Flagstaff Unified School District Superintendent Mike Penca made national news last month when a special investigation uncovered a north Iowa school district’s $2.2 million in improper disbursements made over eight years, during which Penca served as interim superintendent.

Penca said he has been transparent with the FUSD Governing Board about his experiences in Iowa, including the re-audit process that resulted in this investigation.

FUSD Communications Director Zachery Fountain stated there are no scheduled actions or responses to the report from the district at this time.

Before relocating to Flagstaff, Penca served as the interim superintendent of the Mason City Community School District (MCCSD) from July 2016 to June 2017, following the departure of Superintendent Anita Micich, who had held the position since 2009.

In the report, released Dec. 28, Auditor of State Mary Mosiman identified a total of $2,238,952.08 of improper disbursements issued from July 1, 2009 through August 31, 2017, including $1.3 million in unapproved salary increases given to MCCSD administrators and $171,998.36 for Micich’s resignation package.

A total of 66 employees, current and former, who received these salary increases were listed in the report. Micich received the most funds at nearly $474,000 in total improper salary and benefits over the eight-year period. Penca ranked 15th on the list, with $39,000 total improper funds.

MCCSD officials and board members have displayed frustration with the investigation, and especially the release of these names, the Globe Gazette reported.

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Dave Versteeg, current MCCSD superintendent, wrote in a district-wide email after the report was released, “There are 28 current employees of the district (along with 32 former employees) listed in the report as being improperly overpaid. These current employees did nothing wrong. The notion they were improperly paid is based on procedural process not in their control, not legal rule.”

Penca began working for MCCSD in 1996 as a kindergarten teacher and later served as an elementary school principal at various schools and executive director for learning supports and PK-4 programs.

“I held myself to high standards of service and integrity during my 20-year career at MCCSD as a teacher, administrator, and interim superintendent,” Penca said in a statement. “The Iowa Auditor of State report highlights systemic findings with processes and procedures put in place prior to my time as the interim superintendent in Mason City. I worked diligently and collaboratively with the MCCSD Governing Board and the subsequent superintendent in 2017 to address matters as they came to our attention.”

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The investigation was requested by district officials, who were concerned by the allocation of salary increases and contributions to tax-sheltered annuity (TSA) accounts, during a meeting regarding MCCSD’s reaudit of the 2015 fiscal year.

Fountain explained that FUSD has a system of checks and balances in place to prevent such incidents. This system includes adhering to the Uniform System of Financial Reporting, which calls for bringing contracts and budgetary items before the governing board for approval. The FUSD finance team also works closely with regulatory agencies “to ensure compliance with applicable laws and standards of practices.”

He added that the annual audits conducted by the district’s finance team have received above-average ratings from the Government Financial Officers Association and the Association of School Business Officials International.

“The findings in the Mason City School District audit report do not reflect the high standards set in [FUSD] policies and practices,” Penca said.

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Kaitlin Olson can be reached at the office at kolson@azdailysun.com or by phone at (928) 556-2253. 


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