State Auditor Comments On Mismanaged Federal Funds

Bridge the Gap had a budget of $8 million to help low-income families purchase supplies for school. Five thousand families received $1,500, but according to the audit, no restrictions were used to manage this money.

Ryan Walters oversaw this program. He and the executive branch contracted ClassWallet to distribute $8 million with little government oversight.

ClassWallet, a Florida company, allowed families to digitally spend the money.

Auditors found the state needed to take advantage of an available internal control option offered by ClassWallet. Nor did it review the initiatives expenditures.

"The person who was put in charge of administering this program did not utilize the proper controls for this program and as a result close to 20 percent of these funds were not used for educational purposes," said Cindy Byrd, State Auditor. 

Auditors found that $1.7 million was spent on non-educational items such as kitchen appliances, furniture, and entertainment.

In a statement from the governor and the state superintendent, the message remained the same, that negligent out-of-state vendors should be the ones accountable to recover the federal taxpayer dollars in question.

The state auditor disagrees.

"The executive branch is always in charge of making the transactional decision," said Byrd.

According to the audit, the state failed to inform ClassWallet it was supposed to follow federal statutes and regulations when distributing the money.

The audit also adds ClassWallet wasn't told it needed to keep certain documents, and some of those documents were destroyed.

News 9 requested an interview with Superintendent Walters, but he has not yet responded.

This 2021 audit now moves into an investigative audit to hold those responsible for mismanaging money.