A report found that transportation employees of Maryland’s largest school system misused purchase cards, including buying personal items and merchandise that violated policy.
In May 2022, the Montgomery County Office of the Inspector General started an investigation to find out whether there was evidence that Montgomery County Public Schools Department of Transportation employees misused their P-cards. The IG also wanted to evaluate whether employees complied with P-card policies and procedures, as well as recommend what can be done to mitigate vulnerabilities.
The investigation was conducted after consulting with Montgomery County police, who were also probing an alleged misconduct by the school system’s former Department of Transportation director Todd Watkins and former assistant director Charles Ewald over their use of purchase cards.
The two were placed on leave in November 2021, after Montgomery County schools notified police about “possible financial improprieties” in its transportation department; and last June, Bethesda Beat reported that they were no longer employed by the district. Ewald’s employment was terminated in February, and Watkins resigned in March.
The inspector general’s audit found that cards issued to Ewald were used to make approximately $133,000 worth of purchases that were prohibited by policy, and more than $1,600 were deemed “personal” by the inspector general’s office.
The IG report also cited the findings of another audit conducted by the Board of Education’s Internal Audit Unit (IAU), which listed items Ewald bought using P-cards, such as drag racing tires, an Apple Watch band, a sport kayak roof rack, and gift cards from Home Depot and Amazon. The IAU investigation started after questionable purchases were identified in September 2021 on P-cards issued to Ewald.
The IAU, according to the IG report, observed that the former assistant director “entered misleading descriptions of certain purchases” into the organization’s payment system, “possibly to disguise personal purchases as work related.”
“It was an MCPS auditing group who initially identified a potential issue, which was followed by the district hiring professional forensic auditors to ensure our work in this matter was as thorough as possible,” Montgomery County schools spokesman Chris Cram said in a statement, adding that more than $800,000 has been recovered.
IG investigators focused on purchases that were prohibited by policy (such as gift cards), purchases of items that are highly desirable and easily stolen, and items that can be converted for personal use.
According to the report, Ewald, Watkins and other school department of transportation cardholders made prohibited purchases of furniture, gas, travel and entertainment-related items, and they “frequently failed to comply with MCPS policies” related to the use of purchase cards.
Among the purchases the IG found were gift cards totaling thousands of dollars and office furniture purchases, totaling more than $78,000.
The Montgomery County Office of the Inspector General recommended continued cooperation with law enforcement to get back the stolen funds and prosecute law violations.
Cram said that police may still apply charges as part of their investigation, but “because there is still an investigation and work to be done, we cannot comment further at this time.”
Investigators also recommended the use of “compliance monitoring features,” frequent reviews of all school and central office departments, and the development of policies that require rotational audits.
Cram said that as a result of the school system’s internal investigation, Montgomery County schools have identified a new vendor for buying buses, revised structures that monitor finance and procurement, reviewed purchasing card transactions, retrained staff who hold P-cards, evaluated access to cards and decreased purchasing limits.