State audit found school officials in Dyer County wrongfully used COVID grant for bonuses

The Tennessee Comptroller’s Office reported that Dyer County Schools administrative staff wrongfully paid themselves over $63,000 in bonuses using federal funds intended for COVID-19 screening testing.

The bonuses were awarded to seven administrative staff members in 2021, through the Epidemiology and Laboratory Capacity for Infectious Diseases (ELC) Grant. According to the Comptroller’s Dyer County Fiscal Year 2022 Audit, the payments included more than $27,000 for the director of schools and nearly $12,000 for the district’s Business and Finance Manager.

“We were not provided with adequate documentation to support these payments as direct costs. The services provided by the administrative staff do not appear to be integral to the ELC grant; the individuals were not specifically identified to the project; and the bonuses were not explicitly included in the budget, nor did they have prior written approval from the federal awarding agency,” the Comptroller’s report stated.

The ELC grant, at the time the bonuses were issued, was intended to fund nurses, construction for testing sites, and other expenses related to mass COVID-19 testing.

Auditors also noted that the bonuses had not been specifically approved by the board of education prior to being awarded. Although the board approved a budget amendment seven months later, the board did not receive a breakdown of which staff received bonuses and the amounts.

“The current chairman of the board of education advised that he was unaware the director of schools received amounts in excess of her contract. As a result, the director of schools authorized a bonus payment to herself without prior approval of the board of education,” the Comptroller’s report noted.

Dyer County Schools Director Cheryl Mathis disputed the audit’s findings, asserting that the bonuses were properly approved. Mathis explained that the former board chairman supported the bonuses in 2021 and maintained that there was nothing improper about the payments.

“The approved budget for the grant expressly included bonus payments in the amount of $63,589.14 to the administrators, director, and other related personnel for duties and responsibilities related to the implementation and administration of the COVID testing program,” Mathis wrote in response to the audit. “When your office first raised this issue, we immediately confirmed that it was proper for ELC grant funds to be used to pay bonuses to the administrative staff for duties and responsibilities related to the implementation and administration of the program.”

Despite this defense, state auditors said they had not received any documented evidence proving that the staff who received bonuses dedicated their time to administering the grant.

“Without any supporting documentation of actual work performed on the grant by these individuals, we cannot attest these individuals were entitled to receive a bonus,” the audit concluded.