- Associated Press - Wednesday, March 26, 2014

CHEYENNE, Wyo. (AP) - An independent audit found questionable management practices in the Wyoming Education Department when it was under the control of Superintendent Cindy Hill. But the audit left it up to state attorneys to determine if any laws were broken.

The audit released Wednesday reported that state law may have been violated and the state may have to pay back an undetermined amount of federal funds.

Without naming any individual, it blamed “management override” of internal financial controls that occurred under Hill and recommended further review by the state attorney general and the U.S. Education Department.

The independent auditors who conducted the audit are not permitted to determine whether laws were broken. That determination must be made by the attorney general’s office.

Renny MacKay, spokesman for Gov. Matt Mead, said that the governor found the audit “troubling” and that he hoped Hill could explain “how these actions took place.”

Hill was traveling Wednesday and not available for immediate comment, according to her office.

However, Hill issued a statement through her office that did not address the audit’s findings about the education department’s management practices in regard to internal controls.

Instead, Hill’s statement addressed other audit findings that dealt with other state Education Department issues and noted she was removed from the agency after seven months into the fiscal year that was audited. It also quoted a sentence regarding state compliance in a general cover letter accompanying the audit, which also looked at other state agencies that administer federal money.

Altogether, the audit listed nine separate issues with the education agency’s spending. But the one that involved the internal-controls management problems occurred solely under Hill’s administration and received the harshest finding available to the auditors.

The override of those financial controls resulted in a possible case of nepotism involving about $6,700 in federal money; a potential conflict of interest involving an independent contractor who received about $394,000 in federal money over two years; possible improper payments of $40,500 to another independent contractor; and possible misspending of up to $105,145 in federal money and about $257,000 in state money.

John Masters, Hill’s deputy superintendent, said in an email that “these matters would have been easily resolved” had Hill and her staff been able to provide information and explanations to the auditors.

House Speaker Tom Lubnau, R-Gillette, said the audit confirms testimony from agency staff of the abuses that occurred when Hill ran the agency in 2011 and 2012 and underscores why lawmakers removed her as head of the agency in 2013.

“When was the last time you read a federal audit report that said an elected official was misspending money?” Lubnau said in a telephone interview. “I think it’s an exclamation point on a problem that we already knew was there.”

Hill was removed as head of the agency last year by a new state law that created a governor-appointed director to run the department. Lawmakers and Mead enacted the law because of concerns about how Hill was running the agency. She has denied any wrongdoing.

Hill filed a lawsuit, and the state Supreme Court ruled earlier this year that the law is unconstitutional because it left the superintendent with too few duties.

Hill is seeking to return as head of the department as soon as all legal issues are resolved.

Meantime, a House committee investigating whether Hill committed any impeachable offenses remains active.

Lubnau, who chairs the panel, said the audit would be reviewed by the investigative panel. “After the committee members have an opportunity to read and digest the report, then we’ll figure out what the next steps are,” he said.

The audit is required by the federal government to account for how states spend federal money. It is paid for by the state.

Hill has cited other audits that found no questionable spending under her administration, but those audits weren’t as thorough in their review of agency spending as the audit released Wednesday.

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