IT'S TIME FOR A CLOSER LOOK.....
On April 18th, 2013, without prior notice, the members of the Cherokee County Board of Education were handed a 57 page document entitled CHEROKEE COUNTY BOARD OF EDUCATION ANNUAL FINANCIAL REPORT FOR THE FISCAL YEAR ENDED JUNE 30, 2011 which provided notice that the School District needed to make massive adjustments to correctly report year-end accruals and the related revenues and expenditures. Millions of dollars in unexplained write-offs were listed and the Board of Education has been given no explanation as to why such vast retroactive adjustments were needed.
Outraged community stakeholders from across Cherokee County spoke out in the name of fiscal transparency. Frustrated by an ongoing series of half-answered questions by the school district administration, taxpaying citizens began to read the audit for themselves. Seven (7) months later, the Board voted to invite the auditor to discuss the findings with the Board. This document is submitted on behalf of the taxpayers of Cherokee County who deserve to know the complete answers to these questions from an independent source.
The following summary of key issues and questions raised about the Fiscal Year 2011 Audit of the Cherokee County School District.
- Hidden Documents? The results of the FY 2011 Audit were held in private by the administration and presented to the Board of Education more than 5 months after the audit was complete and more than 14 months after the close of Fiscal Year 2011.
- Overspending while Underfunded? The CCSD was more than $12 million over budget. Perhaps a closer look at the books is needed?
- Findings Stripped from Audit Packet? An unqualified letter to management containing 9 material weaknesses and significant deficiencies that were uncovered by the audit firm was mysteriously not included in the original packet of information and has not been included in the Open Government section of the CCSD web site audit section.
- Unexplained Write-Offs? Millions of dollars in adjustments and write-offs were discovered AFTER the Board voted on a budget that included furlough days for teachers and the loss of days of instructional time for students.
- Uninsured Tax Dollars? Up until January 17, 2013, the District may have knowingly placed millions of tax dollars at risk. The auditor noted that at the end of FY 2011, $1,699,389 in deposits that were not properly collateralized/ FDIC insured at 110% in accordance with the Official Code of Georgia Annotated (OCGA) Section 45-8-12(c).
- Changes to Contracts? Despite the fact that the original Request for Proposal (RFP) required that the audit firm be available to address the Board at up to two public meetings, the audit partner was not invited to present the findings to the Board in a timely manner. Further review revealed that the final contract for the audit firm, Mauldin & Jenkins, was significantly altered so that it did not match the original RFP.
- Untimely Massive Adjustments? Adjustments totaling approximately $37,194,000 were needed to correctly report the opening equity balances at the end of fiscal year 2011 (page 47 of the printed report).
- Recurring Blunders? Comparing the audit findings from FY2010, FY2011 and most recently in FY2012, a common trend is revealed. Significant time lapses exist between year-end bank statements and reconciliation for those statements.