State Auditor Adam Edelen is investigating a complaint over whether the Montgomery County school board violated state nepotism laws when it hired the superintendent's wife as director of special projects/exceptional children, spokeswoman Stephenie Hoelscher said.
Hoelscher said the office had requested documents from the district and was conducting interviews.
"Our work is continuing," Hoelscher said. "We would like to speed up the process and would hope that district officials would want to do the same and would cooperate fully with the examination."
Anna Powell, wife of Superintendent Joshua Powell, began her job this month, after being selected by a Montgomery County school district hiring committee.
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The state's anti-nepotism law says that no relative of a school superintendent shall be an employee of the school district. But there are exceptions. A superintendent's spouse may be an employee of the district if he or she has at least eight years of service in school systems and if he or she doesn't supervise certified or classified employees.
Montgomery County officials said the hiring of Anna Powell meets that criteria.
"I'm not sure why the state auditor's office is investigating something of that nature," Joshua Powell said.
"There is absolutely no conflict, which is supported by Kentucky statute," he said. "We followed every rule, regulation and went above and beyond any procedure that was required."
In response, Hoelscher said, "The auditor's office takes all allegations and complaints seriously."
Joshua Powell said he had been the subject of other audits and investigations by other agencies in the past several years. He said he had committed no wrongdoing.
"I have had a microscope on my back for seven or eight years," Joshua Powell said. "I have been audited more than any superintendent in the state."
Joshua Powell said that for the state auditor's office to investigate him over something that he had already vetted with attorneys and the Kentucky Educational Professional Standards Board is "a waste of taxpayers' dollars."
"We went by the book," he said.
His wife's hiring "wasn't my decision," he said. "But I do know she has exceptional experience in that area."
The school district's website said that prior to joining Montgomery County Schools, Anna Powell accrued 10 years of service in other Kentucky public schools.
She has served as a school psychologist, assistant principal/curriculum specialist, and preschool coordinator, the website said. She was director of special education in Hancock County, according to Joshua Powell. Anna Powell is eligible to be certified as a superintendent in Kentucky, the website said.
The district made some changes to supervisory roles to accommodate the departure of the previous school improvement director who oversaw special education and whose position is not going to be filled, district officials said. In an interview with the Herald-Leader, Assistant Superintendent Phil Rison said that he, not Joshua Powell, would supervise Anna Powell.
Rison said he, not Anna Powell, would supervise the special education assistant director.
Rison and Joshua Powell said Anna Powell would not be supervising any other employees. Only principals oversee special education teachers and aides, they said.
A job description was not changed specifically for Anna Powell's hiring, said Montgomery County Board of Education Chairman Kenney Gulley.
"It had to do with trying to also accommodate those other responsibilities of the now vacant position that we are not going to refill," he said.
It is not unusual for district officials to change job descriptions, Gulley said. He said Anna Powell's hiring followed policy.
"It's all legal. It's all legitimate. I'm qualified for the job," Anna Powell told the Herald-Leader."I supervise no one."
She said her goal and the district's goal is to be among the top 10 in the state.
Rison said that as chair of the committee that hired Anna Powell, "I stand by that decision. It was a unanimous decision reached by our committee. She was the best candidate for the job."
Joshua Powell said the state auditor's office had interviewed everyone that had anything to do with the hiring.
"It's been an arduous process," he said.
Alicia Sneed, attorney for The Kentucky Educational Professional Standards Board, said her office had not received any complaint regarding the hiring.
A separate examination of Montgomery County Schools by Edelen's office, released in August, did not find any wrongdoing but contained five findings related to weaknesses in controls that could increase the risk for fraud or abuse, Hoelscher said.
The auditor's office has conducted several special examinations of school districts in Kentucky this year.
Powell became superintendent in July 2011. The five findings covered a time frame before and after he was hired.
The examination found the board should monitor the superintendent's work schedule, that there were unnecessary travel expenses incurred by district employees on two occasions and that the district spent $800 in condolence flowers and candy that should have been paid privately by employees.
In addition, said Hoelscher, "Several concerns expressed to the professional auditors in our office could not be substantiated through documents or interviews and did not result in findings."
Investigations regarding other issues involving Joshua Powell were mentioned in an agreed order between Powell and The Kentucky Educational Professional Standards Board dated Oct. 28.
The agreed order said that in May 2010, the Office of Education Accountability, a legislative agency, substantiated 12 of 20 allegations levied against Powell, then superintendent of Union County Schools.
The Office of Education Accountability 2010 report, obtained by the Herald-Leader, said that the allegations involved Powell making hiring decisions that circumvented the district's site-based councils. Karen Timmel, acting director of the Office of Educational Accountability, said Tuesday she could not comment.
The Kentucky Educational Professional Standards Board pursued only one of the charges — that Powell failed to ensure appropriate certification for those in his employ, the standards board order said.
Powell filed an extensive rebuttal to the OEA final report disputing its findings and denouncing its investigation, the standards board order said. Ultimately, the Kentucky Department of Education took no personnel actions related to any of the findings in the OEA report.
The agreed order said that Powell acknowledges that in his "quest" to improve academic performance in Union County, he violated state law and regulation by failing to ensure appropriate certification "for all those in his employ."
Powell was "adamant" that at all times he acted with the best interest of students in mind and without willful intent to violate the law, according to the order.
As part of the agreement, Powell must show the standards board written proof that he has received training in the area of educator certification.
Powell told the Herald-Leader he had evidence that he had done nothing wrong in Union County even on the certification issue and pointed to the fact that the Kentucky Department of Education had taken no action against him.
Powell said he was following federal law but was nonetheless "written up" by the Office of Educational Accountability.
"The only reason that I settled on that was to prevent more time and another $50,000-plus to deal with something that is absolutely ridiculous," he said.
Powell said that as a result of what he views as unwarranted investigations, "It is my life's mission ... to assure that there is some oversight in ethics and accountability in our state organizations."