The couple were charged last week with defrauding the Davis School District of nearly $4.3 million in Title I funds. The pair retired from their district jobs in January and February of 2005.

In December 2005, U.S. Department of Education officials visited Utah to review state oversight of Title I programs. Their 55-page report, which state officials received in February, said the USOE didn't keep close enough tabs on how districts spent money the federal government provides to schools with large numbers of low-income children who often need tutoring and other help to succeed in school.

"The USOE did not ensure that [districts] established and implemented adequate controls regarding the procurement of goods and services and the disbursement of Title I funds," the review said. "The [districts] issued purchase orders at the end of the purchase process."

The shortcoming was minor compared with other challenges facing state education officials who were working to address new assessment and accountability requirements under the federal No Child Left Behind Act education reform law, said Karl Wilson, the state's Title I programs director.

"For us, that was one of the smaller pieces that was addressed almost immediately," Wilson said. "We feel that we're on line to meet all of the findings [of the audit] in terms of how to have a system that is proactive and adequate."

State officials rectified the problem by retraining district superintendents and business managers about purchasing rules, he said. But the fixes came too late to prevent the alleged fraud in Davis County.

Indictments of both the Rosses and Susan Ross' secretary outline two separate alleged scams that robbed the Davis district of roughly $4.6 million.

A grand jury said Susan Ross, the district's director of federal programs, sold photocopied reading materials to Title I schools at vastly inflated prices and funneled most of the proceeds to a company she owned with John Ross, her husband. That company had collected nearly $4 million since 2000, but the alleged scheme could date back to 1985, the indictment said.

Before joining the district in March 2000, John Ross had been the Title I specialist at the Utah State Office of Education. A federal review in 1999 found few problems with the state's oversight.

The Rosses pled not guilty to the charges Monday.

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* NICOLE STRICKER can be contacted at nstricker@sltrib.com or 801-257-8999.