Thursday, July 29, 2010

Where's the Audit? (Community School Part II )

 


On January 6, the School Committee voted to hire an accounting firm to audit the books of the Sandwich Community School. On April 28, the auditor met with the Committee in public session for a very brief discussion of some of their findings and promised a draft report for the Committee's review "in a couple of weeks".


And then?   Nothing.

The report has not been completed, and there is no public indication that the Committee has even made an effort to pursue its completion.  Could that be because two members of the old Executive Counsel are now on the School Committee?

Just to recap, these were some of the issues being examined:

1)    The Executive Council had been submitting warrants for payment without School Committee approval (despite previous warnings from the Town's auditor that the practice was illegal).

2)    The Executive Council had been approving multi-year leases obligating the Town to future payments without the review or approval of the School Committee

3)    The balance in available cash, as shown on the ledgers of the Community School was not reconciled with (and, in fact, did not match)  the cash balance shown on the Town Accountant's ledgers (the Town Accountant was reconciled with the bank -- so her balance was good).  At the April meeting, the auditor said it was unknown how long these numbers had not matched, or the cause of the variance.

4)    The Community School uses the cash method of accounting -- which means summer camp revenue is recognized as income when it is received in April-June, but the related expenses don't get recognized until they are incurred during July & August.  Because the new fiscal year begins on July 1, this practice distorts annual operating results and has the potential for seriously misstating income.

5)    The Community School had never been audited previously.  There had been some very limited "Agreed Upon Procedures" which had been done at the request of the Executive Council.  These results were only reported back to the Executive Council (until a School Committee member began asking for them!). 

6)    The Community School also received a review as part of the annual town audit.  But, because the CS is such a small part of the Town's overall financial exposure, these reviews were cursory at best.  As part of these procedures, the Town's auditor also issued a management letter suggesting certain area of concern or potential opportunities for improvement. These letters were routinely ignored.

7)  There was little effort to properly match program expenses with the related income.  As an example, certain pool costs were charged to overhead and allocated to ALL Community School programs.  This completely distorted the operating results of programs such as the pool because relevant costs were actually spread over other divisions.   Another example was Driver's Education -- because Driver's Ed represented x% of the School's revenue, it was charged X% of the school's expenses -- the reality was that the program was subcontracted to an outside contractor and the operating costs were minimal. (In fact the most expensive part of the course --- the road training -- was not even done on site.)

8)   There was little effort to properly allocate operating expenses between the School District and the Community School.  While the Community School chose to make some "in kind donations" to the School District, there was no concerted cost accounting effort to ensure that the District was actually reimbursed for the cost of the heat, lights, cleaning and maintenance of the facilities used by the Community School.
9)    While the Community School recognized income from the rental of classroom, gyms, fields, parking lots, auditoriums, etc. from outside parties, all related cleaning, and utility costs related to those spaces were paid from the tax dollars in the School District budget.

It's important to note that these long-standing practices had been effectively sanctioned by School Committees for years.  I have no doubt that past Committees felt they had far too many other responsibilities and were very comfortable delegating Community School oversight to the Executive Council.  There is, however,  no provision in law that would allow an elected school committee to delegate their responsibilty for oversight of these public funds.

10 comments:

The Truth Maker said...

Bobby, it is about time that all this dirty laundry be exposed to the taxpayers of Sandwich who have been paying for these illegal expences from the districts school account, under the guise they are for school expences and not community school expences. This has to be one of the biggest scams placed upon the taxpayers over many years by the community school excutive committee. No wonder some of the present members of the school committee do not feel comfortable in getting this information out. Will it show them to have placed the community school in a better light at the direct expense of providing less of a quality program for the students where our tax dollars were supposed to be spent? Yes, I think I would attempt to keep that undercover myself.

The Truth Maker said...

I hope they have all cleaned up there hands, before they get in the cookie jar.

Anonymous said...

Backing up to something stated earlier, The Community School is a good idea, and no one wants to do away with it. However this article about no public report from the audit demonstrates that the public is not being given the whole story about the financial burden the taxpayer pays to support the Community School. It may not be efficient and sustainable in it's current form. It may be overstaffed and too broad in it's mission and offerings in regards to responsible financial operations in respect to not only the tax payer's dollar but also in repsect to diverting school dollars from classroom needs and education. The taxpayer needs information. The School Committee needs to do their job. The Community School needs to understand holding on to what they have is not neccessarily the best thing for the town. They need to be forthcoming with all information.

In all fairness, The Community School like so many other aspects of our town has been making this up as they go, given the issues rapid growth imposed on Sandwich. And they have done a heck of a job. But I'm not sure good financial practice and good policy has been enough of an issue. Now it's time to regroup like all aspects of town government and face the facts that sustainability and planning will be key to our budgets and planning for the future.

An operation in town buildings, with energy costs, wear and tear, security complications because it's a school, etc are at issue can't be deemed a suuccess just because it throws a wide enough net to continue to pay for it's employees and benefits. In kind donations need to give way to solid facts about how to make sure we recoop operational costs and address all the issues of a community school being in a school building. We owe that to the taxpayer and the community. Once again, when solving this problem becomes more about agendas and small town political power then about common sence and addressing the needs of the hear and now, we all loose.

Anonymous said...

I have always been a Community School supporter. But, I think it is absolutely essential these issues be resolved if there is any chance of continuing the good services provided by this program.

The Truth Maker said...

Bobby Some of the above commontary does hit the nerve of why it is very important to have a full and open dialog as to Community School costs and expences. How does all the money raised from this account actually tie into the community school operation and what savings are occurring by not being back charged by the actuall school district financial outlay from there accounts.

Do they really make money at the expence of the School districts allotment for educating the children of Sandwich? Many accountings from past researching on this subject have shown that to the case, but one could say it all depends upon your veiw point.

That is why a private and independant study be done by a company that has a better and unbiased approach to the subjet at hand.

Anonymous said...

Its kind of amusing that the Selectmen allowed a School Committee member to maintain her paid job with the Community School.

Who's kidding who? Does ANYBODY think she will have an objective opinion?

I am sure that DA would love this...

Anonymous said...

The past few months have been far from amusing. The fab four Marshall, Linehan, Crossman and Kangas, have done an outstanding job of destroying the school system in just a few short months. Cahill, Susko and Killion appear to be the only ones who fight for the children anymore. Why isn't anyone fighting for the 3800 school children?

Anonymous said...

The new majority has done considerable damage, I would agree. But I would not agree that the other 3 members are fighting for our kids, the integrity of our school system, and the well being of our town. Or at least in my book they aren't fighting hard enough. Being mad and insulting at times to the new majority is not fighting in my opinion. Where is the leadership on either side?

Anonymous said...

after sitting back and reading all these "comments" for a few weeks now - it has become quite clear that the people who entertain this blog with their comments are pots calling the kettle black - you all claim that the "fab four" are stupid mindless uneducated dolts - seems like bullying at its best to me - nothing constructive here - just a sounding board for the FEW people in town who didn't get their way - i say grow up, simmons had his share of open mtg. violations,the previous SC had its share of integrity ruining antics, but no one was petty enough to bring it up. you all seem to be fighting your own vendettas against a group of people who were elected by the MAJORITY, that makes all of you the minority, with your petty little comments and greater than thou attitudes - i hope your children don't read this blog - because the new bullying policy will be usless if they follow your examples

Bob Simmons said...

to Anonymous 10:06 --- A few points:

"simmons had his share of open mtg. violations" -- No, he didn't. There were two "anonymous" inquiries to the DA that were resolved without a finding. There was also the infamous meeting continuation where the entire committee publically voted to continue the meeting -- likely a technical violation, but I suspect a judge will soon rule thatit was not sufficient enough to void a contract.

I'm not sure what an "integrity ruining antic" is. (I doubt you do either)

"no one was petty enough to bring it up" -- Are you kidding? You, and the local gossip monger never missed an opportunity to bring up every petty, irrelevant issue -- without any concern for accuracy, or the fact that you had absolutely no understanding of what you were talking about.

"Bullying" ? Nobody has ever filed a complaint against ME -- (or my spouse!).

You are correct that you were elected by a majority of those that showed up to vote The goal of the people who post here is to make it clear to the rest of the Town WHAT HAPPENS when they DON'T show up to vote. So they don't let that mistake happen again.