IU4 chief steps down after questionable charges on IU's credit card
The former executive director of the Midwestern Intermediate Unit charged private dinners and personal expenses to her employee credit card, which slipped under the radar during year-end audits but led to an investigation and her resignation, IU officials said on Thursday.
The IU board late Wednesday, after a 2 1⁄2-hour executive session, accepted Cecelia H. Yauger's resignation. One board member said she should have been fired.
An investigation that began in early March showed “a pattern of recurring and regular charges of a highly questionable nature” by Yauger using an IU American Express card, solicitor Timothy McNickle said. He said he would not speculate as to how much money was involved, pending completion of an audit.
Yauger, 55, of Grove City did not return telephone messages left at her home.
The expenses in question stretch to when Yauger became chief of Intermediate Unit 4, covering Butler, Lawrence and Mercer counties, in 2007, McNickle said.
“Based on the evidence of the investigation, a termination was more appropriate,” said J. Dayle Ferguson, an IU board member representing the Mars Area School District. “I'm not at liberty to disclose those reasons because there is an ongoing investigation, but I strongly encourage the local, state and federal authorities to conduct a prompt and thorough investigation.”
McNickle said records will go to either the Mercer County district attorney's office or local police to see whether charges are warranted.
The board placed Yauger, who earned a salary of $124,840, on administrative leave March 27 while officials examined her credit card bills.
Intermediate Unit 4 provides a variety of services to school districts in Butler, Lawrence, Butler and Mercer counties, including programs dealing with special education, curriculum development, psychological services, reading apprenticeship training and cyber education services.
It is based in Grove City in Mercer County, and serves 27 school districts that enroll 55,300 students. It is one of 29 such units in Pennsylvania.
It has an annual budget of about $120 million and receives revenue from a mix of district-paid administrative fees, grants and state and local subsidies, according to its 2010-11 annual report.
Auditor Mark Turnley of Ambridge said year-end audits generally focus on larger expenditures and that smaller ones, such as Yauger's credit card bills, are subject to random sampling.
“We had no reason to be concerned that this was something that was happening underneath our radar,” Turnley said.
Turnley, who conducted financial audits for the intermediate unit for several years, said that annual audits look mainly at large expenses. Auditors randomly pick smaller receipts to double-check, he said, but he couldn't say if that was done to Yauger's credit card bill.
As part of the annual audit, Turnley said, his firm sends questionnaires to the intermediate unit staff, including those in the accounting department, asking whether auditors need to check anything in particular. No one raised any concerns about Yauger, he said. The audit states that it followed generally accepted accounting practices. Turnley said he believed Yauger did not submit receipts with her credit card bills.
John Tucker, a member of the IU and Jamestown Area School District boards, said the situation embarrassed the board, which wants answers why the expenses went unnoticed for so long and what policy changes are needed to prevent it from happening again.
“Do we have egg on our face? No doubt about it. We're not perfect, but we have a lot of hard-working people to try to have an educational system for the kids that need it,” he said.
McNickle said that he did not believe that anyone worked with Yauger to hide the expenses.
The board named Angelo Pezzuolo, who retired as IU chief in 2007, as Yauger's interim replacement. Yauger replaced him when he retired.
Yauger's credit card bills went under scrutiny after March 4, when a Pittsburgh attorney filed a Right-To-Know request on behalf of a client seeking records about the use of credit cards by IU employees, McNickle said. McNickle said he did not know the name of the client.
As the IU compiled the documents, McNickle said, a problem in Yauger's credit card billings quickly became apparent. She made charges at restaurants, retail stores and other establishments, sometimes on weekends and holidays, he said.
Yauger “acknowledges that she is obligated to make restitution to Midwestern Intermediate Unit 4 in such amounts as the board may determine to be due and owing,” McNickle said.
IU Business Manager Robert Barber said that the agency had two credit cards, one for Yauger and another to which only he had access, primarily as a backup. He said both cards have been frozen. He referred questions to McNickle, who could not be reached for comment.
The state Department of Education “will contact the Midwestern Intermediate Unit 4's board of directors to obtain additional information to determine what actions are necessary,” spokesman Tim Eller said.
The board voted 11-1 to accept Yauger's resignation. Board member Karen Humphrey, who represents the New Castle Area School District, abstained because Yauger is her sister-in-law.
Karen Houk, a member of the IU from the Neshannock Township School District, said she voted to approve the resignation to get the IU back on track to accomplish its mission.
“As long as that investigation was hanging over our heads, we couldn't do that,” she said.