Monday, April 12, 2010

MSD Decatur Township Administration Play Blame Game in Audit Response

The most recent audit of the MSD Decatur Township books (spanning July, 2007, through June, 2009) by the Indiana State Board of Accounts reveals one of the hallmarks of the school district's Administration - blaming somebody else for their failures.

All findings of the SBOA audit team are presented to representatives of the governmental unit prior to publication of the audit. Any response to the findings by those representatives is included in the final document in the form of a letter attached at the end. This letter and its contents are not reviewed by the SBOA for the sense or nonsense of its contents; it is simply attached at the end.

I have previously noted how the audit found sloppy bookkeeping and the Administration response to that. Here I would like to focus on the audit findings that the district spent more money than the School Board appropriated and that the district overdrew several fund balances.

Here's what the audit says about spending more than was appropriated:

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

Fund Year ExpendedExcess Amount
Debt Service2008$ 1,282,858

A similar comment appeared in prior Report B32087.

IC 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 noted above, the district spent more than the School Board appropriated in earlier years, as well. In fact, for the 4 years preceding the two years covered in this audit - I noted this in my blog entry "Decatur School Administration Broke State Law by Spending More From Funds Than Had Been Appropriated by Board" - they also over spent. The process of budget review and appropriation of money for specific purposes is a state mandated process intended to keep the review and expenditure of taxpayer money in the public eye. If, during the year, more money becomes somehow available, the district needs to go through the process for those added monies in order to spend it legally. Yes, it is a violation of state law to spend more than the School Board appropriates - but, unfortunately for the Decatur public, this is not unusual in our School District.

The SBOA had this to say about overdrawing funds:

The following funds were overdrawn at June 30, 2008: Debt Service, Retirement/Severance Bond, Local Rainy Day, Construction, Vehicle Repairs/Misc., Textbook Rental, Challenge Learning Center, DTEF Small Grants, GQE Remediation, Early Childhood Center Preschool, Star Grant/DCHS, DWD Biomedical Science Grant; Title II Part A, and Reading First 2008-2009.

The following funds were overdrawn at June 30, 2009: General, Debt Service, Retirement/Severance Bond, Special Education Preschool, Construction, Vehicle Repairs/Misc, Textbook Rental, IMI 2007-2008, Challenge Learning Center, DTEF Small Grants, Early Childhood Center Preschool, School of Ideas, Title I School Improvement, Title III English Lang. Acquisition, Title II, Part B Math and Science.

A similar comment appeared in prior Report B32087.

The cash balance of any fund may not be reduced below zero. Routinely overdrawn funds could be an indicator of serious financial problems which should be investigated by the governmental unit. (Accounting and Uniform Compliance Guidelines Manual for Indiana Public School Corporations, Chapter 9)

Now, I didn't go into it before, but this criticism was also leveled at the Decatur School District in the audit that spanned July, 2005, through June, 2007. At the end of the fiscal year (June 30) 2006, there were 7 funds overdrawn leaving a negative balance. At the end of fiscal year 2007 12 funds were overdrawn. And this audit reveals that at the end of fiscal year 2008 14 funds were overdrawn and at the end of fiscal year 2009 15 funds were overdrawn.

The response letter to this audit's findings was signed by Superintendent Don Stinson and the Chief Financial Officer signature is hard to read, but might be Robert Harris, Jeff Baer's replacement. The parts related to appropriations and overdrawn fund balances reads:

The records presented indicated expenditures in excess of appropriations. As a result of the mandated reassessment in 2007, Marion county has been woefully behind in property tax collections and distributions to the units of government. Therefore, the budgets for this audit period were approved by the State of Indiana over one year late. This means that the budgets for M.S.D. Decatur were approved after the year ended. Obviously, there will be overspending in some funds when the budget is approved "after the fact". Hopefully, going forward, Marion County property tax collections and distributions will be timely thus ending this issue.

Overdrawn Cash Balances;

There were overdrawn funds during this audit period. Once again, because of the 2007 mandated reassessment, Marion County was delinquent in their property tax distributions to the units of government. Even after excessive borrowing, there will be funds that are overdrawn because of late distributions from the county. As was stated above, the funds were received as much as one year late. Timely property tax collections and distributions from the county will remedy this situation.

It cannot be ignored that these two problems are chronic problems in the MSD Decatur Township and did not begin with the state mandated property reassessment ordered in 2007. More importantly, they attempt to lay the blame for these two problems on somebody else. So, lets look at their logic more closely.

The School District drafted a budget for the two fiscal years 2008 and 2009. They would have received guidance from the State Department of Local Government Finance for how much revenue to expect from property taxes - even though the property taxes would be collected late and sent to the district late. Using this guidance, the district not only knows how much to budget, it knows how much to borrow in a 'temporary loan' or 'tax anticipation warrant'. With all of that information in hand, the School Board appropriates the money that may be spent in each fund.

But, the district spent MORE money than the budget called for. That has nothing whatsoever to do with late property tax collections. They spent MORE money than the budget called for. The funds balances were allowed to go negative. They spent MORE money than the budget called for. It doesn't matter when the DLGF certified the budget - the budget was approved and the money appropriated by the Decatur School Board before they spent MORE money than approved and appropriated.

Stinson just wants to blame anybody else that he can. This excuse doesn't hold water.

Its just like when I asked about the temporary loan included in the retirement pension fund (see "And They Wonder Why...") and they said it was a coding error by the Department of Education, and after being called out on that statement by the DOE they blamed it on some person who no longer works for the District.

Its just like the former Concentra building. First the public was told that they weren't buying the building, just leasing some space. When pressed further, they said they were leasing to own, but it would be relatively inexpensive to turn it into an elementary school; that was the reason to buy it. Now we are being told that they can't think of selling the building even as they lay people off, because the economy is sour. When the solid truth all along has been that Stinson and his cronies don't want to be in their tiny offices in their tiny Central Office; they want to move into the fancy building across the street and impress people.

It is just one thing after another with this Administration. And they always have a poor excuse or have somebody else they would rather the public blame. Well, I don' think the public is buying their excuses and finger pointing any more. The SBOA audits have provided us with enough concrete information to know that it is time for a change in the way this School Board and the Administration do things.


Anonymous said...

The Taxpayers and news media need to turn up the heat on the school board and Don Stinson. It's time to put a STOP to this wasteful spending.

Anonymous said...

You are very accurate in your presentation of this information. The district has been digging this hole for years. Interesting, that there was never a "hint" of concern offered by the board. Even more interesting, the superintendent has alway "restructured" his personnel arrangements at both the building and central office levels to promote/legitimize his personal goals. He was WRONG, WRONG, WRONG. Board members who have consistently refused to look at the facts are WRONG, WRONG, WRONG.

Anonymous said...

At what point are these people held accountable? Most of us work outside the home and if we caused this much of an over-spend / financial error year after year, we most certainly would be answering to someone. Does this not raise red-flags for the state? Does the community need to raise the flag to start an investigation? I was at the March board meeting (joke) and will not be able to attend tmrw due to work schedule. Hopefully many more people will show up this time. But you can believe I will be at the polls to vote them out!!!

Anonymous said...

Can't wait to hear what kind of whiney story Don Huffman will have at the SB meeting tomorrow night. Trouble maker Cathy Wiseman just sits there like the rubber stamp she is. SHOW UP AT THE MEETING! KICK THEM ALL OUT AND START OVER!

Anonymous said...

Someone might like to go to the Indiana Department of Education website and check under the Office of School Financial Management for the "General Fund Summary of Expenditures." All districts are listed. Decatur spent $3,371,048 for General Adminisration. No other school district in Marion County was close to this figure and Decatur is one of the smallest. Decatur has to show that it cares about class size and that it believes that teachers are necessary for good schools. Check out the report.

Had Enough Indy? said...

anon 8:33 - it took me a bit to locate that office of finance - for others cut and paste this link into your web browser:

and you'll get to the page with all sorts of links to information and data.

Thanks so much anon 8:33 -- but the document I am looking at, shows that in 2008-2009 school year they spent over $4 million on general administration. Outrageous. Its half of what IPS spends for general administration !

Anonymous said...

Had Enough:

Yes, I think that is correct in 08-09. The document I looked at was 07-08 (You found a more recent one!!!). The spending is outrageous and it makes it impossible to reduce class size - no sense to it - pad pockets. Just so sad - makes me sick. Unfortunately, if Decatur parents don't get this injustice out there it will continue. There must be a change in leadership - voluntary or involuntary. Present administrators (including Sullivan) will be just more of the same. The board credited Baer for wonderful work on the budget and the person who was a consultant wrote the budget but that person did not control expenditures - he was not an employee just a consultant who prepared the required paperwork for the state.

Anonymous said...

What is clear to me is that my children are experiencing an excellent education opportunity in Decatur Township Schools. Educational opportunities that are not offered in other Marion County schools. The owner of this blog clearly has no understanding of school funding and budgets. I would recommend partnerships not personal attacks on the very school community that makes a difference in the lives of children every day. Most comments in this blog are unfound and merely personal attacks. YOU appear to be shallow and perhaps scorned by a prior loss. I would applaud the district for formulating a pay based on performance program and oust the teachers who are simply there to collect a paycheck. Now there is something to talk about!

Anonymous said...

Anon April 13, 10:33

How about a pay for performance plan for administrators????????? Glad your children do well in the classroom. The data is clear that many, many children do NOT do well in the classroom. The teachers are being asked to be accountable for this and the superintendent is receiving "merit pay."??????????????

Anonymous said...

Anon 10:33
Yes if you look at the facts of testing scores and the graduation rate you will find that your children are very lucky. Most children are not doing so well. One of the problems is it does not seem to be going up anytime soon! Those of us in the schools helping, friends with a lot of the staff, and go to these board meetings see what is going on. We are the ones so fed up we are taking our kids to different schools. The kids that will remain are from the parents that have not done their homework and not become involved. The kids will still be there because no one is fighting for them to suceed!

Anonymous said...

check this out