The superintendent of the Tuba City Unified School District should lose his teaching and superintendent credentials for gross financial mismanagement at his last school district, which might close or go bankrupt, auditors said.

Those are the findings of accounting experts appointed to investigate what went wrong at Peach Springs Unified School District. It's a district of 200 students on the Hualapai nation that overspent its budget by about $1.5 million in one year under former Superintendent Eugene Thomas.

Thomas is currently the superintendent in Tuba City. He contends the disputed expenditures were approved by the school board and the Mohave County Superintendent of Schools and that he was never contacted by the auditors before the release of their report.

Auditors at Veriti Consulting, appointed by the Arizona State Board of Education, found the following conditions at Peach Springs while Thomas was superintendent:

Thomas allegedly hired and overpaid unnecessary staff members, giving bonuses to favored employees. More than half of the employees working in the district were unneeded.

Voter-approved bond money reportedly was used to pay for $47,000 worth of dirt for a playground, three automobiles that had no known business purpose and $35,000 of Thomas' salary.

$91,000 worth of computer equipment, including "huge, extravagant computer monitors for district personnel," was purchased in fiscal years 2006 and 2007.

Junior high students had only grammar books, no English or literature books.

District employees, including Thomas, may have used district vehicles extensively for personal travel.

$64,000 was spent on a keyless lock system that is expensive to maintain and is malfunctioning now.

An 11,000-square-foot building for junior high students was constructed for fewer than 56 students, at a cost of more than $1.5 million, even as enrollment declined. It was not needed, as the existing school was far from overcrowded.

During Thomas' tenure, money that was supposed to be used to pay a construction contractor appeared to have been used for other purposes, "some of which were absolutely unnecessary for the education process."

Kindergarten teachers had no materials for teaching the curriculum in their room, only arts and crafts supplies.

Records linked to financial transactions have reportedly been lost, misplaced or destroyed. There is also a discrepancy between the amount of tax money withheld from school employees' paychecks and what was paid to the Internal Revenue Service.

Minutes for some of the school's governing board meetings couldn't be found at the district's offices.

Thomas allegedly submitted questionable financial information to a government agency while attempting to renegotiate district debt.

LONG-TERM IMPACT

"The impact of Mr. Thomas' mismanagement will be felt in Peach Springs for many years to come and will compromise the long-term quality and availability of education to this community," the consultants from Veriti Consulting wrote in recommending that Thomas lose his credentials to teach or be superintendent.

The firm handles forensic accounting and fraud investigations.

Thomas is now superintendent of Tuba City Unified School District, where he began working last summer.

If Thomas were to lose his credentials to teach or to be a principal or superintendent, he would be barred from those jobs in public schools in Arizona, said Vince Yanez, executive director of the Arizona State Board of Education.

Thomas has not been charged with any wrongdoing, placed on leave or lost his credentials.

He is under investigation by the Mohave County Attorney's office and the Arizona State Board of Education, according to each of those agencies.

Teachers and parents in Tuba City have petitioned the school board to remove Thomas following allegations that he gave raises and new vehicles to favored employees and used an employee purchase program he was not eligible for to buy himself a plasma television.

Thomas has denied those allegations, contending he followed all applicable district rules.

Tuba City Unified's governing board has also asked its attorneys to start an investigation involving Thomas' administration, but have released little information about what is being investigated. That report is due out Feb. 21.

ALL EXPENDITURES APPROVED

Thomas declined to answer specific questions from the Daily Sun about the consultant's report regarding his former school district.

Instead, he submitted a general written statement, saying all school expenditures in Peach Springs had been approved by the school board. The Mohave County superintendent of schools had failed to cut off expenditures when the school district exceeded its cash on hand and its budget, Thomas wrote.

Actually, Mohave County Superintendent of Schools Mike File said he told Thomas in October 2006 that he "needed to reduce his staff and cut frivolous spending."

And when File stopped issuing the teachers at Peach Springs their paychecks last spring as the district ran out of money, Thomas sued him.

Thomas acknowledged in June that his district in Peach Springs was at least $850,000 in deficit, according to signed court documents.

"He's a discredible individual making discredible statements and the district should be terribly concerned that someone would respond in that manner," File said.

NO RESPONSE YET FROM BOARD MEMBERS

One member of the Tuba City Unified School District Governing Board responded to phone calls Thursday and Friday. Others declined comment or did not immediately answer.

Chiropractor Alan Numkena, the newest board member, said he had not read the report related to Thomas' former district and did not have a copy.

He referred other questions to board president Linda Honahni, who did not return a phone call Friday.

"I pity that district up there if they won't take steps after seeing the Veriti Consulting report and seeing his response," File said. "The people and the children should be very concerned."

ON THE WEB: Read the report online: www.veriticonsulting.com. Cyndy Cole can be reached at 913-8607 or at ccole@azdailysun.com.

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