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Stepp’s Loan Repayments Labeled “Abuse” by Auditor of State
Columbus – Blatant abuse led to taxpayers footing a $264,000 bill to pay for the former Medina City Schools superintendent’s education, according to a final report released today by Auditor of State Dave Yost.
“Superintendent Stepp’s reimbursement request is jaw-dropping -- and no reasonable board member should ever approve an expenditure without knowing the amount first,” Auditor Yost said. “Thankfully, new leadership is in place to better protect Medina’s taxpayers and students.”
Today’s final report includes a review of the $172,011 payment made by the Medina County ESC on behalf of the Medina City School District to the U.S. Department of Education for former Superintendent Randolph Stepp’s student loans.
Auditors found that the $172,011 loan balance repaid by the Medina County ESC included at least $37,080 in interest costs. It was also found that Stepp made only a few payments on his student loans, even though there were breaks in his educational pursuits. Stepp also requested forbearance on his payments on a number of occasions, citing financial hardship, even though he was working at the time.
The review also found that Stepp continually consolidated his loans. Upon taking out a loan, he would request a larger amount than was necessary and use the extra funds to pay off prior loans (including interest). While current records show he secured only three loans totaling the $172,011, it appears he received funds from over 30 loans spanning 27 years.
The Medina City School Board amended Stepp’s 2009 contract to include payment of his student loans, even though they were unaware of the exact dollar amount of the loans. Therefore, the Auditor of State’s office determined the Board’s approval was imprudent and former Superintendent Stepp misused his position for personal financial gain.
In addition, Stepp earned an MBA from Case Western Reserve University in May 2012. The $92,000 education costs for the MBA were again directly paid for by the Medina County ESC. In total, the district paid $264,000 for Stepp’s education. This amount is substantially higher than any similarly situated school district in the State of Ohio would expect to pay for one employee, and these payments are deemed to be imprudent, unreasonable, and unnecessary.
The purpose of the original agreed-upon procedures conducted at the Medina City School District was to determine whether certain disbursements made on the district’s behalf by the Medina County ESC, as well as disbursements made to the superintendent by the district, were for a proper public purpose and made during the period of July 1, 2005 through March 31, 2013. This includes whether the payments were properly approved, adequately supported, and appropriately recorded and summarized in the district’s financial statements and accounting records. The report released in September 2013 included more than $4,100 in findings for recovery issued against former Superintendent Randolph Stepp.
A full copy of this report is posted 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.