RALEIGH, N.C. — Former transportation employees for Wake County Schools have returned money and merchandise that authorities believe was purchased with public money.

Former Transportation Department head Vern Hatley wrote a check for nearly $23,000 to the school system.

Officials said other former employees have returned items, such as treadmills and big-screen TVs.

When an investigation at the Wake County school bus yard began last fall, Wake County Schools told WRAL there was no evidence that Hatley had done anything wrong.

Two months later, Hatley resigned, and now he is among former employees who have returned thousands of dollars in money and merchandise.

"We had people of trust in key positions who colluded with other folks to defraud the system," said Wake County Schools spokesman Michael Evans.

Evans confirms Hatley wrote a check for nearly $23,000, returning money after he left the system.

Other former workers, which include Pamela Stewart, Angela Malloy and Phil Lambert, have done likewise.

Most of the items were auctioned off, but a treadmill and four big screen TVs are sitting in a warehouse.

One other former worker, Carol Finch, has been caught up in the scandal, but has not returned anything, officials said.

The school system believes these former employees conspired with employees from Barnes Motor & Parts, of Wilson, to defraud the system.

They suspect the workers made tens of thousands of dollars in personal purchases and disguised them as orders for bus parts.

Records show transactions between the school system and Barnes skyrocketed from $200,000 in 2000 to $4.2 million in 2004.

In January, an anonymous source from a local store showed WRAL's Kelcey Carlson stacks of orders for electronics, billed to Barnes, but sent to the homes of two former transportation employees.

"When you have collusion between inside folks and outside folks it's difficult to detect," said Evans.

Barnes Motor & Parts fired two managers and returned $1.3 million to the school system, saying the money had been prepaid for future orders.

The school system said it detected the problem with an internal audit.

WRAL has repeatedly tried to contact Hatley, but has been unsuccessful in its attempts.

The N.C. State Bureau of Investigation and the district attorney are still working on a criminal investigation. Charges are expected.