$70,000 in Findings Issued in Community School's Final Audit

Tuesday, December 3, 2013

Columbus – Sloppy book keeping at the Legacy Academy for Leaders and the Arts’ (Mahoning County) continued until the very end, according to the closeout audit of the community school released today by Auditor of State Dave Yost.  Findings for recovery issued against imprisoned former Fiscal Officer Carl Shye total nearly $70,000.

“This Grinch keeps on stealing Christmas,” Auditor Yost said.  “It comes as no surprise that an audit of a fiscal operation led by Carl Shye would uncover records like these.”

The Legacy Academy for Leaders and the Arts’ Board of Directors decided to close the school on June 30, 2011 due to declining enrollment.  In 2012, Former Fiscal Officer Carl Shye was sentenced to two years in prison and ordered to pay more than $472,000 in restitution for a federal embezzlement charge related to his employment as treasurer for various community schools in Ohio.

During fiscal year 2011, the Legacy Academy for Leaders and the Arts issued 16 checks totaling $21,941.92 to various vendors that did not include proper supporting documentation to state the public purpose of the expenditures.  The checks were signed by Fiscal Officer Carl Shye and Business Manager Ed Bolling.  A finding for recovery in the amount of $21,491 was issued jointly and severally against Shye and Bolling.  An additional undocumented 50 checks totaling $47,908.34 were issued to various vendors and signed by Shye.  A finding for recovery in the amount of $47,908 was issued against Shye.

The audit found that as of July 1, 2010, the school withheld income taxes from employees but failed to remit those payments to the Internal Revenue Service, the Ohio Department of Taxation and the City of Youngstown.  It was determined that the school should have remitted federal income taxes in the amount of $102,768, FICA/Medicare taxes in the amount of $38,777, state income taxes in the amount of $148,251, and city income taxes in the amount of $86,367.  These matters were referred to the Internal Revenue Service, the Ohio Department of Taxation and the City of Youngstown.  For fiscal year 2011, auditors were unable to determine whether the proper tax amounts were withheld from employees.

The audit also cited extremely poor record keeping by school officials concerning student attendance.  The academy was unable to provide documentation to show how many students attended and the duration of their attendance, or how many hours the school was in session.   Student attendance sheets were not maintained nor did officials have paperwork concerning enrollment and withdrawal dates of students.  Due to this lack of documentation, a total of $309,704 in State Foundation payments was unsubstantiated.

During the school’s final year, accounting records also were incomplete and riddled with errors.  For example, the school did not maintain W-2 or W-4 reports for employees, and auditors could not determine whether employees were properly paid.  The school did not provide any receipt or disbursement ledgers for the audit period.  In addition, no annual financial report was filed with the Auditor of State’s office.

A full copy of this audit may be accessed online



The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,800 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

Carrie Bartunek
Press Secretary