A testy exchange Tuesday between Wake County's district attorney and Vernon Hatley ended the day's proceedings in a case where a Wilson company and more than a half-dozen people have been implicated in a scheme to defraud the school system out of more than $3 million.

"If your spending limit is $2,500, how do you purchase a $10,000 television screen?" Wake County District Attorney Colin Willoughby asked Hatley.

"I didn't know how we bought it," answered Hatley, Wake County schools' former senior director of transportation.

"How did you think it got on the wall?" Willoughby asked. "Did you think they bought [the TV] in parts and put it together?"

The proceedings Tuesday ended three days of testimony that began last week in Wake County Superior Court after Chapel Hill defense attorney Barry Nakell filed a motion last month to withdraw Hatley's guilty plea to conspiracy and obtaining property by false pretenses.

Nakell said Tuesday that his client had been the unwitting dupe of Carol Dail Finch, former budget analyst of the Wake County school system's transportation department.

His guilty plea in October was in connection with a "pre-billing" scheme that funneled large sums of school system money to Barnes Motor & Parts Co. in exchange for personal items that included three new cars, three new campers, golf carts and thousands of dollars in gift cards.

The scheme allowed the transportation department to submit bogus invoices to Barnes. The doctored paperwork gave the transportation department credit for the upcoming school year with unused funds from the previous year and, in effect, became the Wake employees' personal automated teller machine.

Hatley has admitted to accepting "gifts" with a total value of about $22,772.64. He also admitted to improperly creating a questionable document to cover purchase of a $10,000 television monitor used in Wake schools' transportation offices.

But Nakell said that his client is "legally innocent" and that he "misunderstood the consequences of a guilty plea."

During the proceedings Tuesday, Hatley told the court that when he became transportation director in 2001, he received orders to focus on operations instead of the budget and finance.

"At the time that I took over, 23 percent of the buses were late arriving at school or getting home. That's unacceptable," Hatley said. By the end of the school year only 7 percent of the buses were running late, he added.

As a consequence, Hatley said, he did not realize that the thousands of invoices he had signed in 2003 and 2004 were fake documents intended to cover the illegal purchases.

Connie Reid Capps, a former Barnes branch manager in Raleigh who has pleaded guilty to the same charges, also testified Tuesday.

Capps burst into tears on the stand when Nakell asked her about the phony invoices.

While wiping away tears, she said Hatley instructed her to write fake part numbers on the fake invoices.

"Yes, he did," she said. "Everybody at Wake County told us to when we started buying big things outside of Barnes."

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