Federal Court rules that Muskogee Schools doesn't have to repay money

<br>MUSKOGEE, Okla. (AP) _ An appeals court has ruled that Muskogee Public Schools won't have to repay $3.5 million to the Oklahoma Department of Education, officials said Thursday. <br><br>The district

Friday, September 13th 2002, 12:00 am

By: News On 6

MUSKOGEE, Okla. (AP) _ An appeals court has ruled that Muskogee Public Schools won't have to repay $3.5 million to the Oklahoma Department of Education, officials said Thursday.

The district received the money after a computer glitch caused it to report an attendance figure for the 1995-1996 school year that was too high.

School attorney D.D. Hayes said the Oklahoma Court of Appeals ruling he received Thursday indicated no repayment is due.

``For a disbursement to be illegal and recoverable, it must have been made with knowledge that it was contrary to law. Conversely, a disbursement made by an unknowing, innocent mistake, and without willful wrongdoing on the part of the Director of Finance is not illegal or recoverable,'' the opinion by Chief Judge John F. Reif stated in his opinion.

Superintendent Eldon Gleichman was pleased with the ruling.

``I'm very happy I don't have to come up with $3.5 million that was gone before I got here,'' Gleichman told the Muskogee Daily Phoenix.

State School Superintendent Sandy Garrett could not be immediately reached for comment.

An audit of the 1995-1996 school year uncovered the reporting error and subsequent overpayment.

The Education Department argued that state law authorizes and requires it to recover past overpaid funding when audits disclose state money has been illegally apportioned.

The law requires the money to be recovered by withholding subsequent allocations of state funds to the school district in question.

Muskogee school officials argued that what they did was in error but not illegal.

Muskogee County District Court Judge Mike Norman earlier ruled in the district's favor and the state appealed.

Another issue in the case was whether Muskogee County District Court was the proper venue for resolving the dispute. The appeals court ruled that it is.

Hayes said the state could try to get the Oklahoma Supreme Court to reverse the appeals court decision.

Charlie Price, a spokesman for the Oklahoma Attorney General's Office, said he doesn't know if the prosecutor in charge of the case for the state has decided whether to appeal.