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WCTA requests plan for general fund from WCSB

Jul 11th, 2014 | 0

    The Walton County School Board(WCSB) met on the evening of July 1, 2014 at 5 p.m., for their first of two regularly scheduled monthly meetings.
        Board members approved the agenda before them and adopted the prior meeting’s minutes before opening the floor to public comments.
       Executive Director for the Walton County Taxpayer’s Association (WCTA), Bob Hudson, approached the board to speak about the group’s budget concerns for the district.
        “I have some questions that have come to us from our members and from my on personal experience as a former school board member and a CPA,” Hudson told the board. He requested information about the timeline involved in the discovery of the budget shortfall. “I know you have been watching that fund balance, but it appears it went south on you in a relatively short period of time,” he said adding a little later, “Can somebody tell me when you found this out?”
        Board member Sharon Roberts responded that she was notified on Thursday night that the Superintendent Carlene Anderson needed to meet with her on Friday concerning an emergency situation.
        Board member Mark Davis said his recollection was they had discussed in on the phone that Friday and exact numbers were not discussed.
        Anderson said the prior Tuesday, June 24, during putting together final budget amendments she recognized there might be an issue.
        Hudson said, “we’re just trying to find out what we can do as a community to resolve these issues.” He asked the board and Anderson what they had looked at to avoid what happened in this instance.
        Davis said since it had only happened toward the end of the prior week they had not been able to do anything as a board, and he spoke of wanting a different reporting system for board members to keep up with the percentage of expenditures going out. 
        “We would hope and request that you come forward as a board, with a plan, to insure that you are given correct numbers,” Hudson added.
        “To sum up our requests to you, we have three: for this board to come forward with a detailed explanation of exactly how this happened. Number two, we think you owe the public some accountability for exactly how it happened. We believe in accountability. We entrust you with dollars and we expect them to be spent appropriately. We want you to look at the qualifications of your CFO. The last thing is you have to restore confidence. What has happened is not a bright and shining star for the schools.”
        The Herald/Breeze will have part two of the meeting in next week’s edition.

Board tries to start budget process with interim CFO
    A regular meeting held by the Walton County School Board(WCSB) as well as a budget workshop last week has left the budget process at the district a little in flux due to the district’s Chief Financial Officer(CFO) Mary Hobbs, taking leave on July 2, after the regular meeting on July 1.  
        Board Attorney Ben Holley spoke up towards the end of the workshop held on the evening of July 7, cautioning that the term “criminal” that was directed at Hobbs by board member Sharon Roberts and Walton County Taxpayers Association (WCTA) executive board member Suzanne Harris could be considered too much in his opinion. 
        “I listened here the other night at the board meeting and they kept talking about criminal acts. I’m an attorney. I know what a criminal act is and I haven’t heard anything that was other than it may have been negligent, but it’s not criminal,” Holley told the board. 
        School Superintendent Carlene Anderson told the board at the opening of the budget workshop, “Board members I don’t have the information for the budget workshop tonight that I was intending to present to you, which was just preliminary expenditures and revenues and looking at possible budget reduction items or changes to our budget. Mrs. Hobbs, our CFO has provided me with her intent to resign or retire. She’s looking into retirement at this time and she is using vacation leave starting today that will run through July 30. Without having a CFO here to present, I do not have that information for you tonight.”
        Board chair Faye Leddon addressed the board, “In light of what has happened in the last week, seems like we have lost credibility with the public and probably some teachers with some other things that have happened. I would like to suggest maybe we have an audit, because I don’t personally feel that Mrs. Hobbs did anything wrong. I don’t know what happened so, maybe if we have an audit we can find out what happened and it would help us to clear up any problems we might have, and put to bed some of the people that doubt what’s going on.”
        Board members turned to board member Mark Davis as to what type of audit they would need, and Davis responded, “Each year, we have a financial and regional management audit. We’ve never had a finding of material weakness. We’ve had findings, but they would not be worth their weight if they didn’t have findings. To my knowledge we’ve never had a finding go more that two years,” he said, except for a negotiated item that didn’t get negotiated.
He added, “if you’re asking if we need a different audit than that I think to make that decision, we need to hear from the temporary CFO until we hire a new one, what they have found or discovered and in my mind then we can make a decision what we need somebody to look at. Do we need a full blown financial and management audit? My response is no. They’ll start again here in two months. They’re usually here three months if not longer.”
Holley agreed, “they are very thorough.”
        Holley and Davis were referring to the Auditor Generals Office, an independent entity that goes over the district’s books every year. The board members agreed to put the discussion on the July 15 regular meeting agenda.
        Board member Dennis Wallace said he agreed with Davis, “you know the word that got bandied about last week was forensic. Most audits are anyway. If I understand it correctly, we’re taking about $800,000 in a $100 million budget, which resulted in the fund balance instead of being 3 percent was 2.2 percent. Aren’t there just a couple of areas, a couple of things just stick out, that those items are over budget? Have we put any scrutiny on those items? I think it would be a good place to start.”
    Anderson responded, “to answer you question, Wednesday, about 4 p.m., I was in a meeting at the south end and realized I was getting a text from Mrs. Alford, who said Mrs. Hobbs had come in and said she’s resigning. So, Thursday we were closed. Friday we were closed. I contacted the Superintendents Association and asked for them to send me some assistance, of which they did. Mr. Jim Hamilton, a retired former CFO, CPA. He’s been sent in to help, to get us prepared for the TRIM notice, and help us begin our tentative 2014-2015 budget. He will only be able to help us this week, so I’ve also secured someone who is a former CPA, CFO and recently retired as well, and he has told me he can come in for a month and help us get through the TRIM notice.”
Anderson said she was focusing on items in the budget process that had hard defined dates that had to be met by law. Anderson added that substitute teacher costs were a big issue in last year’s budget.
        An advertisement for the CFO position was placed on the district’s web site to run for two weeks and Anderson said she had asked for it to be noted that they were seeking a CPA for the position in the job ad. Anderson added that job applicants would be interviewed by a team of other CPA/CFOs from local districts that are retired. “It’s a targeted selection interview. Very job specific.”
        Davis asked for the job description to be added to the next agenda. “It’s an opportunity at this point to tighten it up, even though we’ve signaled through the advertisement we are only going to hire someone with a CPA.”
        Roberts directed a concern to Holley, “my concern after this event is a reputable CFO is going to be hard to come by without a forensic audit taking place first. I’m not certain that a CFO from outside will want to take books with an uncertainty, or the appearance of an uncertainty. What procedurally would we have to do to start looking for a company to do a forensic audit? Is there parameters that we have to stay under ’cause of dollar amounts or what’s the procedure for that Mr. Holley?”
        Holley responded, “well, I think auditing is a professional service. I don’t think you have to go out and bid.” Leddon spoke up and said. “I have a question. It’s nothing personal Mrs. Anderson, but because of what has gone wrong, what’s gone down and Mrs. Anderson is responsible for day-to-day operations of the school district, should this be somebody that she get or should it be somebody the school board gets?”
        Davis responded, “well, we don’t have the authority to hire for any services without a recommendation from the superintendent.” Holley agreed and said, “but, you have a right to reject it.”
        Wallace chimed in and said, “I can’t even imagine somebody that comes in to do a forensic audit that has the creditials to even do it, that, that’s a concern.”
        Holley responded, “I’m not an accountant. I find it hard to believe that the problem we’ve got here, the nature of it is something that requires a forensic audit.”
        Anderson added, “well, in the discussion today with Mr. Hamiliton he said he can’t imagine why we would need a forensic audit. Anderson continued, “if you look up the term forensic audit, it’s very different. It implies some-type of malfeasance or fraud that you have some reason to suspect malfeasance or fraud and that’s why you have a forensic audit. He [Hamilton] said to me he doesn’t even know why I was talking about it.”
         The next regular meeting of the board will be on July 15 at South Walton High School (SWHS) in the media center. Workshops start at 3 p.m. with the regular meeting beginning at 5 p.m.

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