Boosting from the boosters

When Shannon Hostettler joined the Pleasant Valley High School Sports Boosters organization, one member of the group warned the club’s board that she wasn’t to be trusted with money.

He said she had earlier confessed to pocketing money while serving as a boosters club treasurer at Marsh Junior High School, and in another incident a co-worker had implicated her, though without legal consequences, in an embezzlement scheme when she worked as a computer technician at Chico Junior High School.

Nevertheless, the boosters made her their treasurer, responsible for handling the money raised to benefit the PVHS athletic program. Her February arrest on a felony grand theft charge of embezzling nearly $70,000 from the group raises serious questions—once again—about the way fundraised money is handled by the Chico Unified School District and groups affiliated with it.

As far as current boosters club leaders are concerned, it wasn’t their fault. “People told us [about Hostettler’s reputation] after the fact, but no one said anything [when she became treasurer],” board President Shelle Hord said. At least, it was “never said to me,” she continued, noting that she did not hold her current office until after Hostettler became treasurer.

The school district also denies responsibility. District officials insist that a booster club is a completely separate entity, run by parent volunteers with its own board of directors, bylaws and tax identification status.

That seems straightforward, but in fact the district and boosters are or have been entangled in a number of ways. The group’s Web page is part of the PVHS Web site; the group uses the school’s name, sells football programs and organizes special events at PVHS facilities.

Additionally, until 2006, the group’s bylaws called for the school’s athletic director to serve on its board of directors, an official relationship that complicates matters. Randy Gilzean, who has been the Pleasant Valley athletic director for 15 years, said he wasn’t aware of the provision in the bylaws and attended the group’s meetings “just as a liaison” between the organization and the school.

His official status on the board was terminated after the Butte County Grand Jury’s final reports in 2004-05 and 2005-06 criticized the district’s management of Associated Student Body funds, among other examples of financial mismanagement. Gilzean still serves as a liaison between the group and the school.

The boosters organization has been in existence since 1989, Gilzean said, independent of the district. But if the school and district aren’t in charge, who is?

The boosters’ board of directors, supposedly—a group of parent volunteers who actively work to enhance the athletic program at PVHS.

Shortly after Hostettler was arrested, the list of directors posted on the group’s PVHS Web page was taken down, and efforts to obtain contact numbers proved fruitless. Once board members were finally tracked down, none would offer much comment on the situation, saying they didn’t want to jeopardize the prosecution in court.

Members do say that they are now working with the North Valley Community Foundation and a system of checks and balances has been put in place.

Who, then, is taking responsibility for the failures that enabled someone to steal nearly $70,000 of donated money that parents and friends of student athletes had given— $5 here, $10 there—in the belief that their money was safe?

Hostettler, 42, was arrested Feb. 4 on a felony charge of grand theft after a complete audit confirmed the Pleasant Valley booster organization’s original suspicion that she was responsible for the missing funds. She is accused of embezzling $69,453.44 during a two-year period when she served as the treasurer of the boosters club.

Hostettler volunteered for the treasurer position around December 2005, when she opened a new account for the boosters at a local Wells Fargo branch, Gilzean said.

Officials of the sports boosters first reported missing funds in April 2007 after a group of boosters made a trip to the bank. The case was referred to the District Attorney’s Office with a request for a criminal complaint in July; however, the request was denied until an official audit of the boosters’ financial records was completed.

Chico Police Department Det. Greg Keeney said records showed Hostettler made unauthorized in-branch withdrawals, unauthorized ATM withdrawals, and issued unauthorized checks made payable to herself.

When word got out that money was missing, boosters say, Hostettler donated a substantial amount of money to the group, suggesting she may have been trying to pay the organization back.

Keeney would not disclose how much money Hostettler offered; he said, “Shannon has given some money to the sports boosters, but I wouldn’t call it ‘paid back.'”

Hostettler had never been charged with a crime before her arrest—not even a parking ticket, Keeney said. She was the only suspect in an investigation that had taken almost a year from the day booster board members first suspected a significantly large sum of money was missing.

“Why would she do it? That’s the question everyone is asking,” said Gilzean. “It’s baffling.”

“We are happy that we are finally progressing forward,” said Tracy Hord, a club officer who has taken over Hostettler’s duties. She didn’t want to talk about the crime: “It’s an awkward situation. We are focusing on moving forward.”

But news of the arrest has had an impact on the group’s fundraising, Gilzean said. There’s been some reluctance to contribute since the money was reported missing. The Athletic Department also has suffered, he said, from the lack of funding the boosters usually provide.

Gilzean said Hostettler was always a hard worker and someone who appeared to live “a basic lifestyle.” He said she drove an older minivan to school, and she didn’t appear to have any drug, alcohol or gambling habits.

Often, she volunteered to drive students to summer basketball tournaments, he added.

She has two sons who attended Pleasant Valley. Her eldest played basketball for the high school; Hostettler remained active in the boosters organization after he graduated, even though her other son did not participate in athletics.

Volunteering for fundraising to support student athletes is nothing new for Hostettler. Former Marsh Junior High School Principal Jeff Sloan and a parent, who asked not to be identified in this article to prevent his children from being affected, both confirm that Hostettler was involved with the Marsh Junior High School club basketball team in 2000-01, while her son attended the school and played basketball. Sloan said she was the junior-high boosters’ treasurer.

“At one point during the season, [another club board member] noticed the account had less money in it than anticipated,” Sloan said. “He confronted Hostettler, who acknowledged that she had taken some money and justified it as ‘paying herself a salary’ for all the hard work she had done.”

Both Sloan and the club official said Hostettler resigned and was replaced. The club officer said he discussed this experience with the Pleasant Valley boosters when Hostettler volunteered, saying, “I like her as a person, but she can’t be trusted with money.”

But he did say that she was a “work horse,” always willing to go the extra mile. “She was a friend until I found out she was ripping us off,” the parent said, referring to Hostettler’s role in fundraising efforts while their children competed at the junior-high level.

This parent, along with others who also preferred not to be named, also questioned how or why the boosters allowed Hostettler to handle all the money without any type of checks-and-balances system in place.

Hostettler worked at Chico Junior High as a computer technician, among other job titles, from February 1997 to May 2005. During that time, she became friends with a woman named Caryn Hightower, who was employed there and at Marsh as an accounting technician from November 2001 to August 2005, working at each school for four hours a day. Hightower’s position handled all ASB funds at both schools, which can be considerable.

In January 2005, the CUSD reported that approximately $26,000 was missing from both junior high schools. That same month, Hightower was placed on administrative leave “pending further investigation of the missing outstanding deposits from both junior high schools,” according to a letter written by Scott Jones, the director of fiscal services.

A subsequent report from the accounting firm of Dennis D. Diver & Associates dated Oct. 20, 2005, states that shortages adding up to $33,503 occurred from Jan. 1, 2004, through Dec. 31, 2004, in connection with the Marsh Junior High and Chico Junior High bank accounts.

The report suggests that, when handwriting samples are compared, the deposit slips in question appear to have been filled out by Hightower.

“I am certainly not a handwriting expert; however, in my experience as a certified public accountant and a certified fraud examiner I have had numerous occasions to review samples of handwriting, and it appears that the handwriting, especially on attachments C through F [four individual deposits in which the cash portion of the deposit received by the bank was less than that reflected on site records], is that of Caryn Hightower,” Diver reported.

The report also indicated that “Caryn Hightower has implicated Shannon Hostettler.”

Originally, Hightower was the lead suspect in the case. She eventually lost her job, not based on suspicion, but because the district decided she had stolen the money, she said. But, as the Police Department later showed, she didn’t do it.

Several people had complained that checks they had written had not been deposited. Subsequently it was determined that the checks were indeed being deposited, but not in a timely manner, perhaps to mask the disappearance of the cash.

“Someone was holding those checks and taking cash,” Keeney explained. He said school registry files showed cash and checks were being deposited in the bank, but the amount of cash was less than school site records indicated had been received.

But Hightower proved she was on vacation in Hawaii when several key deposits—the unaccounted-for checks—were made at a local Wells Fargo, Keeney said, eliminating her as a suspect.

Keeney said bank surveillance videos are recycled every 90 days, making it impossible to prove who deposited those checks. The one thing the evidence showed, he said, was that Hightower was not responsible.

Because Hightower worked at both schools, several other people would collect money when she was not available.

While none of those people who also collected money was ever charged or listed as a suspect because of a lack of evidence, Keeney noted that Hostettler was one of several people who would often collect money.

For her part, Hightower said she was suspicious that Hostettler was the person responsible. Often “there were statements made in the regular course of business” that Hostettler had essentially filled in for Hightower when she wasn’t available.

“I had a statement from a bank employee stating that Shannon routinely made deposits,” Hightower said.

Even after Hightower lost her job, she said she believed the incident would be resolved. She thinks it is unfair that she was fired, especially in light of the fact that months later the Police Department ruled her out as a suspect. “It’s not that I was terminated for suspicion—I was terminated for theft.

“Several people were dealing with the money on a continual basis; that’s how it was,” she continued. “That was a huge problem with that position.”

Besides knowing Hostettler often collected money and made deposits, Hightower said her computer would often be updated with records of deposits and money collected. She couldn’t think of anyone else who could have made the updates, unless they were familiar with the system and the passwords. Hostettler was the computer technician.

CUSD Assistant Superintendent Bob Feaster refused to comment on the shortage of ASB funds from the two junior high schools, or about the case or those who may have been involved, saying, “It’s a personnel issue. I can’t talk about it.”

Hightower still implicates Hostettler, someone who she said befriended her.

“In hindsight, it appeared we were close and did all kinds of things together… in front of other employees,” she said. “Our friendship was much more prevalent at work.”

Shannon Hostettler was reluctant to say much about her case.

“I volunteered for 25 years, and I have never been accused of [any embezzlement incidents or allegations],” she said in a phone interview. And she denied ever being the treasurer of the Marsh club basketball program, saying she only assisted in scheduling.

As for her recent arrest and the embezzlement charges, she refused to comment pending her court trial. She contended she was innocent and would prove “unethical operations” involving several Pleasant Valley boosters.

Hostettler said she was friends with Hightower, but “there was no involvement” in the missing money from Chico and Marsh junior high schools.

On March 26, she pleaded not guilty to a single charge of felony embezzlement. Her preliminary hearing is set for April 30 before Judge Robert Glusman.

Back to the question of who’s responsible for how the money is handled:

According to the California Education Code, the CUSD is responsible for the supervision of all funds raised by any student body or “student organization using the name of the school.” That applies to any Parent-Teacher-Student Association as well as Associated Student Body fundraisers, but it does not include groups like the boosters club.

The district came under fire from the county grand jury for widespread financial irregularities in the handling of ASB funds at all of its secondary schools. And the primary reason given for Sloan’s demotion from principal to teacher in 2004 was mishandling of funds, although no evidence was presented that any money was missing or had been used for his personal benefit.

In any event, parents concerned about a lack of checks and balances in the booster program’s finances are questioning whether the district should have a larger role in these organizations that provide schools with adequate facilities, equipment and personnel to offer strong athletic programs.

At Pleasant Valley, the boosters provide from $15,000 to $30,000 annually for supplies and equipment that the school does not have funding to provide, Gilzean said. Two ice machines, a marquee sign, scoreboards, awards, plaques and all athletic training supplies are just some of the enhancements brought to the school with booster money.

Gilzean said boosters do not collect money at gates for football and basketball games, but the club does sell football programs and organize special athletic events at the school.

At Chico High School, boosters do assist in manning gates and sometimes concessions, said Bob Hanson, the school’s athletic director. He said there is oversight in the booster organization, but only on an advisory level—the same as with any other booster club.

“The principal and myself do participate in their meetings, but in reality, if something goes wrong, it is not the school or the district’s responsibility,” Hanson said.

Gilzean said the only tie the boosters have to the school is their use of the school’s name. He said, “I don’t know if it’s the way it should be, but that is the way it is.”