Clarke County Grand Jury Finds 'Grave Concerns' With School District Finances
Resources have been exposed 'to increased risk of fraud, theft or misuse.'
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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