Indian River former finance officer under investigation

A former state senator says taxpayers of Indian River School District should recoup thousands of dollars that the state auditor says were improperly spent by the district finance officer.

“What he has done has hurt future referendums,” said George Bunting, a former state senator who served both Cape Henlopen and Indian River school districts.

Already, the Indian River school board has approved another operating expense referendum for March 2, 2017. The referendum, approved Dec. 14 by the board, is similar to a $7.35 million one that failed Nov. 22 by 20 votes. Voters are again asked to approve a 49 cent tax increase to help pay for salaries, technology and school expenses.

Patrick Miller, former chief financial officer for Indian River, made more than $162,000 a year when he was suspended with pay from his job in April. He officially retired in June.

A state audit released Nov. 17 – five days before Indian River’s failed referendum – noted about $80,000 in invalid payments and another $24,000 that lacked supporting documentation. More than $50,000 went to two organizations for which Miller served as president – the Indian River Volunteer Fire Co. and the Boys & Girls Club of Oak Orchard/Riverdale.

“People had no idea about the transfer of money to the fire company and Boys & Girls Club,” Bunting said.

Board member Heather M. Statler, who was elected in 2015, said she would support any action that would allow the district to recoup misspent funds.

“In my opinion, we should have rights that allow us the opportunity to ask for those funds to be returned,” she said. “We are all taxpayers, and it is important to me that accountability occur at all levels.”

Superintendent Susan Bunting declined to comment whether the district would pursue legal action against Miller.

George Bunting – a distant relation to Susan Bunting through a previous marriage – said he knew Miller through the fire company, and others who knew Miller were shocked when the news broke.

“There wasn't any inkling that this was being done,” he said. “There was a blind trust with him.”

In November, Bunting emailed Attorney General Matt Denn about holding Miller accountable for funds the auditor says were misspent.

In response, Denn wrote that the auditor's report has been forwarded to the Office of Civil Rights and Public Trust – a unit created to address questionable spending. “We can't provide any additional comment at this time since it is a pending investigation, but investigators from my office may be in contact with members of the board as the investigation proceeds,” Denn said.

Bunting said a former special education teacher had once told him that Miller was misspending federal money earmarked for special education, but nothing had been proven. The audit stated money from a federal Individuals with Disabilities Education Act grant went to the Boys & Girls Club.

“We conclude that, not only was it inappropriate for the district to use the federal grant funds for something other than special education services within the district, the transactions are questionable given the CFO's role at both the district and B&G Club,” the audit states.

Bunting said he was also shocked when he found out Miller made more than $162,000 a year – an amount exceeding the state budget director's salary. “I was floored by that. To me, that wasn't justified,” he said.

Bunting said some school board members had told him Miller had them over a barrel and threatened to quit if his salary were reduced.

“The school board still made the final call on that,” Bunting said.

Board member James Hudson forwarded questions to board President Charles Bireley, who did not respond.

Miller was hired as chief financial officer/finance director in 1998. Based on estimates from a Delaware pension calculator, Miller could receive as much as $7,700 a month, more than $92,000 a year in retirement.

Sen. Ernie Lopez, R-Lewes, said he plans to refile a pension bill that would stop individuals convicted of certain crimes from collecting a state pension. He introduced the bill in 2015, but it died in committee.

“We need to look for ways to make sure protections are in place for the taxpayer and for people who are doing their job,” Lopez said.

However, even if the bill were to pass in the 2017 legislative session, it is unlikely to apply retroactively to Miller, who would continue to receive his pension.