Clarke County Grand Jury Finds 'Grave Concerns' With School District Finances
Resources have been exposed 'to increased risk of fraud, theft or misuse.'
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The April term of the Clarke County Grand Jury has issued presentments that examine the function of several parts of local government, including the Clarke County School District. The findings were based on a 2010 state audit of the system, the last one available.
That audit found "numerous, serious and repeated weaknesses in the school district's management of the finances that have been entrusted to them," the Grand Jury said. While there are several "material weaknesses," the findings of the Grand Jury list the most significant issues as:
1. A variance of $184, 379.20 exists between the reconciled cash total and cash recorded on the financial statements
2. The School District's Operating and Payroll Accounts are apparently both unreconciled
3. Certain bank reconciliations disclosed no evidence of supervisory review
4. The School Nutrition Account contained $594,686 in reconciling items dating back to 2008 that have not been corrected
5. Over $4,000 in reconciling items in the SPLOST III account were cited as 'appear to be invalid.'
6. Construction in Progress appears to be understated by $886,088
7. The School District did not meet the Maintenance of Effort required related to $556,724 associated with a Grant for a Special Education Cluster for children with disabilities
These weaknesses have been cited by the Independent Auditors for several years in a row, the Grand Jury found, and the school district has repeatedly agreed with the auditors' statements, promise to correct the problems and then not do so.
CCSD Chief Financial Officer Larry Hammel appeared before the Grand Jury on June 15, to address concerns and answer questions. He was hired, he told the jury members, to clear up the problems and to prevent future ones from occurring.
When asked how things had gotten to where they are with CCSD finances, Hammel said his predecessors had bought a new accounting sotware system "but were not proficient at operating it." The accounts became unreconciled and the problems piled up, the Grand Jury said.
Instead of "charging off" unreconciled items, Hammel committed "to reconciling all the accounts and tracing unreconciled items back to their origin to assure their legitimacy."
According to the Grand Jury, balancing and reconciling the accounts, instead of writing off unreconciled items, is the most important issue the School District must do to ensure to taxpayers no theft has happened.
Hammel addressed specific items in the State Auditors Report. These include:
1. Material weaknesses related to Internal Control of Finances. Hammel said Don Carter was hired 18 months ago to handle this problem and reconcile the outstanding items. The process likely won't be completed until sometime in late 2012 or 2013.
2. The incorrect addition and removal of more than $3million worth of CCSD property, which has led to misstatements of the district's capital assets. Hammel said this item will be removed from the 2011 state audit because "the corrections and proper entrees are being completed."
3. The School District didn't meet the Ga. Dept. of Education's standards for accurate financial statements. Ronnie Missimer has been hired to "clean up" this problem, Hammel told the Grand Jury.
4. The CCSD "failed to meet Maintenance of Effort regarding the level of ependitures required to meet Federal Matching program for Special Education Clusters involving $556,74.20" [sic]. This item won't be on the 2011 audit because the CCSD has received a waiver for it, Hammel told the Grand Jury.
The last part of the Grand Jury's report on the school district said members hoped that, with Hammel on board, the problems would be resolved. But it also stressed to the District Attorney--Ken Mauldin--and to subsequent Grand Juries that the matter needs to be followed closely "because the situation has all the elements and conditions for misuse."
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Dave Ballard
1:39 am on Monday, July 9, 2012
Private school systems don't generally have this issue because such systems, when found to have these kinds of problems, get charged with theft, embezzlement of funds, larceny, etc., and the people in responsible positions end up having to repay out of pocket or go to jail (or both). Reports like this show just why there's more spent per student in public schools than in private schools, on average: there are far more layers of bureaucracy, and they are all less accountable to anyone other than their immediate supervisors.
It is high time that taxpayers were given the opportunity to place their children (and more importantly their tax dollars) in the schools of their choosing.
Rebecca McCarthy
6:05 am on Monday, July 9, 2012
Dave,
I haven't heard of a private school system, only private schools. Their budgets are significantly less than a public school system; they may pick the students they want; and their financial records are not public documents, so you have no way of learning what kinds of financial issues private schools have. Some share information with interested parents, others do not, because they are not compelled to do so.
Dave Ballard
7:01 am on Monday, July 9, 2012
Dealing with your points in reverse order:
- Any school that hides its financial status to the degree you suggest would thereby give me a great reason not to pay them to educate my kids in the first place. In addition, there are laws and regulations in place that cover any for-profit, not-for-profit, or non-profit organization like that.
- The documents may not be public records necessarily, but if one has any concrete reason to suspect anything shady, the IRS is quite good at getting to the bottom of that sort of thing.
- Many private schools do screen because they have more applicants than they have slots, but for many, as long as you can pay the tuition, your kid can go. The rest judge mainly based on previous academic performance, or on religious preference in the case of parochial schools.
- Apples to apples, any board of trustees willing to let that big a percentage of their annual budget just disappear unaccountably is in a world of hot water, legally.
- The Catholic Church, for one, has many diocese around the country that have multiple schools in the same system, to the point of even running bus service. There may be others that do the same here and there.
Dave Ballard
7:04 am on Monday, July 9, 2012
Bottom line (and to address the article directly): that much money missing for that long is flat unacceptable, be it a public, private, parochial or home school situation. Mr Hammel has a tough job ahead of him, if he's going to manage to put matters right.
But the superintendant and the school board should be the ones feeling the heat, and I have a feeling they aren't getting any.
Rebecca McCarthy
7:17 am on Monday, July 9, 2012
I agree. There needs to be safeguards for re-checking financial records....the fact that the problems have persisted for years is what seems the most egregious finding.
Hugh Christian
12:09 pm on Monday, July 9, 2012
These accounting problems go back to the Carol Purvis era and before. The school district does not use recommended accounting practices and, while the various grand juries have found problems every year, they also always end on a positive note and nothing is ever done. There is no continuity from grand jury to grand jury, so there is no follow up. There is no physical inventoriy of assets. No one knows how many checking accounts they have, especially when one includes the various accounts, such as PTA's at each school. The items mentioned here are probably just a warning as to much larger problems.
Rebecca McCarthy
12:51 pm on Monday, July 9, 2012
Hugh, I think that's why this Grand Jury said the most important thing is for the next Grand Jury to continue to look at the records. Because there hasn't been any continuity in making sure things are in order. Heck, I was told there were some accounts the current officials in the school district didn't even know existed. I wonder if Bernie Still could help them out?