SBOA Audits

The State Board of Accounts has some new audits -- they never stop working. For Marion County, there is a very interesting audit of the Marion County books, for way back in 2006, which is just before Billie Breaux took over the County Auditor spot. Here's a snippet of the cover letter:

The Single Audit Report contains twenty-one current audit findings and $6,205,934 in questioned costs on pages 13 through 44. The auditors have issued an adverse opinion on compliance with applicable requirements for seven of the eight major programs.

An audit for the City of Lawrence for 2009, is also up.

Kara Kenney, WRTV, Puts Spotlight on Decatur's School Audit

WRTV reporter, Kara Kenney, has turned a bright spotlight on the Decatur School District's recent audit. The State Board of Accounts audit of the district's books from July, 2007, through June, 2009, showed that they failed to get their fund balances to agree with their bank statements in any month during the two year period. See my blog entry "Decatur Schools Audit Shows Sloppy Bookkeeping".

Click here to read the article with an embedded video stream of last night's broadcast of the piece. The article has overlapping information and is not identical at all to the video. You can leave comments on this page.

I tried to find a way to embed the video here, but could not make it happen. If you go to this link, there is an option to post a link on your facebook page, on twitter, etc.

The video has a great interview with Natalie Coffey on this issue. And the interview with the State Board of Accounts Examiner, Bruce Hartman, is also informative. His final word on the subject is :

Hartman said members of the public have the ultimate oversight of schools' budgets, with their voice at public meetings and their vote.

"If (school leaders are) not doing the job, maybe someone else should be put in there to do the job," he said. "It's important for fiscal cash management to know what you've got and what you don't have. Failure to do that can really lead you to have some problems."

We are working on it Mr. Hartman. Thanks for all the work you do at the SBOA. I know I for one, appreciate it. And, thanks to Kara Kenney for the great reporting !

SBOA Audits Posted

New audits of the books of Marion County School Districts have been posted on the State Board of Accounts website. These include:

MSD Washington Township

MSD Warren Township

MSD Lawrence Township

School Town of Speedway Audit

The Indiana State Board of Accounts Audit of the books of the School Town of Speedway is now available on the SBOA website. Click here to go straight to that audit. In the short time I have been poking through these audits, this is the first instance of no deficiencies worthy of comment by the SBOA.

If you are looking for another audit, go to www.in.gov/sboa and click on either the "recently released audit reports" in the main photo just under the State Board of Accounts name, or click on "browse our audit reports online" in the right hand column.

City of Southport Audit Now Available

I continue to look through the recently published audits of the State Board of Accounts. For Marion County, an Examination of the City of Southport books is now available. If you are interested in Southport politics, this is a must read.

If you are interesting in audits by the SBOA, their website is a must see. www.in.gov/sboa will get you there. The recently released reports a available by clicking the main picture (which says 'Recently Released Audit Reports'. To view the archives, the link is in the lower right hand panel and it says 'Browse Our Audit Reports Online'.

Some New Audits For County School Districts Available

Every so often I check the State Board of Accounts Website for publication of the current audit of MSD Decatur Township books. Audits are conducted every other year and we are due for one covering the 2007-2008 and 2008-2009 school years. Alas, ours was not up yet.

But three other districts in Marion County were published. Click the name to be taken directly to the audit:

MSD Perry Township

MSD Warren Township - Athletic Department

MSD Wayne Township


In addition an audit of the Washington Township (not schools but township government) has been posted.

Decatur School Administration Broke State Law by Spending More From Funds Than Appropriated by Board

Previously I have reported that the MSD Decatur Township School Board violated state law by purchasing 4 properties without the required appraisals of fair market value and that the District has a long standing pattern of loose accounting for credit card use - information gleaned from the public documentation of audits of the District's books by the State Board of Accounts and published in 2006 (covering July 1, 2003-June 30, 2005) and in 2008 (covering July 1, 2005-June 30, 2007).

Today I pull in from these two audits the fact that the School District Administration, headed by Superintendent Don Stinson, has routinely spent more money than the School Board appropriated in various funds during the annual budget process. This is a clear and disturbing violation of Indiana State Law.

From the audits reported in 2006 and 2008, we find that the Administration

-- in 2003, overspent the budget appropriation in one fund by $57,235

-- in 2004, overspent the budget appropriation in another fund by $360,384

-- in 2005, overspent the budget appropriation in several funds by an aggregate amount of $1,481,418

-- and

-- in 2006, overspent the budget appropriation in several funds by an aggregate amount of $2,355,728.

You will note the alarming rise in the amount of the overspent quantity. Superintendent Stinson and Assistant Superintendent for Business Jeff Baer clearly overstepped their authority and violated state law in doing so.

This law is not a bit of minutia pulled from an obscure section of State Law that few know about. It is the fundamental basis for all budget processes each and every year; undertaken by all units of government in full view of the public. The process is in place so that the public has the ability to review, give input, and protest if they choose, the budget of every governmental unit that impacts their wallet or purse. The process also puts the budget squarely in the hands of those responsible for it and its effect on taxes - the elected officials; in this case the elected School Board. Once the budget is in place and the tax rate approved, there is a mechanism available to add or change appropriations. But, unless that alternate process is followed, spending more than is appropriated to each fund is a violation of State Law. Stinson and Baer didn't bother. They just spent the money without going through the public process created to protect the public from possible nefarious aims of those whose hands rule the public coffers.

Every Decatur taxpayer and every elected School Board member should be very alarmed at this practice and the pattern of ever increasing brazenness in spending larger and larger amounts outside of the budget and appropriation process - and thereby in violation of State Law.

Here is what the audit from 2006 had to say:

The records presented for audit indicated the expenditures were in excess of budgeted appropriations for the General Fund in 2004 by $360,384 and the Transportation Operating Fund in 2003 by $57,235.

Indiana Code 6-1.1-18-4 states in part: "... the proper officers of a political subdivision shall appropriate funds in such a manner that the expenditures for a year do not exceed its budget for that year as finally determined under this article."

And the audit from 2008 says:

The records presented for audit indicated the following expenditures in excess of budgeted appropriations:

Fund	2005	2006
General	$ -	$ 188,692
Transportation Operating	539,487	1,121,124
Rainy Day	311,915	763,388
Capital Projects	630,016	265,612
Pension Bond Debt	-	16,912

Indiana Code 6-1.1-18-4 states in part: ". . . the proper officers of a political subdivision shall appropriate funds in such a manner that the expenditures for a year do not exceed its budget for that year as finally determined under this article."

As with the long standing lax regard toward District credit cards, it will be extremely interesting to read the SBOA's report for the audit now underway of the District's books from mid-2007 through mid-2009, to see if this pattern of spending outside what has been appropriated to the various funds has continued or has ceased. Let us hope it is the latter.