An audit of the Achievement School District (ASD) revealed that the district misspent tax payer dollars on "unreasonable expenses," and even alcohol.
One lawmaker called the findings of the audit, which was released Wednesday, "alarming."
The money spent was supposed to be helping kids at the lowest performing schools in Tennessee. The ASD was created to raise test scores in the bottom five percent of schools in the state.
This was the first performance audit of the Achievement School District by the state since the ASD's creation six years ago, and it focused solely on how state money has been spent or, as the audit found, misspent.
"They should never ever purchase alcohol with taxpayers' funds," Jason Mumpower of the state Comptroller's Office told a joint House Education Committee Wednesday afternoon, after sharing that state auditors found ASD managers bought alcohol at least three times.
During a holiday party where the outgoing ASD superintendent and other ASD leaders were recognized, $2,500 was spent on alcohol and a bartender.
The audit stated that on another occasion ASD managers spent another $1,000 on alcohol "in recognition of ASD school leaders and support staff." That money was supposed to be strictly used for school operating expenses.
"Should they have known better?" NewsChannel5 Investigates asked Representative Harold Love.
"They should," he replied.
Yet, the alcohol sales weren't the only thing that concerned the Democrat from Nashville.
State auditors also found ASD spent nearly $700 to hire someone to drive the ASD deputy superintendent to Memphis for a day of meetings. Auditors called that an "unreasonable expense."
More than $131,000 in spending that had no supporting documentation and more than $80,000 that did not have management approval before it was paid were also found.
"The things that we found in this audit do raise some eyebrows," John Dunn, spokesman for the Comptroller's Office, told NewsChannel5 Investigates.
He also pointed out that the audit was based on just a small sample of purchases.
"So we looked at a few dozen transactions and found problems with a significant amount of them. So when we see problems like that, we know that they could be much deeper and that should be a concern," Dunn explained.
This was not the first time ASD's spending has been called into question. It also came up in the last few annual audits looking at how federal money is spent in Tennessee.
At Wednesday's committee hearing, state lawmakers had a lot to say about ASD's past problems and with this new audit, its latest.
Representative Love said the reaction from lawmakers to this latest audit was "Concern, alarm, anger on some level."
ASD was no longer handling its own financial operations. When the problems came to light earlier this year, the state Department of Education decided it was time to take over that role.
Even though lawmakers were disappointed, parents of ASD students said the district has made a difference in their community.
"They're bringing up the bad things that happened on a few occasions, but they don't get the big picture," said parent Eligah Sledge. "I know before ASD came to our community, our schools were horrible. Our schools have been failing for years, and no one said to put a moratorium on those schools, and once ASD came into the picture our communities started growing. Our graduation rates are going up. Our test results are going up."
All but two of the districts 33 schools are located in the Memphis area. Several parents from Memphis traveled to Wednesday's meeting in Nashville.