Employees receive rubber checks

Peach Springs school district seeks line of credit to cover insufficient funds

KINGMAN - A total of 28 employees of the Peach Springs Unified School District are awaiting word from the Mohave County Treasurer's Office as to when they will be able to get their end-of-year payments.

Employees received checks totaling roughly $160,000 last Friday from the office of Mike File, Mohave County superintendent of schools. His office has done payroll for the PSUSD for the 11 years he has been superintendent and even before he took office.

However, there were insufficient funds in the school district account against which those checks, also known as warrants, were written. File had received 14 of the 28 bad checks as of Wednesday morning.

"By law, my office must do the payroll for that school district," File said. "I can no longer issue checks (until the matter is resolved).

"The state has told me that pursuant to ARS 15-304, if a school district runs out of money, the county superintendent is not to issue any more warrants."

An emergency meeting of the PSUSD Governing Board was held Tuesday night at Peach Springs Elementary School. The board has five members, but only President Adeline Crozier, Leslie Parker and Artie Vaughn were present among about 25 people.

District Superintendent Gene Thomas was contacted Wednesday morning.

"I have no comment right now," he said.

An attempt to contact Parker failed. Vaughn was reached at her office and handed the phone to Crozier. Crozier declined to answer questions, saying the school district attorney would contact the Miner.

Franklin Hoover, school district attorney located in Flagstaff, called several hours later.

He was asked how the PSUSD got into its financial dilemma and when governing board members were first apprised of it.

"I have no information on what led to the budget situation," Hoover said. "Neither do I know the earliest it was brought to the attention of board members."

Hoover said he would call Thomas and try to get some answers. He did not re-contact the Miner by mid-afternoon.

The PSUSD has about 40 employees. Year-round employees are due to receive checks Friday on a different schedule from end-of-year payments, but will not get them, File said.

File attended the meeting Tuesday night. Deborah Herbert and James Schoppmann, deputy attorneys in the civil division of the Mohave County Attorney's Office, also were present.

"It was pointed out when the issue first arose May 29 with budgets and cash on hand, one thing we did with cash on hand was worked with the county Treasurer's Office, school superintendent and (Chase) bank to see if it would be willing to extend a larger line of credit," Herbert said. "Thomas advised that $200,000 would be sufficient for the balance of the school year.

"The bank approved and sent us loan documents we took to the meeting. Board members approved a resolution authorizing the increased line of credit, and the president signed off on it."

That authorization was to be delivered Wednesday to Lee Fabrizio, Mohave County treasurer.

The line of credit is expected to be in place Friday, at which time Fabrizio's office could call in the warrants for issuance of payment, Herbert said.

The credit increase would enable the state Department of Education to wire funds to Fabrizio. Herbert said his office should get about $158,000 by June 15.

A financial review and audit may be done on the PSUSD, but it is not a function provided by the county, she said.

"Mr. Fabrizio said he would volunteer his time to do an investigation on how they got where they are now," Herbert said.

"I do not feel any improprieties or illegalities happened, but it may help the school board to understand where finances went, and Mr. Fabrizio is willing to help."

File said being there and hearing discussion on the situation leads him to believe board members were not kept apprised by Thomas of all that was going on and how bad things are with district finances.

"My office has a way of knowing about funds and expenditures," File said. "The district was in real trouble at the end of the year.

"We kept monitoring. (District officials) said they were supposed to get this money and that, but it never came."