Director may have exploited flaw

State auditor: Payroll glitch possible in Laurel incident

By MOLLY MURRAY
The News Journal

A flaw in the state payroll system may have allowed the Laurel School District's former finance director to manipulate his paycheck to increase his salary, State Auditor Thomas Wagner Jr. said.

"I don't want to go into great detail" about the flaw, Wagner said, noting he is concerned others could take advantage of the payroll system glitch before state officials can correct it.

The Laurel School Board accepted the resignation of former finance director William S. Hitch Jr. on Dec. 16 after district officials confronted Hitch about the alleged theft.

Laurel Superintendent John McCoy said he was reviewing payroll records when he noticed a discrepancy in Hitch's paycheck. McCoy said he did not know how much money Hitch may have diverted, nor from which funds it came.

Still, some are questioning why school officials haven't turned the matter over to police.

State Rep. Greg Lavelle, R-Sharpley, said he was concerned that district officials turned to state education officials and the auditor rather than police for assistance.

"It is an understatement of grand proportions to say that it is disheartening when this kind of 'event' occurs in our schools," Lavelle wrote in a letter to state Education Secretary Lillian Lowery. "As you are well aware, it undermines the good work of so many and has the ability to negatively impact the future of our districts in terms of referendums and related issues."

Lavelle said he was disturbed state education officials did not advise Laurel officials to turn to police for help.

McCoy said that when he contacted the school district's lawyer, the legal recommendation was to contact the state education agency. There, officials suggested he contact the state auditor.

But Wagner, whose staff began planning on the Laurel audit Monday, said the district did the right thing by contacting his office.

The state auditor will be able to determine the size and scope of the problem, said Mike Jackson, associate secretary for finance and school services with the state.

Once that detailed information is available, the information can be turned over to the state Justice Department to determine if charges are in order, he said.

Neither Delaware State Police nor Laurel police were contacted, according to officials with both agencies.

"The end result is going to be the same," McCoy said.

The state audit review should take about two weeks, McCoy said.

Meanwhile, the district has hired a consultant to help with payroll until a new finance director is hired.

"We've been trying to be very transparent," McCoy said. "We're going to work closely with the auditor's office."