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Here's what a months-long investigation in Richland Two found out

A "dysfunctional" board, possible misuse of funds among findings in the report commissioned by Gov. McMaster

COLUMBIA, S.C. — The South Carolina Office of State Inspector General (SIG) has released its report on the investigation regarding the practices of Richland County School District Two finding several faults, including how members of the school board work with one another. 

SIG was established by the General Assembly in 2012 with the sole purpose of "investigating and addressing allegations of fraud, waste, abuse, mismanagement, misconduct in agencies, specifically the executive branch of state government."

The investigation into Richland Two was conducted on the request of Gov. Henry McMaster after allegations of potential mismanagement, misconduct, and organizational or institutional dysfunction by the District’s elected and appointed leadership.

SIG's report lays out the agency's findings and provides a road map for Richland Two's leadership and Board to improve its delivery of quality education to its students in a unified effort.

The report covered the period of July 1, 2018, to June 30, 2022, and looked into the following areas:

  • District operations -- delivery of academic instruction to students
  • Fiscal affairs -- procurement cards (P-cards) and guidelines for usage, the Richland School District Two Foundation
  • Human capital -- staffing, Human Resources processes, Premier 100 Initiative
  • Board of Trustees -- the report on the board covered July 1, 2018 through November 3, 2022, and focused on decorum and dysfunction, board/superintendent relationship, board member travel expenses, transparency

Some of SIG's findings include:

  • Analysis of the time spent by the board on academic versus non-academic issues showed the board focused on academic agenda items only 14.2% of the time in the past four years, addressing only five academic items over the last two school years.
  • Academic achievements and test scores have rebounded from COVID-19, but still have room from improvement -- and this is the area a unified board would have the greatest impact.
  • There is no evidence where a set of uniform student discipline guidelines has been adopted by the district to handle disciplinary measures such as appeals, expulsion or reassignment to an alternative school.
  • The district had no policy regarding P-card usage, leading to improper use in some instances.
  • The district comingled funds in the district and Foundation bank accounts.
  • Bonuses and stipends to district employees -- 49 checks totaling $11,250 -- issued by the Foundation in connection to the district's Premier 100 initiative may not have been included as income on the employees' IRS Forms W-2 and it was unclear if the district withheld taxes from the income.
  • The Foundation did not conduct an annual audit, nor did it supply an annual audit to the district superintendent as required by Foundation by-laws.
  • The Foundation overstated a loss in gross receipts by at least $81,337.42 in its application for SC CARES funding. The $81,337.42 went to the district -- not the Foundation -- but resulted in the Foundation receiving the maximum award of $50,000 by SC CARES.
  • Other federal funds totaling $625,000 were awarded to the district but diverted into a Foundation account
  • The Premier 100 initiative -- created by the district to recruit and retain minority male teachers in order to diversity district teaching ranks -- although SIG said the initiative was a “laudable goal,” SIG advised the stipends should end because “providing bonuses and 24 professional development to candidates based on race, national origin, and gender was potentially inconsistent with federal and state law.”
  • The district’s Human Resources department lacked a manual of daily standard operating procedures for positions within the department
  • The district’s board of trustees operate in a dysfunctional environment and the behavior of the board “had a deleterious effect on district operations and human capital management.”
  • Some board members used personal email addresses and phones to conduct business; did not file Statements of Economic Interest (SEI) in a timely fashion, resulting in SIG seeking an opinion from the State Attorney General’s Office

Regarding individual Richland Two board members:

  • SIG found board member Lashonda McFadden is indebted to the district for $2,497.70 as of October 20, 2022. The money owed consists of school meal debt and other school-related fees for her children.
  • McFadden failed to reimburse the district in a timely manner for unused travel advance funds
  • McFadden’s public behavior and verbal confrontations lead to a no-contact letter from the district superintendent
  • Amelia McKie was fined by the State Ethics Commission for failure to file SEI in a timely fashion
  • James Manning, who is not seeking reelection, violated board policy by recording and distributing executive sessions from board meetings in April and September of 2022.

Overall, SIG found “board dysfunction and member conduct fostered a hostile environment, which created reputational, operational, and legal risk and harmed District operations, fiscal affairs, and human capital management.” SIG recommended all board members receive training on board policy.

Richland District Two issued the following response to the report:

Official District Response:

The Richland Two School District (“District”) has reviewed the Inspector General’s (IG) Report. First, the District Administration would like to thank the IG for his thorough review. The District welcomes his Report as another dimension of our ongoing quest for excellence.

Notably, the IG Report highlights the District’s continued performance in delivering on our core mission: to provide quality public education to more than 112,837 students over the four-year review period. This fact is supported by the District’s student achievement metrics included in the Report, which compare favorably with South Carolina and national data (pp. 6-8).

The District agrees with the IG’s assertion that the Report is to serve as a road map for District leadership, and the Board of Trustees, to work together to deliver on the promise to prepare students to lead and excel in their chosen pathways to success. 

The IG Report also demonstrates that the District is not immune to the pressures that are affecting public and private workplaces, in general, and education in particular – most notably: recruiting challenges, post-pandemic recovery issues, contentiousness and clashes of social values.

Equally noteworthy, the IG Report emphasizes areas where the District Office is understaffed and in need of additional resources.

Importantly, the Report’s findings do not assert intentional wrongdoing by the District. A District the size of Richland Two requires constant process evaluations and improvements, and the District intends to use the IG Report as part of our process to make such improvements. The Report found that the District has not consistently had formalized processes in place in all needed areas to ensure best practices. The District welcomes guidance from the Report on methods to continue codifying processes to ensure our District is in full compliance with state and federal law and regulations. Those improvements have begun and are ongoing and some have already been completed.

The District Administration is a team of professionals who have devoted their careers toward working for the betterment of our students, our staff and our community. The District will move quickly and decisively to continue to make needed process improvements.

The following information is provided for clarification purposes and as further documentation of no intentional wrongdoing by the District:

 District Procurement Code

  • While the District was unable to locate the opinion letter from the Division of Procurement Services approving the District’s code, it is apparent that the District and the State have been operating under the understanding that the District’s procurement code was substantially similar to the previous state code.  The District is not aware of any notification from the Division of Procurement Services or any other oversight agency stating that the District was non-compliant at any point during the period in question. An email from the Division of Procurement Services to the District as recently as February 2022 made clear that while Procurement Services encouraged the District to adopt the 2021 Model Code, the District was under no deadline to do so. There was also no indication in that communication, or any other communication with the Division of Procurement Services, that the District was not in compliance with the law.  The District has had annual procurement audits that are submitted to the S.C. Department of Education and have not identified non-compliance issues. In addition, for the 34th consecutive year, the District’s finance team received certificates of excellence in financial reporting.
  • The District has plans in place to revise the District’s Procurement Code based on the 2021 Model School District Procurement Code.

District Procurement Cards

The District has a clearly outlined procurement code and established P-Card procedures. The Procurement Team conducts daily and monthly reviews of all P-Card purchases and verifies that appropriate documentation accompanies transactions. The District identifies purchases that may be out of compliance, and those items are brought to leadership’s attention and additional information is requested. This review significantly reduces issues that can arise when using P-cards. Principals and Fund Managers approve purchases digitally using the Works system, in lieu of handwritten approvals.  In addition, account numbers and descriptions are provided in the Works system and not handwritten on receipts. In recent years, the District has strategically automated internal processes. Subsequently, these strategies created efficiencies that were invaluable during the period of remote processes that resulted from the pandemic and have helped create capacity to balance increasing needs with limited staffing. 

Strategic Plan

The District does have a five-year plan, approved by the State Department of Education that includes goals that are specific, measurable and time bound. To clarify the IG’s comments about The Pathway to Premier, this document serves as one component of the overall strategic plan, and is not the entire plan. The District created the Pathway to Premier document as a public information tool so the community at large could learn how the District delivers on the Richland Two mission, pursues the vision, upholds the Core Values, applies the Principle Practices and achieves our Universal Goals. As stated in the report, the next iteration of this single part of the strategic plan will include SMART goals just as the comprehensive five-year plan already does.

Procurement process regarding the District’s custodial services contract

As noted within the Report, the District adhered to our established procurement code in the matter involving vendor Service Solutions. The donations made by Service Solutions, which were not considered in the scoring and ranking of the proposals, were used for their intended purpose: to provide scholarships to students and to support the recruitment and retention of qualified men of color as teachers through the Premier 100 initiative. 

HHS grant funds

The District wishes to reiterate that it has not at any time intentionally misdirected or diverted District funds to the Foundation. In the case of the grant from HHS that was originally awarded in 2014-2015, the letter from HHS (dated 9/9/2014), which is mentioned in FA-6/ Recommendation 6, lists the Grantee as Richland School District Two Foundation. The District supports the Report’s recommendation that it should adopt additional internal controls and processes with the Foundation to ensure that Funds intended for the District are deposited into a District account. 

HR Employee Investigative Process

The District’s human resources department strives to conduct thorough investigations that include legal guidance as appropriate to ensure the investigation is complete and all documentation is reviewed prior to determining the appropriate action. Nevertheless, the District welcomes the IG’s recommendations on how to improve upon the investigative and review process in HR matters and will be evaluating them. 

Richland Two Education Foundation

The District is profoundly grateful for the support of the Richland Two Education Foundation over the past two decades and is committed to working with the Foundation to put in place an MOU as recommended by the IG, to support the Foundation’s efforts to update its By-Laws and to address other concerns that the IG has raised. The District is confident that the volunteers who have served the Foundation have dedicated their time and talents in good faith and with the sole intention of supporting the Richland Two students and their families as well as our teachers.


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