BY CHRIS ANDERSON

After nearly two years of discussions and false starts, the Pike County School District’s central office seemed set to come under the microscope of a full forensic financial audit.

However, an alleged illegal discussion, to which one board member admitted during an open meeting, may signal the end of the probe before it even gets started.

At the October meeting of the Pike County Board of Education, the board approved a proposal by an accounting firm in Florida for a full forensic audit of the Pike County School District’s central office in Pikeville. The vote was unanimous and followed a motion by board Member Kenneth C.B. Biliter and a second by fellow board Member Justin Maynard.

The action, however, may not stand amid allegations that the forensic audit and the proposal which was ultimately approved may have been discussed during a closed session which was held during the meeting. The situation will be revisited on Monday during a special board meeting.

Superintendent David Lester said the board should rescind the action taken during the October meeting and discuss the audit and proposals for the audit in front of the public.

“We need to revisit that and make sure that what we do is done in an appropriate way,” he said.

There were clues during the meeting that the audit was going to be discussed illegally during the closed session.

During the board member comments section of the meeting, Biliter alluded to the fact that there were plans to discuss the audit and the audit proposals during a closed session which appeared as an agenda item for approval by the board.

Biliter said during the comments section that he not only wanted to discuss the audit, but that he wanted action taken and that the audit would be discussed in closed session.

“I want to approve that we not only (discuss the original audit-related agenda item), I don’t want just the discussion, I want action made and a vote taken on the proposals that we look at as we go to item one (retiring into executive session) under discussion with action ...” he said.

Biliter also said the board would disclose their discussion in closed session.

“It will be discussed at length in some places that Mr. Smith knows, as well, before we come back out here to disclose whatever this board has decided to do,” Biliter said.

Later, after the board returned to the opening meeting following the closed session, Biliter, stopping prior to admitting the audit was discussed in a closed session, said the board had discussed it with Board Attorney Neal Smith.

“We had a discussion in the ... just as a board and with our board attorney about this (matter) and we have talked about it and discussed to perform a forensic audit of the school board expenditures and through certain related transactions here at the central office,” Biliter said before making a motion and receiving a second from Maynard to hire Jacksonville, Florida CPA firm Balog and Tamburri to perform the audit.

Biliter said the firm could begin around the first of November.

Board member Virgil Osborne asked Biliter for a clarification about his motion to hire the firm and in answering the question, Biliter admitted the discussion about the audit was held in closed session.

“Does your statement in there include with the statements that we made in there in executive session?” Osborne asked, with Biliter replying, “Yeah.”

Lester, prior to the vote being taken, said Biliter’s motion was the first he’d heard about the Balog and Tamurri proposal. Lester was present for most of the closed session, but, at one point, exited the closed session while the rest of the board and Smith remained behind closed doors.

Biliter said there were topics discussed during the closed session that the board did not believe were appropriate to be held in the presence of Lester.

“You’re the chief of the whole central office and we felt that that way that you didn’t have to be a party to questions and things about certain things that this board had a lot of concerns about and that’s why we met as a board with our attorney and we now making this as a form of a motion and a second and I ask for a role-call vote,” he said.

The hiring of Balog and Tamburri, whose quoted price for the audit was $84,300, was approved just prior to the adjournment of the meeting.

In an interview with the News-Express the day following the meeting, however, Smith said he does not believe the action taken by the board will hold up since it was taken following an illegal closed session.

“Frankly, it is not (appropriate), and that might have been an oversight on the part of a board member or two, but, no, it really wasn’t an appropriate topic for conversation,” he said.

As a result, Smith said, the action taken by the board on approving the hiring of Balog and Tamburri may be null and void.

“I would think that the AG’s office would opine that vote was nullified by the violation of the open meetings act,” Smith said. “I would be concerned that would be the case and due to that concern, I would probably, if I were the chairman or the majority of the board, put this back on the agenda at some point, whether it’s a special called meeting or a regular meeting, and start over again and discuss it publicly, not in executive session.”

A special board meeting is now set to be held Monday, with items to discuss rescinding the hiring of Balog and Tamburri, and also to set a work session to discuss setting the parameters for a forensic audit.

Lester, in an interview with the News-Express on Friday, said that it was obvious to him that the audit was discussed illegally and that action should be taken to move through the process in accordance with the law.

“Obviously, there were conversations that occurred during a closed session that should not have occurred,” he said. “It seemed obvious to me ... as they came out and got back into the regular meeting and got to the agenda item related to the audit, it was apparent from a couple of comments that were made that there were conversations either in closed session or outside the open session. I wasn’t in the closed session so I really can’t comment about that ...”

Lester, who said he was asked to leave the closed session, said any probe examining the central office based upon concerns of illegal activity should not be approved while breaking the laws regarding open meetings.

“It was obvious to me that there were conversations that occurred outside of an open meeting,” he said. “In conferring with legal council and the board chair, we thought we should have a special called meeting to revisit the item under discussion and I’m going to ask that it be rescinded and as much as the discussions weren’t appropriate. The second item will be to start this process all over again.

“If they want to do an audit, I don’t have a problem with that, but I want it done legitimately and I want it done within the confines of the open meetings regulations,” Lester said. “I don’t think we should ask an auditing firm to be examining us for legalities and legitimacies if we don’t do that legitimately.”

According to the agenda for the meeting, the board entered into closed session to discuss pending or potential litigation and personnel issues, both of which are allowed for discussion in closed session under Kentucky’s open meetings laws. Lester said both of those issues were discussed.

Smith said even if the proposed audit resulted in legal action by the board or on behalf of the board, the discussion would still not be allowed for discussion in closed session.

“If we had an audit and subsequent to the audit report we had some prosecutorial issues that might need to be addressed, that, we could talk about, because you’d be talking about personnel; you’d be talking about potential litigation; you’d be talking about things that are appropriate for discussion in executive session,” he said. “But we’re way too early in the process for that audit discussion to fall under those exemptions.”

The question of whether the illegal discussion about the audit nullifies the vote taken by the board to move forward with hiring Balog and Tamburri remains up for debate.

While Smith said he believes the discussion nullifies the vote, Jeremy Rogers, an attorney with Dinsmore and Shohl law firm in Louisville, said the vote would likely be allowed to remain valid, but could be subject to review in court.

“The short answer is that a vote or action that violates the Open Meetings Act is not automatically void, but is voidable by a circuit court in the court’s discretion based on the facts and circumstances,” Roger said in a statement to the News-Express.

The special meeting regarding the issue is scheduled for Monday at 5:30 p.m. at the school district’s central office.