Davis School District officials told Paul C. Smith they were just following financial audit standard procedures by placing the Layton High School principal on paid administrative leave, Smith says.

"I haven't done anything wrong," Smith told the Deseret News on Wednesday.

Still, Smith's status has added to Layton High's rumor mill.

The school is a hotbed of gossip. First, the choir director had an affair with a student. Now two desks are sitting empty since the principal is on leave as of Monday, and the head secretary retired Monday. And district investigators are sifting through the school's financial records.

"It's a shock to everybody to hear about this. They should say why," said parent Diane McBride, who has a daughter at Layton High.

Assistant principal Muriel Mann, during a meeting Wednesday morning, told Layton High's Community Council the school's finances are being audited, according to Community Council member Steve Handy.

"It's a bad turn of events," Handy said. "It's the imperfect storm that has hit our high school."

Davis School District spokesman Chris Williams said an investigation involving Smith began Monday, when he was put on leave.

Williams confirmed Leslie "Cookie" Barker retired Monday but wouldn't say whether her retiring that day had anything to do with the school's finances, whether it was connected to the principal being placed on leave or whether her retirement had already been planned.

Williams wouldn't confirm whether a financial audit is part of the district's investigation or when the investigation will end, saying releasing details to the public "wouldn't help the investigation or be fair to employees."

Layton police told the Deseret News Wednesday there is no criminal investigation at this time regarding Layton High's finances.

Smith referred specifics on his paid administrative leave to the district but added "it's not disciplinary." The principal said he doesn't know how long he will be on leave but said he isn't happy about it and misses being at the school.

Smith, who has led Layton High for 34 years and once was named the state's principal of the year, worries the allegations will lead people to think less of him.

"I think this has tarnished me greatly. When you're in a public position of trust, you want to be thought of as good," he said. "It's very painful. But I can't stop the rumors."

Barker did not return phone messages left by the Deseret News Wednesday.