Cash payments, unexplained salary increases and a six-fold increase in legal costs are among the findings from an audit ordered by the Ministry of Education into the finances of the York Region District School Board over the past five years.

Education Minister Mitzie Hunter ordered the financial audit of the board in April, in the days following a damning report detailing the board’s failings when handling complaints of racism, trustee misdeeds and how it fostered a culture of fear among staff.

The audit looked at “costs associated with senior administration compensation, and legal costs including staff settlements.” It found that of the 46 employees audited, more than half were deemed to be “non-compliant” with the Broader Public Sector Accountability Act — costing taxpayers around $307,000.

“During the audit, it was noted that certain positions were created due to reorganization,” says the report. “The employees who were promoted into these positions received a salary increase and respective increase in vacation payout.

“YRDSB did not have sufficient documentation other than organizational charts to support the creation of the new positions. Without job descriptions and documentation explaining the rationale for the reorganization, it makes it difficult to assess whether there was an increase in responsibilities to merit salary increases” allowed under the act, wrote the auditors from the Ministry of Education’s financial analysis and accountability branch and the Treasury Board’s internal audit division.

Out of the 24 employees found to be in breach, 18 are still employed at the York board, which is the third-largest in the province.

The audit, which covered a five-year span from January 2012 to March of this year, found that the employees were “non-compliant” in a number of ways, including: receiving cash payments, increases to car allowance, salary raises even though they moved into jobs on the same pay grid, as well as the resulting enhanced vacation payouts.

The board also had a lack of documentation including records missing from employee files, a lack of job descriptions for new positions, and a lack of contracts showing hiring or start and end dates, and no real rationale for supposed reorganizations, the probe found.

The auditors suggested the board work to improve its record keeping, contracts, and creating and maintaining job descriptions for each position.

But more telling was the ballooning cost of legal fees and settlements, under the leadership of the former director J. Philip Parappally — when many senior staff left the organization, or were forced out, or complained about a culture of fear he has been accused of cultivating.

During that time, legal fees and settlements jumped from less than $100,000 in 2011-2012 to more than $600,000 from September 2016 to April 2017.

The board, which obtains legal advice from external law firms, saw a significant increase in legal costs between 2015 and 2017.

“Management identified the major legal cases and related settlements that contributed to the escalating costs,” the audit says. “According to management, higher legal costs were primarily a result of various issues related to human resource management, some of which included human rights cases and respectful workplace matters.”

York parent Todd Silverman, who has previously taken the board to task for trustees’ abuse of international travel, said the legal costs are staggering, and the board could be better served by in-house counsel.

“I am shocked at the amount spent on legal fees by the school board,” said Silverman. “Clearly there needs to be a better grasp of legal issues and how to deal with them. I am astounded how this board can spend money designated for education in such an unchecked manner.”

The audit also noted legal costs were not identified as such in annual financial statements, and rather were lumped in with “administration expenses.”

The auditors suggested the board refine legal costs, professional fees and the way financial settlements are recorded and classified.

Education Minister Hunter has given the York board until the end of the year to come up with a way to rectify the salary anomalies found by provincial auditors.

“The ministry audit found areas of non-compliance and (Hunter) is directing the school board to develop a plan, to her satisfaction, identifying corrective measures to address this non-compliance,” said ministry spokesperson Heather Irwin. The board has until Dec. 31 to do so.

The ministry wants salaries to be “adjusted to reflect the compensation restraint provisions as set out” in the rules governing public sector compensation, Irwin said.

This would not mean pay would be clawed back, but that the employees would not receive raises going forward.

Board Chair Loralea Carruthers says York Region District School Board has already implemented a number of the recommendations from the audit.

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“We are in receipt of the audit results from the ministry, some of which refer to items that occurred years ago,” said Carruthers. “We will carefully review the results of the audit and ensure the board is in full compliance with all recommendations.”

In August, the school board outlined plans to address various improvements as a result of this review. The plans include new protocols for tracking legal costs.

It has also set up a Human Rights Office to help the board effectively deal with human rights complaints in house.