ORCSD Financial Auditor Remarks from Oyster River Community on Vimeo.
Please find attached my letter to the School Board and copied to Mr. Colter. I will post the excerpts I cite as a comment to this post.
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During the March 17, 2010 School Board meeting, third party auditors presented their findings on our past year's budget. From the auditors' Management Letter, there were two areas that raise significant concerns.
For your reference I attached relevant excerpts from the auditors' Management Letter on page two of this letter. The Letter may be found on the ORCSD web site as well.
First, the auditors characterize controls over disbursements as having "Significant Deficiency." The auditors' random sample of 25 disbursements revealed 24%, almost one out of four, were flawed, either not having departmental approval or not having vendor invoices. The auditors state that these circumstances "increase the risk that errors or irregularities could and go undetected."
Second, the auditors raise the concern that the District lacks internal audit practices. Internal audits are a reasonable practice our District should consider adopting. Moreover, one of the auditors explained during the March 17 meeting that Districts often use existing resources to complete semi-annual, internal audits.
I ask that the ORCSD Board request Superintendent Colter and his staff devise an appropriate plan of action to address these areas as soon as possible. We cannot afford to have funds disbursed without following sensible guidelines.
-Megan Turnbull
-Megan Turnbull
Excerpts from Oyster River Cooperative School District Management Letter for Year Ending June 30, 2009; Prior Year Issues, Items #1 and #2, p.3:
ReplyDelete1. Improve Controls Over Disbursements (Significant Deficiency)
During our sample audit testing of 25 vendor disbursements, we noted three items that did not have documentation of department head approval, and three others whereby the supporting vendor invoices could not be located. These situations increase the risk that errors or irregularities could and go undetected.
We recommend that all disbursements include documented department head approval, and that care be exercised in the control and filing of paid vendor invoices. This will improve documented oversight and control over disbursements.
2. Implement Regular Departmental Audits
Currently, the District does not perform regular departmental internal audits. Internal audits compliment the annual independent audit and provide important oversight over departmental accounting records throughout the year. Specific internal audit steps should include, but not limited to:
• Cash receipt monitoring
• Petty cash handling
• Student activity records
We recommend the District establish a schedule for periodic internal audits of departmental accounting records. This will result in improved oversight and should reduce the risk of errors or irregularities occurring and going undetected.
Mark Townsend as chair? Really? Mark Townsend? Seriously? Mark? Mr. Quiet? Mr. Personality? Mr. "I have to make one comment per night to show everyone that I am awake" Townsend?
ReplyDeleteHa, ha, ha, ha, ha, ha, ha, ha, ha.
Even worse, Henry Brackett as vice chair? Really? Mr. "tax cut's" best friend? Henry? Seriously? That is even worse than Mark as chair!
Ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha, ha. (exaggeration meant here)
Oh, alors! Quel domage. WHat a shame. There goes the neighborhood.
Oh, so now I know who "Durham Parent" is. Let's air out some more details that haven't come out. Seth Fiermonti is upset because his company didn't get the technology contract. That is what started this fiasco.
ReplyDeleteTwo companies bid on a proposal, one was higher than the other. The lower proposal, which one might think would be the better choice, was a far less superior product (the bed request asked for wireless technology, his bid included technology that was 1. incompatible with the district's equipment (so was said at the board meeting) and 2. the technology was several years old. It was said publicly at the board meeting that I watched and it was repeated by the business manager. I don't know about you, but I hope the board spends my tax money in a frugal way - but not on technology that is inferior and two years old (in computer years, that is like a 100 years)
The winning bidder was a company (I forget the name of it) that is familiar with the district's equipment and sells the same brand materials that already existed in the district's facilities. When you start mixing different companies' computer equipment, it can be a recipe for disaster. Even I, without a college degree, know that.
So, when you hear Seth complain publicly about bidding processes, much of his frustration is because he didn't win the bid - pure and simple.
As to the other issues he raised, I am actually glad he brought them up. I am glad to see that there is now a requirement to obtain many bids in an attempt to get the best price. THat is to be expected and hopefully will continue for time to come.
Yes, I'm Durham Parent. And yes, I got involved with the school board when my company (Foundry Networks, at the time) was under consideration for the network upgrade bid. During that process, I found many inconsistencies in the purchasing policy, and THAT, in addition to the fact that I have two children starting in the district, is what has led me to become a vocal participant at School Board meetings.
ReplyDeleteI harbor NO resentment that my company wasn't chosen. Indeed, I'm almost grateful that Foundry was not, simply because I never would have discovered the issues so many people are now talking more about.
As for the previous poster's comments on my company's products, let me please correct his or her misinformation. Our product was not old or obsolete and performed up to ten times faster than what the district ultimately chose. All the details are posted at the beginning of this blog.
What we need to do is move forward with more accountability, transparency, and communication to the public from the school board. I am a big supporter of the Town of Durham's resolution and I hope to see the school board take it seriously.
I just want to be clear- regardless of what technological equipment the district has chosen, I will be involved because I want to be sure my taxes are being spent wisely and our children are directly benefiting from excellent educational opportunities.
- Seth Fiermonti
I agree with Jocelyn's comment at the last SB meeting that each member should serve for 1 year in the position of Chair or Vice Chair (each person serves for 3 years, therefore, that would allow 6 people to serve in one position or the other). JoAnn has already served and Jennifer served an entire year too as Vice Chair and a couple months as Chair.
ReplyDeleteI am glad to see some new faces and hope that there will be some changes in the SB meeting process. There is a lot of talk and not a lot of action. The goals that they set are not reviewed and we have no idea what goals they set for the Superintendent.
Instead of making snide comments on a blog (which only serve to exemplify all the problems we currently have in this District), it would be great to see some suggestions of how people would like to see this Board function.
I thought about this and I think it all comes back to accountability, communication, and transparency. Just some answers to our questions is what we and the Town of Durham are asking. I have a couple of ideas.
ReplyDelete1. Start a ORCSD blog where the board members and administration can post topics.
2. Have an online "dashboard" where the board goals are clearly defined and every so often, update with progress and deadlines.
I'm sure there are many other good ideas out there but these are just a few to get us past the lack of trust on the administration/board side of things.
As I've always stated, I am happy with the education my son is getting and want that to continue. I think we have fantastic teachers.
I really hope that the teachers in the Oyster River district don't feel under fire. Seth is correct that we have fantastic teachers. There are very few duds in this system. However, it is unfortunate that the superintendent, the leader of the district is so weak. We need a dynamic leader who can earn confidence and be a team builder, bringing together administrators, teachers, parents, and students for a common goal. Colter is secretive, sneaky, and does nothing to bond the community. From what I have heard he isn't even liked by the teachers.
ReplyDeleteHe is not liked by the teachers, and we are waiting for others to catch on. Students are not put first, respected building administrators are put under fire, and teachers feel a lack of respect. We need the community to re-focus the efforts at the leadership of Howard Colter. It is frustrating for many of us within this district that it is obvious he is not a leader, but the questioning seems to hit the teachers more than him.
ReplyDeleteOur teachers are the District's most important asset. I hold the greatest respect for educators and the vital support staff who have DIRECT contact with our students. These civil servants make the difference.
ReplyDeleteAdditionally, there are several administrators who go above and beyond the call of duty to support our staff/teachers and enrich student learning. Mr. Harrington comes to mind.
Nevertheless, central office administration continues to fail to follow basic policy and make decisions without considering the impact to teachers and staff (who, besides parents, have the greatest impact on a child's education).
So, what can be done? Our School Board can begin to ask the tough questions during meetings and request justification for spending. One out of four disbursements are unjustified? This is unacceptable and should be addressed. Again, I ask our Board for Mr. Colter and staff to provide a clear plan of action to rectify the situation and begin to make improvements.
The Board is responsible to hold our central office administrators responsible for decisions and actions. I hope that this will take place. The Board governs. The Administration executes the will of the Board. Right?
The best money our district could spend would be in buying out Howard Colter's contract.
ReplyDeleteI second that motion!!!!
ReplyDeleteAs a teacher I don't necessarily dislike Mr. Colter. I think he could improve communication and he certainly could involve us more in the decision-making in every school. There are however, quite a few decisions that as I look back I wonder what he was thinking.
ReplyDeleteI think he was hired as an idea-man not really as a follow-througher. That was the job of the other administrators.
Here is the problem with this, a leader of a district is not only to be a idea person. They are to then have the ability to reach out to all constituants and complete the task.
ReplyDeleteIt is as if he has a head, but no torso. This is an infamous statement used by many to showcase a lack of leadership. It is great to have ideas, we all have many, but you need to have the ability to rally those to support such ideas as well as the ability to then put these ideas in place.
Howard is a nice guy, but do not confuse this with what a true leader needs to be.
I too look at many decisions made and have frustration over the lack of involvment from not only teahers, but parents as well. Howard is a terrible communicator, and our district deserves better.
Our building administrators have not had support, some have newly added fear, and the teachers are often left out of any choices made. The recent field trip mandate, the central office reorganization, are two that immediatly come to mind.
Some will say the central office re-org shows his ability to lead, many others will say it shows that he has ideas but does not think through the impact it will have. This lack of ability to think strategically is hurting our district.
We can not turn to the board as it appears they would only protect him, as is evident with how fiercly they are fighting a simple request to account for funds of the last fiscal year.
The administrative reorganization was a ridiculous rushed through idea. It seemed to come from no where. Hopefully, having a strategic plan will help to avoid this type of situation again. I also hope we have a board (finally) that is strong enough to stand up to this kind of manipulation.
ReplyDeleteAre people asleep at the wheel?
ReplyDeleteI just watched the Board meeting and was aghast when watching the CPA firm present their findings. Do you have any idea what this means?
I can only assume that the firm required the district to conduct a formal presentation to the Board because the findings are extreme. Clearly for those of you without a CPA, you may not know the significance of the #1 finding.
Let me attempt to explain and I can only hope that you see how extreme and serious this situation is for the district.
An annual CPA audit is conducted and is not designed to detect fraud. The primary purpose is to review financial statements in accordance with auditing standards generally accepted in the U.S. The audit does not set out to form an opinion regarding the effectiveness of internal controls.
Do you see why item #1 is so significant? The internal controls are so negligent and non-compliant that for the past 2 years, our district is considered to have SIGNIFICANT DEFICIENCY. As a result, recommendations have been made to tighten our internal controls in multiple areas.
In the scope of this audit, this is not a forensic audit, but this is an unmitigated failing on the part of our district. Simply put, the firm ran a control test and the district failed significantly.
The district should take this very seriously and consider rapid measures to respond to this crisis:
*a forensic audit should be considered to determine if fraud has been committed (3 invoices from vendors out of 25 in the test were not located; at a minimum, negligence puts the district at risk for fraud; the failure rate indicates that fraud is a significant possibility)
*new internal fiscal controls and process (developed by an expert from outside of the district with no connection to the school or even the community to be sure there is no bias)
*retraining all staff who deal with receivables and payables on this newly developed system
So, who wears a bow tie nowadays. He looks like an intellectual who hasn't seen daylight since 1989.
ReplyDeleteI don't care what he wears, I care what he has to say.
ReplyDeleteAnd what he had to say was that our District badly needs to get its fiscal house in order.
Worse yet, our Board has know about this for years and what have they done? NOTHING!
What makes you think the board actually knows the details of the district's accounting? They hire administrators to do that. It is the business administrator's job and his assistants.
ReplyDeleteYou cannot be serious...the Board receives a report from the District's auditors every year. If they don't know about it, they are failing in their duties.
ReplyDeleteYou ever heard of the fox guarding the henhouse? It is the Board's job to oversee the spending, not the administration's!