Hatchett's expenses not at issue, teacher contracts are
Auditors found irregularities in hiring practices, not superintendent's spending
BEREA — At the regularly scheduled board of education meeting this past March, a parent accused former school superintendent Diane Hatchett, PhD, of having contributed to the district’s financial woes by spending lavishly on out-of-town travel.
The Edge’s investigation into the finances of Berea Independent Schools, however, did not find a trend of inordinate personal spending by Hatchett, but did find irregularities in how staff were contracted and budgeted.
Contract anomalies
In a review of District audits performed from 2017 through 2024, the most egregious central office infraction discovered by auditors was not the superintendent’s travel and expenses, but that eight District staff members working without a contract last year. The audits were performed by the Lexington CPA firm, Summers, McCrary & Sparks.
“During testing of payroll, it was noted that eight employees had memorandum of understanding [MOU] agreements instead of contracts with the District. We recommend management have all employees complete a contract,” the auditors wrote in their report dated October 25, 2024.
District finance director, Nathan Sweet, told The Edge in an email that this did not mean the eight employees were unauthorized hires, but that a state statute had not been followed. “The MOU documents had been treated as contracts but the opinion of the auditors was that standard employment contracts should have also been issued along with them,” Sweet wrote.
The eight positions in question were all time-delimited, grant-funded MOUs, according to Sweet. Today, two of the eight employees are still working in the District as contractors to the state education department, two others have been absorbed by the District’s general fund, three positions have been eliminated, and one more position, created with a federal grant, will be eliminated at the end of next year, according to Sweet.
Hits to general fund
In the eight years of audits reviewed by The Edge, 2024 was the only year auditors found this contract irregularity. Hatchett was superintendent from July 2019 through March of this year when she was placed on administrative leave by the District’s board of education after a 1.7 million dollar budget deficit for the District was made public.
The improper hiring practice is not related to the previously reported overstaffing issues in the District, according to Sweet. “It was really more of a procedural issue,” he said.
The Edge did not find any record of Hatchett having informed the Board of the eight contract workers’ grant funding status, such as that certain grants were ending, or that at least two of the employees’ respective salaries would be absorbed by the general fund.
“I do feel like it would always be best practice to make the board aware when a change in funding has an impact on the general fund,” Sweet said.
“Moving forward, we will ensure that all employees execute formal contracts with the District as part of our standard hiring and employment practices,” the District responded in the audit report.
Limousine and NBA tickets
Accusations that Hatchett had flown first class to out-of-town conferences using District funds, and other claims have circulated about the former superintendent. These included that Hatchett had hired a limousine, attended an Indiana Pacers game and spent wildly on hotel accommodations in New Orleans, all on the District’s credit card.
However, a review specifically of these expenses as they appear on the District’s credit card statements, evidences a fuller story. There was $7,100 paid to Gold Shield limousine service in Lexington, for a chartered bus for the eighth grade trip to Washington, DC, last spring.
There was a $1,400 charge to the District for tickets to an Indiana Pacers game last March. The tickets were for Berea Community’s girls basketball team. The team held a fundraiser to repay the District for both the cost of the tickets and of chartering a school bus for their transportation to and from Indianapolis.
A hotel charge for accommodations and all incidentals at the Hilton New Orleans Convention Center came to $5,056 in the fall of 2023. The District paid the charge in full. The charges included the cost of Hatchett’s stay, and that of three board members who accompanied her to the annual National Alliance of Black School Educators annual conference in New Orleans that year.
Hatchett’s roundtrip ticket for that conference was $1,111, with $100 paid to change her seat after bad traffic cause her to miss her initial flight home. There was no indication either way on the credit card statement as to whether Hatchett had flown with luxury status.
Auditors, Board reviewed all T&E
These expenses were all reviewed numerous times, including by the auditors, but others before that, including the accounting department and the board of education.
“Any reimbursement submitted on appropriate forms and approved by the board, were reimbursed,” Karen Wilhoite, manager of accounts payable at the District told The Edge.
In the audits reviewed, there were no travel and expense violations cited either before or during Hatchett’s tenure.
“I don’t think Dr. Hatchett spent outside the limits of what is normal,” Wilhoite said.