Audit of Layton High alleges serious flaws

LAYTON — An audit released by Davis School District Friday reveals fishy financial procedures at Layton High School by principal Paul C. Smith and his head secretary.

Auditors don't make allegations of embezzlement or theft, although a police investigation is under way. "There is no missing money. That is the bottom line," Smith told the Deseret News Friday, adding the school is audited each year by the district.

"I am being painted as a criminal," Smith said.

The auditors do point to a serious mismanagement of money, including a fund for a Russian Club they claim doesn't exist but which at one time contained $38,611.

"The Russian Club was a slush fund, and its purpose was to hide money from the district in order that the funds could be used in any manner determined by the principal," the audit alleges.

However, Smith told the Deseret News it was just a random label of an account which was much like a rainy day fund, a "discretionary fund for special unexpected needs. It has been used for student and school benefit."

Smith said he pointed out the discretionary fund to district auditors during the school's annual audit so "it shouldn't be a surprise."

The audit released Friday also states evidence of mishandling of event ticket sales, including student athletics. Graduation ceremony ticket sales were estimated at $4,000, but the cash was never counted and was given to the head secretary and subsequently used for awards to secretaries and others, according to the audit.

The audit alleges the school didn't turn over 50 percent of its building rental revenue to the district as required, an amount totaling $26,846.

Layton police are investigating. Davis District officials are cooperating with police and giving them documents.

Smith was on paid administrative leave beginning Oct. 12 while the district continued its audit. He returned to Layton High Monday but will retire Jan. 31.

Davis District officials aren't commenting on the audit and don't plan to reveal details until after the police investigation is finalized.

When asked why the district would allow Smith to return to Layton High amid the financial allegations, Davis District spokesman Chris Williams said, "It was the superintendent's desire to place Mr. Smith back at the school. The superintendent felt having Mr. Smith there would help the school and faculty transition to a new principal."