La GRANDE - A recent extensive audit of the Union-Baker Educational Service District uncovered apparent fraud that could result in criminal charges, officials said.

Serious problems were revealed in five areas: Public contracting; payouts for extra days, vacation and overtime; violations of the Family Medical Leave Act; travel reimbursement and credit card charges; and unjustified payments credited to five school districts.

The audit was prepared by the Pendleton firm of Dickey & Tremper. It was shared with the ESD board. Union County District Attorney Martin Birnbaum also ordered that the audit be released to the public.

Pat Montgomery of the Oregon State Police also was given a copy.

Mention of poor record keeping, absent documentation and violations of district policy were a constant refrain.

Regarding Average Daily Membership (ADM) reporting, the audit cited "significant fraudulent reporting to both the state of Oregon and individual school districts." The discrepancies for the five districts came to $425,000 between January 2002 and February 2003, the audit reported.

Consequently, the ESD board decided to "place administrative staff responsible for program oversight and/or inappropriate activities on leave so that a thorough and unfettered investigation can take place." The board voted down a motion to put ESD Superintendent Ed Schumacher on leave.

A special meeting has been scheduled at 6 p.m. Wednesday at the ESD office in Island City, including an executive session.

The ESD board also announced in a press release that it will seek to hire a chief financial officer to oversee all business activities.

Questions about the district's practices were raised last year and forwarded to District Attorney Birnbaum, who passed the case to the OSP for investigation.

Vickie Valenzuela, an ESD board member from Baker City, said she complained about several district practices that were highlighted by the audit.

"The Union-Baker ESD policies have been violated, Oregon state law has been broken and our trust abused," she said. "I'm very pleased with Dickey & Tremper's job, they bent over backwards to be fair. We've not been willing to act as a public agency."

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