An Indiana State Board of Accounts investigation found that former Center Grove superintendent Rich Arkanoff misused at least $13,160 of public funds.
But district officials say that number is significantly higher, totaling more than $71,000 in time off, family meals, greens fees and pursuing private business ventures. Center Grove is pursuing repayment of $21,782 directly from Arkanoff while the SBOA is seeking to recover $2,136, according to a report filed Tuesday but publicly announced Friday.
Arkanoff was superintendent of Center Grove Community Schools for 12 years before he retired in January 2024 amid a state investigation into inconsistencies with his time off and reimbursement tracking. He now works as a superintendent at a school district in Arizona.
In an initial meeting with SBOA on Jan. 4, 2024, Center Grove provided 69 pages of documentation detailing allegations of Arkanoff’s misuse of funds for personal gain, according to a letter the district sent to the SBOA, which oversees all local government finance. The district’s business office discovered inconsistencies with his time off and reimbursement tracking and reported them to SBOA at the end of 2023. Since then, SBOA has been investigating the misuse of funds.
The report specifically covers a period from Jan. 1, 2020 to Jan. 5, 2024. The SBOA acknowledges it was not designed to identify all instances of noncompliance in the report.
In a letter sent to the SBOA on March 28 of this year, school board president Rob Daniels spoke of two incidents of potential misuse of government resources. One involved a time when Arkanoff was hired to present at a construction conference in French Lick, an engagement that had no connection to the school district, yet was conducted during contracted hours, the letter said.
Arkanoff did not take personal or vacation time for the activity and was compensated by outside entity for the presentation, while also receiving his salary from the Center Grove. Additionally, his room, board and greens fees for golf were covered while receiving his salary, according to the letter.
“This is just one of multiple instances where Arkanoff engaged in private activities while being paid by the school corporation,” the letter said.
Additionally, Arkanoff authored a book and launched a private consulting business while employed without Center Grove’s consent. Arkanoff was obligated by contract to obtain prior approval from the board but failed to do so, Daniels wrote in the letter.
Center Grove officials also allege Arkanoff engaged in private consulting work and book marketing during times while being paid by the district. He also used the school’s credit card to purchase copies of his book to give away as gifts, according to the letter.
School officials performed an internal audit of his leave time usage from Nov. 4, 2022 to Dec 28, 2023, documenting a total of 28 days that were marked as leave time used in Arkanoff’s work calendar but were not recorded in the payroll system corresponding with the same pay period. Officials noticed the occurrences were at the beginning and/or end of district-related business trips taken by Arkanoff, the report shows.
On Dec. 28, 2023, the district received a letter from Arkanoff stating he would be retiring effective Jan. 5, 2024. However, Arkanoff did not work the final five business days after submitting the letter, the report said.
Those five days, plus the 28 days the district noted, were calculated to be $36,206.95 of time off misuses, Center Grove officials alleged. But the SBOA does not consider this a loss because the school district was able to enter Arkanoff’s time off into the system before making a final payout of leave time to him.
The SBOA did find, however, that there were 11 days of misused leave time totaling $11,969.60, along with $1,190.78 — a total of $13,160.38. Arkanoff paid back $11,024.67 via a check, and the SBOA is seeking an additional $2,135.71 from Arkanoff.
However, Center Grove believes there is an additional $21,781.95 still owed by Arkanoff to the district, based on the numbers from the SBOA. This includes an additional $16,312.35 of leave time not properly reported or improperly earned, $3,663.08 in credit card charges, $542.79 in mileage and $1,262.83 in “additional personal expenses” not included in the SBOA report, district officials wrote in their response to SBOA’s findings. They are seeking to acquire the funds from Arkanoff directly.
Daniels, along with Superintendent Dr. Bill Long, said in a joint statement Friday that the actions were “a deliberate breach of trust by an individual in a position of authority and were not reflective of system failures.”
“This type of conduct will not be tolerated from anyone in our organization, especially those in leadership positions,” Daniels said in a statement.
Long was “deeply disappointed” by the incident, but wants to reassure people that Center Grove has “strong internal controls and clear policies — systems that were unfortunately and deliberately circumvented by our former superintendent,” he said in the statement.
“This was not a breakdown of oversight, but a calculated effort to sidestep the strong controls we have in place,” Long said. “My commitment to this district is unwavering. We will continue to uphold the highest standards of fiscal responsibility while remaining focused on providing outstanding educational opportunities for our students.”
In response, the school board has adopted policies to directly address the issues raised by the misconduct, Daniels wrote in the district’s SBOA report response. The board adopted additional travel payment and reimbursement policies as well as use of credit cards, outside activities of staff and conflict of interest policies.
Jay Hoffman, Arkanoff’s attorney, told the Daily Journal Arkanoff is happy to be responsible for what he owes, but disagrees with the additional $21,000 total reported by Center Grove. Arkanoff and Hoffman reviewed the claims and came up with a number closer to $11,024.67, which was what was paid to Center Grove last year.
“When the irregularities were discovered, Rich went back through giving all credit and every 50/50 ball to Center Grove, wrote a check for $11,000-plus” Hoffman said. “We met with the State Board of Accounts, the State Board of Accounts number was about $2,000 more and we’ve reached out and made an offer to pay that. In turn, we received a demand for the $21,000 plus, to which we responded ‘show us your work’ and if it all checks out, Rich is more than happy to be responsible for what he ought to be responsible.”
Hoffman did take issue with Center Grove’s joint statement issued Friday. He said it was “bit disappointing” for Center Grove to “go out of its way to really bash someone who worked there for 12 years during a very tumultuous period of incredible and fantastic growth.”
“So, were there irregularities along the way over a period of time? Yes. There’s a huge difference between nonfeasance and malfeasance. There’s a huge difference between misfeasance and malfeasance, there’s no malfeasance involved in any of this,” Hoffman said.
Center Grove may refer the matter to the Indiana Attorney General’s Office and the Johnson County Prosecutor for potential legal action against Arkanoff, according to the joint statement. The Johnson County Prosecutor’s Office has received the SBOA report and is reviewing it, Prosecutor Lance Hamner said.
All reports pertaining to the Center Grove case can be found at in.gov/sboa/.