There will be no criminal case against former Oakville School District officials after questions were raised about improper spending of school district funds. The questions were directed at a former superintendent and former human resources manager. Neither works for the district now.

The current school district superintendent disagrees with the prosecutor’s decision not to pursue it, but the prosecutor says district policies at the time weren’t clear.

The former superintendent insists she did nothing wrong.

Grays Harbor County Prosecutor Katherine Svoboda said she does not believe she could get a conviction against the former superintendent and former human resources director. In a letter to law enforcement officials and copied to the district, Svoboda wrote “any cases against the two should be pursued as a civil matter.”

The investigation began in August 2017 when the school district noticed irregularities in its accounting shortly after a new superintendent and payroll and human resources manager were hired.

A state Auditor’s Office investigation “determined a payroll misappropriation totaling $11,397 occurred at the District between May 31, 2016 and July 11, 2017. There were also questionable payroll and credit card disbursements totaling $155,846 between July 2009 and July 2017.”

In her letter declining prosecution, Svoboda said the “suspects” cooperated with investigators, answered questions and believed they had done nothing wrong.

“There was no effort to conceal the alleged misappropriation,” Svoboda wrote. “The open nature of the conduct was also demonstrated when (the former HR manager) with the approval of (former superintendent Kathy Lorton) included other employees in the misappropriation. … If she believed that she was committing a crime she certainly would not involve a third party to no benefit to herself.”

Neither former school official was charged with a crime. Grays Harbor News Group tried to reach out to both officials but were only able to reach Lorton.

The county asked a staff attorney for the Washington Association of Prosecuting Attorneys to review the case. The attorney came to the same conclusion, that the suspects’ actions “would not meet the criminal elements required for conviction.”

Current Superintendent Rich Staley said he and the school district board were “extremely disappointed” in the announcement.

“The District believes the former employees’ efforts to cover-up their misappropriations are being rewarded with the decision not to prosecute,” he wrote in a response from the district to the announcement. “These former employees were responsible for advising and recommending policies, practices and expenditures to the Board of Directors that were both legal and normal. They failed to do so because they would not have been able to hide their illegal payments to themselves.”

Staley hopes further investigation could lead to a different resolution.

“Material not used in the State Auditor’s review and evidence discovered since the audit have been offered to Ms. Svoboda and her investigator, but have not been reviewed. The District understands that this is a complex case, outside the norm and possibly the resources of Ms. Svoboda’s office,” he wrote. “We have learned that the Criminal Division of the State Attorney General’s Office may be an additional resource in cases like this where the record is complex. We encourage Ms. Svoboda to consult with the Attorney General’s Office or any other resources she has before closing the door to criminal prosecution in this matter.”

Svoboda pointed out that hers was not the first investigation that faulted policies in the district.

“In the two years prior to the discovery of the disputed transactions, the State Auditor’s office found that the district’s policies and procedures were not well established or formalized,” she wrote in an email. “There was a recommendation that the district hire an outside party to do independent oversight. This was not done. The district’s lack of appropriate policies, and enforcement of policies, make it impossible to prove criminal conduct in this case.”

Staley says that polices and procedures have been updated by the new leadership.

Lorton, the former superintendent, contends she did nothing wrong.

“They’ve never brought me in, asked me questions. … That’s hard, because, when you are told you’ve done something but you have no voice, you feel like you’re guilty,” she said.

“I never would, I never have — ever — stolen against the school district that I’ve loved, cherished and devoted eight years to.”

She pointed out that during her tenure at the top of the district, she had a series of business managers, and that could have added to confusion about record keeping.

It is unclear if the Oakville School District will pursue a civil case to try to recoup the loss.