by Dr. Larry Murray…
The annual Auditor General’s audit of the School District is now available for review on the District’s website. Specifically, it is attached to the agenda for the School Board’s workshop held on February 10, 2015. I urge everyone to read it. It is not particularly long, but it is very informative.
For the last month or more, Board Chairman John Dick and Superintendent Mark Porter have been bragging about the “clean” audit. Until very recently, the community had little choice but to believe them as they had seen the audit while it was withheld from the public.
A cursory reading of the audit reveals that there are 10 findings or deficiencies in District procedures, 3 of which are repeat performances of past years deficiencies. As it always does, the District promised to correct their problems but somehow managed not to do that in these 3 cases.
If an audit that identifies 10 areas that require remediation is a “clean” audit, when does the District consider an audit “dirty”? Is there a magic number, e.g. 20, 50 or ? after which an audit is no longer “clean”? It looks to me like the District’s attitude is, if the finding(s) do not rise to the level of fraud and thievery of the Acevedo regime, then there is nothing to be concerned about. The District can and routinely does promise to simply correct the finding. After all, there is no punishment beyond a slap on the hands in the form of public embarrassment, if that.
While you should read and review all 10 findings, my intention is to focus on those that I believe to be the most significant.
Finding No. 1: Audit and Finance Committee Meetings addresses possible Sunshine Law violations because of the failure in numerous instances to properly record, approve and publish meeting minutes. The District agreed with the finding without explanation and promised to do better.
At first blush, you might ask what is the big deal about the Audit and Finance Committee routinely publishing its minutes in an other than timely manner—and you would be right. The problem here is not the lateness of publishing minutes. Rather, the issue is that the lateness of publication is symptomatic of much deeper and graver problems that threaten the committee’s very viability.
When the School Board established the AFC in 2009, it also created the position of District Auditor, someone who would report directly to the Board and not to the Superintendent. The thought was that the two entities would work together and for a few years they did. Ken Gentile was the first and only auditor and he provided both administrative and investigative support and services for the AFC.
Those were heady days as the AFC began delving into a variety of financial concerns. Fundraising and public use of District facilities were two key initiatives. At times, the AFC was more aggressive, perhaps too aggressive, than the Board would prefer. At one point, the Board suspended the AFC only to reappoint it after a public uproar.
Eventually, Michael Kinneer stepped down as CFO and Gentile was moved to replace him. The position of District Auditor was left vacant and the AFC was left to the mercy of the Superintendent for administrative and investigative support and assistance. Investigative support never materialized under Gentile or his successor, James Drake. Administrative support, such mundane matters as preparation of meeting minutes for example, deteriorated to a point that the Auditor General had no choice but to step in.
Without a District Auditor to work with, the AFC has become a shell of its former self. Stuart Kessler, former chairman, worked hard to keep the AFC vital but he was judged by the Board to be too critical and he was summarily removed and not replaced. Ed Davidson has helped maintain the viability of the AFC by becoming a virtual member of the committee in terms of meeting attendance and participation. Davidson and Kessler have worked together closely on a number of cases, most notable the HOB audit.
The AFC has not met since last June and may never meet again. Kessler’s seat is vacant and Bobby Highsmith has failed to nominate anyone. Arguably, the terms of the appointees of John Dick and Ron Martin have expired. Given that circumstance, particularly the absence of a chairman, who will gavel the AFC into session?
My argument is that the demise of the AFC is directly a result of neither the Board nor the Superintendent providing it with the support necessary to function. That the Auditor General has finally noticed is not likely to change matters. The Board has long since decided that its experiment with community involvement in District affairs has passed its expiration date. Lest anyone had not grasped that, the message was made loud and clear with the summary and preemptive dismissal of Kessler to sate the political machinations of John Dick and Andy Griffiths.
Finding No. 3: Compensation and Salary Schedules, No. 4: Payroll Processing—Time Records, and No. 5: Motor Vehicles can easily be lumped together for a variety of reasons beginning with the fact that they are all repeat findings. For Finding Nos. 4 and 5, this is the third year that they were noted by the Auditor General. In past years, much like this year, the District has promised to take corrective action. Yet, for whatever reason, the District has proved unable or unwilling to do what it is necessary and promised.
In saying that the District may be unwilling to take necessary action, I point particularly to Finding No. 4: Payroll Processing—Time Records. According to the Auditor General’s report: “Based on our review of District records…District payroll procedures did not provide for a uniform method of documenting actual time worked….”
The District relies on timesheets primarily and expects employees to voluntarily and accurately complete these sheets on a regular basis. Further, these timesheets are to be reviewed and approved by supervisors. These basic practices followed by all businesses before paying personnel simply are not being done in the District and all the District could say is that it would try harder.
At a Board workshop to discuss the audit, Ron Martin, a former teacher and principal, blew off the criticism. It is his opinion that you are not going to get professionals, teachers, to keep track of their time so why bother. “It ain’t never going to happen” was Martin’s sage and eloquent observation. The fact that accurate timesheets are both a matter of law and best practice means nothing to Martin, or his colleagues on the Board presumably. One assumes that he made that clear to his staff when he was running Coral Shores High School.
Let me remind you that this is the exact same behavior, failure to maintain and review/approve essential records, that permitted Monique Acevedo to perpetuate her fraud against the District. How many hours, how many days, is the District paying for each pay period that are not being worked? My suggestion is to install time clocks in each school and administrative office. For a modest investment, the problem will be solved in one pay period if personnel are only paid for the time logged on the time cards.
Finding No. 5: Motor Vehicles would be laughable were not the matter so serious. The District maintains 94 vehicles, exclusive of school buses, and cannot keep track of them on a regular basis. The Auditor General found a “log for one vehicle with no documented purpose as to the usage.” Vehicle logs frequently go unapproved or are approved long after the fact. The District promised that with vehicle logs, like employee time sheets, it will continue its efforts to do better.
This year the Auditor General only looked at motor vehicles, not fuel usage. When it has, the AG has found recordkeeping for fuel usage as deficient as that for motor vehicle operation or employee work performance. I repeat what I said earlier: The District cannot or will not maintain proper records and will never do so in the absence of penalty.
It is the long-standing culture of the School District to play fast and loose with record keeping so as to permit employees the widest possible latitude in their behavior. That means, for some employees, that not only are you well paid, you can shave your time and still be paid; that you can travel about in a District vehicle to take care of personal business; and, failing that, fill your tank with fuel from a District pump.
Of all of the Auditor General’s revelations, the one that interested me most was Finding No. 6: Facility Use Fees. This is an area in which I took considerable interest during the past year after I learned that the principal at Poinciana School was permitting a religious organization, Eagles Rest Ministries, to use school facilities rent free.
Using Public Records Requests, I pursued a number of other facilities use situations and agreements. I learned very quickly that there were a lot of discrepancies in how District rules and regulations were being applied. I began to forward my findings to the Auditor General and I like to think that my efforts may have promoted the Auditor General to pursue this topic in depth.
I also like to think that my efforts were responsible for the School Board in October to approve a revised Facilities Use Agreement program and fee schedule in order to avoid further embarrassment. Unfortunately, I am not as confident as the District that this new facilities use program will resolve all of the problems. At this moment, for example, I am trying to get to the bottom of an agreement for use of the field at Sugarloaf School by a semi-professional football team and I am not having great success.
If you review the Auditor General’s finding, one thing jumps out—It is that the school Principals are exclusively involved with the execution of Facilities Use Agreements and any failings fall under those offices. While the District has rules and regulations to be followed and a fee structure, principals routinely ignore the rules as the Auditor General demonstrates repeatedly. In short, if you are friends with a principal, you can get a “good deal”. This is especially true at Key West High School.
The Principals have as much authority as they do because the Superintendent and his office are not involved in any way in the signing or execution of Facilities Use Agreements and have expressed no interest in so doing. Again, such agreements fall singularly to the Principals and the front office has no involvement or interest, not even a passing curiosity.
There is no requirement, for example, that the Superintendent be copied on any agreement. There is a requirement that any funds be forwarded to the Finance Office for deposit in the general fund. However, if the Finance Director is unaware of the existence of an agreement, how would he know if the rental fee was properly processed or, if something was processed, was it the correct amount? What I discovered and the Auditor General confirmed was that rental fees as often as not were deposited in the school’s internal account. What we will never know is whether or not any rental fees wound up in anyone’s pocket.
The District’s response and corrective action was the adoption in October of a new facilities use procedure. The primary change was in the schedule of rental fees. For example, the District no longer charges for air-conditioning use and instead absorbs a significant loss, a cost that often exceeds the rental fee.
Most importantly, the new Facilities Use process does not include oversight, improved or otherwise. Rental of District property remains the province of the Principals exclusively and, if you know a Principal, you can get a deal. So much for correcting the deficiency.
I invited you to read all of the report. For example, you can read about how the District misused $224,901 in tax money. When you have finished, it only runs 10 pages, you can decide as to whether or not it is a “clean” audit.