10-month employees but can be paid over 12 months.

State law allows new teachers to get paid early in August, Dr. Larke said. Otherwise, they would work more than a month without getting paid.

But other school system employees also received pay advances, including bus drivers and paraprofessionals.

Jeff Miller, an Augusta State University professor of accounting, said he was surprised to learn of the financial transactions.

"As government employees we're held to higher standards than if we were to have our own business because the funds we are using are government funds, not our own funds," he said. "It doesn't sound like good accounting standards at all, especially in a government setting, to advance money to people."

"Loans" and "advances" are synonymous, Dr. Miller said, and neither should be given out.

"If I got an advance, it would be a loan," he said. "To me it would be the same thing as a loan because I'm not entitled to that money until the end of the month."

Reach Greg Gelpi at (706) 828-3851 or greg.gelpi@augustachronicle.com.