Allegations of misuse of funds in Lake Shore

By: Kristyne E. Demske | St. Clair Shores Sentinel | Published April 15, 2016

 Lake Shore Public Schools created a portal for anonymous tips of ethics violations or other complaints on

Lake Shore Public Schools created a portal for anonymous tips of ethics violations or other complaints on

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ST. CLAIR SHORES — Following allegations of the misuse of money from Lake Shore Public Schools’ international fund, the district has hired a forensic auditor to take a look at the books and get to the bottom of the matter.

Although he announced his retirement in March, Lake Shore Superintendent Chris Loria’s contract runs through June 30. But Joe DiPonio, the principal at Lake Shore High School, instead was named to the superintendent’s position — and began working in that capacity — April 1.

It was three days after that, however, that an anonymous letter was delivered to the Superintendent’s Office laying out many disagreements and making an allegation of misuse of money from the district’s international fund.

“There were a number of things that were listed in this anonymous letter,” DiPonio said in an interview April 12. “The big glaring thing was, they did put at one (point) ... something to the effect that theft had occurred. How do you ignore that?”

DiPonio said the letter did not specify any amount or location of the theft — it just suggested that the district investigate the foreign exchange program. But despite the fact that many points in the letter were general, nonspecific complaints, he said the district didn’t feel it could ignore the allegations.

“If someone says that people are stealing money, then we can’t ignore that. Regardless of the contents of the rest of the letter, we can’t ignore the fact that that was suggested,” he said. 

The Board of Education and its attorney collectively decided to move forward with a forensic audit “out of an abundance of caution,” DiPonio said. “We’re taking a look at the activities surrounding the international fund.”

The fund is comprised of private tuition money paid by students from China attending Lake Shore High School for a year, and the money is used for a variety of purposes. One item paid for out of the fund, DiPonio said, was a trip for a group of Lake Shore educators and administrators, including Loria, to Italy to explore a foreign exchange program with a school there. 

The district decided to hire an outside third party to conduct the audit. Chris Peterson, of UHY Advisors, was at a special Board of Education meeting April 11 outlining the scope and parameters of his audit to a room overflowing with community members and staff.

“He’s going to take a look at the activities that have taken place through funds with that account,” DiPonio said of Peterson.

The audit will make sure that anyone accused of impropriety or alleged misuse of funds is afforded due process, DiPonio said. 

“The tragedy of situations like this is it’s pretty easy to make allegations and, certainly, we don’t want to blow anything off or sweep anything under the rug. We do have a duty to investigate and make sure that what’s being said is either established as fact or fiction,” he said. “It’s just too easy to make accusations, but we certainly owe it to the community to make sure that we investigate.”

Peterson said he will be taking a look at books and records, expense reports, and invoices, and will be interviewing staff and others involved to get to the bottom of the matter.

“If you are a forensic expert, you need to have the ability to be fair, impartial and objective, and let the body of your work speak to the underlying circumstances,” he said. 

He said he did not know yet what a time frame for the investigation would be, but he expected it to take at least several weeks.

DiPonio announced at the meeting that the district has created an anonymous reporting feature on its website for staff members to alert the district to concerns and ethics violations. 

“This is not a witch hunt, and we will not supercede the constitutional right of due process for anybody involved,” he said. “I do want to make sure that our staff, our community, has a mechanism to share whatever concerns you have.”

The feature is at www.lake, under the staff drop-down tab, and is labeled Safe Workplace Reporting. DiPonio said that anyone is also welcome to send questions or concerns to his email,

Peterson said that is an excellent tool for the district.

“It gives the school district the ability to vet (the tips) so that serious accusations and concerns can be separated from some that are frivolous,” he said. 

Deborah Scheetz, of St. Clair Shores, said she was disappointed to hear of the allegations, having lived through a similar investigation when her children were in East Detroit Public Schools.

“I was in tears the other day when I heard this. I’m so angry and I’m so hurt,” said the mother of three, two of whom have already graduated from Lake Shore. “Services were taken, teachers left because they just couldn’t make it because we couldn’t find the money for them. Every year something got taken away.”

Board of Education President Shannon Ketelhut said that they have the “utmost confidence” in the team assembled to bring the allegations to a resolution.

“Mr. Peterson stated that his path was to be fair, impartial and objective. We need to really reflect on that being his job. That’s why he’s here,” she said. “It’s really important that we remember that this is a path that is the path we need to take.”

DiPonio said there is a lot of work for Peterson to do.

“Mr. Loria has been very open and honest with everything. His trip to Italy was in preparation for an exchange program with a school over there, and for our students to be able to go over and have that experience,” DiPonio said. “We’ve had families that have kids over there right now that have said, ‘I’m glad that he did that.’

“That is why we’ve hired him (Peterson), because there’s so much information to work through and determine whether it’s fact, fiction, right, wrong.”

Emily Tims, president of the Lake Shore Federation of Teachers and the art teacher at Rodgers Elementary, said that they believe the district is moving in a positive direction.

“The Lake Shore Federation of Teachers are always going to support their students and the district, and we are going to support educational excellence,” she said. “If we can provide a safe environment for our employees to make Lake Shore a better place, then that’s a great thing.”

Loria did not return calls for comment by press time.

Board members said it’s important for the community to realize that the district will get through this difficulty.

“We do have a great community and I think we can survive this, come out better and build on it,” said Board Secretary Kurt Ziegler. “Whatever we find, we can make things right, make things better and move forward.”