A conflict of interest resulted when Fayette County school officials gave a principal permission to work as a paid consultant, a Kentucky Office of Education Accountability, or OEA, investigation found.
Investigators also found that three other procedural violations occurred involving Joel Katte, the former Meadowthorpe Elementary School principal, who recently took a job in Central Office.
Katte told the Herald-Leader in response that he would never knowingly violate school board or Meadowthorpe decision-making council policies.
An Aug. 13 OEA memo, obtained by the Herald-Leader under the Kentucky Open Records Act, said that then-superintendent Tom Shelton gave Katte permission to work as a paid consultant for the Franklin Covey organization and that other district officials were aware of it.
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Katte used vacation or personal days to do the work.
Meadowthorpe adopted a Covey program for students called "The Leader in Me" before Katte became principal, and Katte said in an interview that he implemented it when he became principal.
He took the paid consultant job in 2013, the memo said. After parents complained that the consultant job represented a conflict of interest, Katte resigned from Franklin Covey in August 2014.
Shelton told OEA investigators he encouraged Katte's decision to resign from Covey, the memo said.
The memo said Shelley Chatfield, a staff attorney for the district, told OEA officials she didn't find Katte's consultant work to run afoul of board policy regarding conflict of interest, but she thought it wasn't the best practice for him to continue as a paid consultant.
OEA officials found that Katte's arrangement with Covey rose to the level of "an indirect financial conflict of interest" and that the arrangement conflicted with Fayette school board policy.
OEA officials decided that by Oct. 1, Katte, who recently became administrator of Fayette County's alternative programs for at-risk youth, should participate in three hours of state Department of Education training about financial conflict of interest.
On Tuesday, Katte gave the Herald-Leader a statement in response to the OEA decision:
"When I had the opportunity to learn and grow professionally through accepting additional consulting work with Franklin Covey on my personal time, I was excited," he said.
"Because I am a person of high integrity, I personally sought and received approval from my elementary director, Loraye Jones, human resources director Melodee Parker, and former superintendent Tom Shelton," Katte said. "Dr. Shelton was very supportive, encouraging and proud of the extra work I took on. When I was made aware that the district realized that there could potentially be a conflict of interest back in August of 2014, I stopped.
"I take great pride in living a life of purpose, faith, integrity, honesty and service to others. Had I known then what I know now, I would not have accepted the position with Franklin Covey."
The OEA report said Katte declined to tell investigators how much he earned from Franklin Covey.
The OEA also investigated whether the school board and the school council gave approval for a two-day event called Leadership Day.
At Leadership Day, people from other schools who have paid a $50 registration fee went to Meadowthorpe to learn about "The Leader in Me" program.
In 2013 and 2014, the event raised a total of $17,850, the memo said. Some of that money was used for event expenses. Other proceeds were used for professional development and teacher training and to pay substitutes while teachers were trained. Proceeds of $1,000 to $1,500 from each Leadership Day were given to the fifth-grade class to help finance an annual trip.
One allegation said the school decision-making council was denied the opportunity to vote whether to hold Leadership Day in March 2015. OEA investigators determined the school council was entitled to place Leadership Day on the agenda and to vote whether to hold the event.
The OEA also determined that conducting Leadership Days without school board approval violated school board policy.
OEA also investigated an allegation that Katte did not provide the school council with adequate budget information.
"While OEA found evidence that some form of budget information was provided to the council on a regular or monthly basis, the consensus seemed to be that there was no serious discussion regarding budget issues and school spending," the memo said. "The council was not sufficiently in the loop on budget matters concerning the raising and spending of thousands of dollars."
By Oct. 1, Katte and the current members of the school council are required to receive three hours of state Department of Education training on school activity funds, the memo said.
In regard to that action, Katte said, "As outlined in the (OEA) report on multiple occasions, I did seek ongoing answers and guidance on all these questions and issues because I never would knowingly violate board policy or council regulations."
Erica Snow, a member of the council, told the Herald-Leader she was "grateful" for the training.
"Any elected official should be properly trained" on the rules, Snow said.
Katte's time as principal at Meadowthorpe was the subject of public discussion at a school board meeting in late 2014, when supporters and critics spoke out.