Audit Reveals Misuse of Millions in COVID Relief Funds by West Virginia School Districts

The state department of education did not adequately oversee the use of federal pandemic relief funds by school districts, and as spending reviews continue, it is likely that more misuse of the funds will be uncovered.

An audit conducted by the state, which examined a sample of purchases made since 2020, discovered that the West Virginia Department of Education lacked the capacity to effectively monitor how local school districts used the federal funds.

Out of the 54 school districts reviewed, 37 were found to be noncompliant in their use of the funds, either through improper purchasing procedures or using the funds for activities that were not allowable.

In Upshur County, for instance, the school district spent $60,000 of the federal funds on pool passes. Other funds were used for private school expenses, food, and a student choir trip out of state.

“It seems like there’s a massive problem and we should be looking at everything — but that’s not ever going to happen,” said Del. Kayla Young, D-Kanawha.

The results of the audit were shared with state lawmakers during a Legislative interim meeting in Wheeling on Monday.

Due to issues including misspending of funds, West Virginia has already taken control of two school districts — Upshur and Logan. The audit recommended that the WVDE increase its oversight by adding staff to monitor school district spending, as the state still has over $400 million in federal funds to spend by September 2024. However, the audit noted that it is unlikely that the WVDE will increase its capacity before the spending deadline.

“The WVDE indicated that it has no intention of increasing capacity since the deadline to spend [federal] funds is 10 months away,” said Brandon Burton, research manager for Performance Evaluation Research Division.

The federal COVID-19 relief funds, intended to help schools safely reopen and address pandemic-related academic and emotional needs, have been widely misused across states since 2020. In West Virginia, the WVDE has received nearly $1.2 billion in funds from the Elementary and Secondary Emergency Relief.

Lawmakers were informed that state and federal monitors had approved the school districts’ spending plans, but the lack of a fiscal monitoring system within the WVDE failed to identify any problems with the spending.

“Consequently, there are violations that the system did not detect,” Burton stated.

‘I think the school systems were in a panic’

According to the audit, the WVDE’s failure to detect the misuse of funds and improper purchasing procedures can be attributed to various factors, including a lack of staff to monitor spending.

“It’s a large amount of information that you’re having to go through,” said Burton, who also mentioned that in some counties, only one person was responsible for reviewing financial transactions.

In addition, school districts did not always follow proper bidding procedures and made purchases from unregistered vendors, increasing the likelihood of dealing with fraudulent vendors.

“… The vast majority of [Local Education Authorities] made federal grant purchases with unregistered vendors totaling over $2.1 million,” the audit revealed.

Melanie Purkey, WVDE senior officer for federal programs, acknowledged that during the height of the pandemic, school districts were under pressure to quickly purchase supplies such as hand sanitizer, masks, and laptops for remote learning. However, these procurement practices were not in line with proper procedures.

The WVDE is currently updating its internal policies regarding emergency purchasing procedures.

Reviews of how school boards utilized pandemic relief funds are still ongoing, and the state has over $476 million remaining to be spent by the deadline. Any unspent funds will be returned to the U.S. Department of Education.

Del. Kathie Hess Crouse, R-Putnam, expressed concerns that taxpayers in counties where school boards must repay misspent funds will bear the ultimate cost.

“There’s no consequences to them when we have to pay for that,” she remarked.