Audit Finds Dyer County Schools Gave Unauthorized Bonuses To Administrators

School district leader received $27k bonus from federal COVID-19 relief funds.

Image Credit: Dyer County Schools / Facebook

The Center Square [By Jon Styf] and The Tennessee Conservative Staff –

An audit from the Tennessee Comptroller’s Office found that Dyer County Schools gave more than $60,000 in ineligible bonuses to administrators out of federal COVID-19 grant funds.

The school district had received a $1,021,467 Epidemiology and Laboratory Capacity for Infectious Diseases Grant that was part of federal American Rescue Plan Act funds that passed through the Tennessee Department of Education.

The school district, meanwhile, contends that the bonuses were approved by the state Department of Education during the grant process.


The intended purpose of the COVID-19 relief grant funds was to pay for items such as nurses, laboratory work, test supplies, mass testing and other purposes. The funds could pay salaries, mileage or contracts with labs or private institutions.

But, instead of using the funds to reimburse the district for a portion of salaries spent on COVID-19 prevention work, the district used it to give bonuses, the highest of which was a $27,688 bonus to Director of Schools Cheryl Mathis.

The district’s Business and Finance Director Wendy Smith received $11,886 and the district’s Special Education Director received $8,037.

“These bonuses do not appear to be reasonable and necessary for the performance of the award, are not consistent with other grants and programs of the school system and were not properly documented,” the report said.

The school district, however, said that the bonuses were included in the grant application and approved in the process as payments for starting a COVID testing program at the schools.

It claims the payments were in its grant application and were approved. The comptroller’s office stated, however, that work done to prove the bonuses were necessary was not documented and the job titles of employees set to receive bonuses in the application did not match the employees who ultimately received the bonuses.

The audit also found that the bonus payments were not authorized by the district’s school board.

The board did approve a budget amendment seven months after the bonus payments. That amendment allowed $141,519 in bonus payments, including $62,295 for nurses and transportation and maintenance staff. Auditors, however, said that a full breakdown of those bonuses were not given.

“It should be noted the current board of education chairman advised auditors that he was unaware the director of schools received a $27,688 bonus in excess of her contract,” the report said. “As a result, the director of schools authorized a bonus payment to herself without the full board’s voted approval.”

The auditor also noted that Mathis’ contract does not call for bonus payments.

The Dyer County School System released a statement to the State Gazette on Monday, claiming that Tennessee Department of Education directors told them that funds could be used to pay stipends to “individuals such as coordinated school health coordinators, district level administrators, etc. who manage the grant and who have been handling COVID response for their districts…” The system also alleges that Tennessee Department of Health officials told them time sheets were not necessary for individuals to receive those bonuses.

While the school system does acknowledge that the current chairman of the board, Dr. Jeremy Gatlin, was not aware of the money received by Director Cheryl Mathis, they stated that the chairman of the board at the time of those bonus payments was part of the process. They said then-chairman Keith Anderson had “a telephone conversation with Mrs. Wendy Smith regarding the grant application. He gave his approval regarding the employees eligible to receive a stipend due to extra duties associated with the COVID response program, including, but not limited to, the administrative, financial staff, and the Director of Schools, the amounts of the stipend each person would receive in each group, and the percentages of salaries the stipend would equal.” 

“The contract makes no mention of bonuses, and it appears anything beyond normal business hours is already included in her contract amount,” the audit said. “Therefore, it is questionable if the director’s contract allows for the payment of a bonus.”

Both the board and the district stated in responses that each would ensure bonuses were detailed and approved by the board before payments would be made in the future.


Read the full press release from the Tennessee Comptroller’s Office below:

Dyer County Schools administrative staff received a total of $63,589 in questionable bonus payments from a federal grant intended to help the school system respond to the COVID-19 pandemic by providing comprehensive screening testing.

These questionable payments are noted in Dyer County’s fiscal year 2022 audit performed by the Tennessee Comptroller’s Office.

The bonuses were paid to seven administrative staff members, including the director of schools, on July 26, 2021. Auditors were not provided with adequate documentation to support that these individuals performed any work related to the federal award. This documentation is required by federal rules and regulations.

Auditors also reported that these bonuses were not specifically approved by the board of education. The board of education did approve a budget amendment on February 1, 2022 – seven months after the bonus payments were made – allowing bonuses totaling $141,519, which included $62,295 for nurses and transportation and maintenance staff; however, the board of education was not given a breakdown of who received a bonus and the individual amounts.

It should be noted the current board of education chairman advised auditors that he was unaware the director of schools received a $27,688 bonus in excess of her contract. As a result, the director of schools authorized a bonus payment to herself without the full board’s voted approval.

The annual audit also includes a finding related to the Dyer County Sheriff’s Office. The Sheriff should ensure that financial responsibilities are adequately separated among individuals to reduce the risk of unauthorized transactions.

To view the full Dyer County Financial Report, click HERE.

About the Primary Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.

3 thoughts on “Audit Finds Dyer County Schools Gave Unauthorized Bonuses To Administrators

  • January 4, 2023 at 4:40 pm

    Have all involved pay the Bonuses back or be fired.

  • January 4, 2023 at 5:35 pm

    Who’s going to prison. It’s blatant fraud with the taxpayers footing the bill as usual.

  • January 4, 2023 at 7:17 pm

    Restitution needs to be made by all parties involved. Then all involved need to be fired period. Thats why America is in the sad state of affairs. All these grants under the guise of covid relief have just caused massive amounts of fraud through out America. And the American taxpayers are footing the bill and so will future generations. No state, organizations or individuals should ever take any grant money from the federal government because when they do, the government owns you. They will dictate what you must do or else. When the government says, we are here to help. Slam the door shut and run for your life. It never works out.
    In God we trust not government or man.
    Have a blessed day.


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