Fayette superintendent says no problem with hiring company founded by friend

vhoneycutt@herald-leader.comJune 21, 2014 

Fayette County Public Schools Superintendent Tom Shelton held a press conference to answer questions about allegations of financial mismanagement. Shelton called the allegations "untrue" and "mischaracterizations of very routine accounting procedures."

PABLO ALCALA — Lexington Herald-Leader Buy Photo

Fayette County Public Schools Superintendent Tom Shelton maintains there are no problems with his decision to hire a career and college counseling company founded by his friend and mentor.

Questions about NaviGo, a pilot program that launched at five Fayette County high schools in 2013, have been raised on more than one occasion over the past few weeks by a district employee and two school board members.

Julane Mullins, the school district's budget director, sent an email last month to board members saying Shelton violated board policy when he directed that two budget transfers, totaling $150,000, be made for NaviGo without board approval. That issue, among others, is being investigated by Kentucky Auditor Adam Edelen.

On Friday, Shelton told the Herald-Leader his relationship with NaviGo's founder Tim Hanner, whom he knows both personally and professionally, had "nothing to do with the decision to find a way to improve college and career planning in our schools."

"As a superintendent my job is to look for innovations that will improve what we do for students," Shelton said. "I am constantly looking for good ideas and I reject the notion that we should refuse to explore something that's good for kids simply because the idea originated from someone I know."

Shelton said Hanner, a retired Kenton County schools superintendent and a former Kentucky associate commissioner of education, has been "a colleague of mine for years."

Hanner, Shelton said, is one of five owners of NaviGo. Shelton said he had not met any of the others "prior to us becoming one of the pilot districts."

Shelton has previously said Fayette schools volunteered for the pilot, a normal process for new programs in education, and it does not require the use of a bidding process because a pilot is a sole source provider to initiate and create such a program.

He said the money used to fund the program was already in the district's existing budget.

"We are currently evaluating the program and its success to determine any future plans," Shelton said.

Hanner said the district entered into the contract with NaviGo not because of him, but because "of the services we provided."

NaviGo officials had done everything the company was contracted to do.

"I know everything we have done is in good faith," Hanner said.

Budget transfers

Late last month, Mullins sent the school board — and the state auditor — several concerns about the district's finances. She alleged that the district's budget crisis stemmed from an irregularity and was worsened by questionable spending. She highlighted the lack of board approval for Shelton's payments to NaviGo.

Shelton has said Mullins' allegations are inaccurate and has been cooperating with the state auditor's office. Edelen's spokeswoman Stephenie Hoelscher said she had no timetable for the investigation.

Mullins' email last month included several documents to back up her claim, including an email Shelton sent to Mullins' supervisor Mary Wright. Shelton's email, dated May 18, 2013, told Wright he wanted to process some purchase orders from his 2012-13 budget funds but didn't think it required board approval. He mentioned payments to NaviGo.

Shelton said in the email that the board had previously approved some funds for him and placed them in a contingency code because he didn't know at the time how he wanted to use them. Shelton told Wright he wanted to move those funds and he did not think the transfers required board approval.

Shelton has told the Herald-Leader he was simply paying two $75,000 invoices to NaviGo using his budget.

"In my experience in school district finance, a budget transfer is not an item that goes to the board for approval," he said. "A budget transfer is an accounting function that provides for accurate tracking of expenses."

Shelton said he recommended deleting the language that required board approval for budget transfers as part of an annual policy review because "we looked at the policies of several other school districts and found that none of them had any language about budget transfers going to the school board for approval."

Mullins, who did that research, confirmed those findings in a recent interview.

The change was presented to the school board on July 22, 2013, Shelton said.

"I did it out of my office at their request," Mullins said. "My concern is that we did something before the policy was changed. We were out of compliance. I felt uncomfortable processing those budget transfers before the board approved changing the policy."

Three school board members told the Herald-Leader they were not concerned about the decisions that Shelton made. But school board members Amanda Ferguson and Doug Barnett said they think questions remain.

Barnett said he's "afraid there might be an appearance of impropriety," and Ferguson said that is something the district should steer clear of.

"I think in this instance, we should have gone above and beyond to try to avoid any appearance of impropriety or conflict of interest since Dr. Shelton and Tim Hanner are personal friends," Ferguson said.

In the past few weeks, Ferguson has also asked Shelton how much money was paid to teachers who participated in the pilot.

Ferguson said in an interview she has concerns that, given the district's budget crunch, stipends paid to teachers for extra time to work with the students in college and career coaching at the five pilot sites over the course of the school year totaled $18,485.67.

Shelton said he understands that people are curious about other spending choices, particularly after "we have just finished making difficult decisions about developing a budget."

The Fayette County school board approved the 2014-15 tentative budget, about $428.4 million, which included a cut of about $17.5 million from the budget for the current school year.

"The reductions we made in our spending plan for next year have made the adjustments necessary to ensure financial stability and will enable us to continue to invest in innovations that are good for students," he said.

As for concerns about teachers for NaviGo, Shelton said, much like the implementation of any new program, NaviGo "required some additional training for our staff members."

"The company provided that training," he said. "In our school district, we pay our teachers for taking on additional responsibilities or attending professional development, so the stipends are part of our normal procedures, and were spent to directly support our primary responsibility to students."

'Wonderful results'

A key component of the Fayette pilot program is that NaviGo staff members train teachers to coach students as they work on their Individual Learning Plan , or ILP. The ILP is an online planning tool that the state requires, starting in sixth grade, so students have a central place to document their academic achievements, standardized test scores, extracurricular experiences, and career and college exploration. Students and teachers recently told Fayette school board members that the program had helped their schools.

"We entered the NaviGo pilot because we believed the program had the potential to improve the services we provide for students and help them make connections between the work they do in school and the path they set after high school," Shelton said. "The schools that have implemented NaviGo this year have seen wonderful results."

Fayette County Board Chair John Price said the board was aware of the NaviGo project.

"The project was funded in the superintendent's budget," he said.

Board member Daryl Love said he was glad Shelton entered into the NaviGo contract.

"As it relates to the NaviGo program expense, as a board we approve a district budget that covers current and future contracts," he said. "If an expense cannot be covered by an existing budget line item and new dollars are required beyond what has been approved, I would expect the expense to be brought to the board for approval."

But Love said that didn't apply in this case because no new money was needed.

"It is my understanding that this expense was covered under the superintendent's budget," Love said.

Hearing the results and impact shared by students in the pilot schools "confirmed the program's effectiveness," Love said.

Vice chair Melissa Bacon said that when the board hired Shelton in 2011, members had a priority of helping students navigate through preparing for college and career as they come through Fayette County Schools.

NaviGo, she said, "was a tool to complement this need."

Valarie Honeycutt Spears: (859) 231-3409. Twitter: @vhspears .

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