CLOVERDALE, Ore. (AP) - A Tillamook County school district that hired a superintendent and told her the treasury was flush has found itself nearly $1.5 million in the hole.

Now the sheriff's department is investigating, auditors are calling the books a mess, teachers are losing their jobs and students have been reduced to four-day weeks.

The deficit represents about a third of this year's budget for the three-school Nestucca Valley School District, where Connie Kennedy went to work as superintendent in July.

"Our books had not been balanced since the '05-06 audit, so we didn't know how much money we had," Kennedy said. "The budget was built on numbers that were incorrect. It was quite a shock."

She has reduced the staff by nine positions, including two full-time high school employees and a part-time elementary teacher, and cut six days from the school calendar. In January, the district will move to a four-day week, with students working longer hours to meet state requirements.

On Tuesday, Kennedy met with bankers to sign the second of two loans so teachers could be paid.

"I signed a note for $850,000," she said. "I put my name on the line. The school district has never borrowed money to make payroll before."

The Tillamook County Sheriff's Office has started an investigation to determine whether any crimes occurred.

On Monday, auditors gave the school board a report noting "material weaknesses," including the relationship between accounting employees, the business manager and her daughter, who was in charge of accounts payables. The two, along with the woman who managed accounts receivables, were among the nine Kennedy let go.

The Northwest Regional Education Service District has since taken over the school district's bookkeeping and will oversee it through the school year.
     
(Copyright 2008 by The Associated Press.  All Rights Reserved.)