The following is a correspondence from Roger Fetterly to the school board last week, which--to no one's surprise---has gone unanswered. So much for community engagement and quality work product.At the Finance Committee meeting on 11/23/09, citizen --and former multi-term school board member---Roger
Fetterly pointed out a discrepancy between the
School District FY2008-09 Audit Report, which was reported by Kevin
Krysinski of Johnson and Block, and the information presented to the electors in the
2009 Annual Meeting report.
Fetterly pointed out that the Annual Meeting budget report for Fund 10 shows an Ending Fund Balance, Designated of $7,130,391.38 and an Ending Fund Balance, Unappropriated of $762,815.27 at June 30, 2009.
By
WUFAR (Wisconsin Uniform Financial Accounting Requirements) definition, the Unappropriated fund balance is the difference between revenues and expenditures at the end of a fiscal period and is commonly referred to as the surplus remaining at the end of the fiscal year.
The audit report Balance Sheet (page 3 of the audit) for the fiscal year ending June 30, 2009 for the General Fund shows Fund Balance, Designated of $7,893,208 and there is no Unappropriated balance shown.
It appears that the auditor combined the Designated and the Unappropriated amounts into one fund and identified it all as Fund Balance, Designated. When
Fetterly queried Kevin
Krysinski,
Krysinski said his audit was based on the financial records provided by administration. He said he would have shown the Unappropriated amount (in accordance with the
WUFAR accounting system)
if the financial records showed the Unappropriated amount. Therein lies a problem. There was no formal action by the school board (as required by
WUFAR, which states, "
Changes in this account results from formal budgetary action.") to shift the Unappropriated balance into the Fund Balance, Designated. It appears that the administration has exceeded its authority and is manipulating fund balance amounts to serve its own convenience and purpose.
Fetterly pointed this out to Terry
Shimek and the Finance Committee and the chair's response was to shrug it off and proceed to accept the audit without question.
Fetterly --and SP-EYE-- believe that the public deserves an explanation why the audit and the financial records and reports to the electors have an unexplained discrepancy for which the board has no rational answer.
Therein lies the second--and perhaps most egregious --problem. While the board and
administration may find sloppy accounting to be an
acceptable practice (
Hmmm...would any of our teachers accept similarly shoddy work????), it is
wholly unacceptable to
disregard any resident that presents a valid concern. SP-EYE has been party to and has heard third party reports of "unofficial" statements from several board members who have sheepishly agreed that the board has spoken about and agrees to summarily dismiss any presentation by a "
select few" residents. Care to guess which ones?
SP-EYE does not recall such a group discussion transpiring at an officially noticed public meeting....gee...yet another incidence of violation of public meeting laws?
Also, on page 32 of the audit under "2009-10 Budget," is the following statement: "
The District budget anticipates applying general fund balance of $1,879,643 in 2009-10 and the District will act on reducing the reduction of fund balance throughout the year." That statement does not reflect the action of the school board and has no place in an audit which should be providing reliable and factual information. That statement apparently reflects the wishes and recommendations of the administration.
Fetterly commented that the appearance is that the auditor is a little too cozy with the administration to get an independent factual report on the financial condition of the district. At best that statement can only be described as speculative.
On a slightly different but related matter, after Tim Culver stated that the "
State budget is a mess," it turns out that he and Phil
Frei produced a budget mess of their own at the district level. Their biggest problem is that they are unwilling or incapable of following the state statutes,
DPI administrative rules, guidelines and recommended formats for budget planning, presentation and reporting purposes.
1. The administration and the board dithered for months and did not have even a recommendation on July 1 when the budget for the 2009-10 fiscal year should have gone into effect. Remember, it was Tim and Phil that coerce the electors to change the annual meetings from July to October which allows very little time to meet November reporting deadlines.
2. The board was complicit in creating the mess by rushing to approve overly generous employee master contracts, administrative compensation plans and new spending programs such as 4K before revenue estimates were available.
3. When the board and the administration finally got around to it, they tried to adopt a budget before the public hearing was held at the annual meeting, ignorant of the fact that the only authority the board has prior to the annual meeting is to present a proposed budget at the public hearing.
4. Subsequent to the annual meeting, the board dithered again without adopting the budget until October 26th when the administration provided the following recommendation: "The Deputy District Administrator (Business & Operations) recommends the adoption of the 2009-2010 Budget (with October adjustments) as it appears in
[Budget item] attachment 5." There was only one slight problem; attachment 5 does not show a budget for the capital projects fund (Funds 41, 48, 49) and the food service fund (Fund 50), in addition to other funds not shown.
It appears that the board has only adopted part of the budget presented to the electors at the annual meeting.
Is the board going to get around to correcting this problem, or is food serve and other operations going to continue operating without an adopted budget? How was this covered in the budget report to DPI? It is evident that the board doesn't understand the budget so they just do what the administration wants them to do.
5. Another problem with adoption of the budget as shown in attachment 5 is that it is entitled "Budget adjustments 2009-2010." If you understood the law (Sec 65.90 Wis. Stats.) you would know that adopting a budget and making budget adjustments are two separate and distinct decisions an can not be legitimately mixed together. After the public hearing at the annual meeting the budget should be adopted by the board, subject only to changes resulting from the annual meeting. All other changes to the adopted budget must follow Section 65.90(5), Wis Stats., which requires a 2/3 vote of the entire board and a public notice within 10 days. If Phil and Tim are trying to confuse the board and the public---they are doing a great job.
6. A 3rd problem with attachment 5 is shown under the column titled "2009-2010 APPROVED BUDGET." The budget shown under that column was never legitimately approved. At best it was the budget that was proposed to the electors at the annual meeting. The first line of the so called "2009-2010 APPROVED BUDGET" shows "taxes" and gives the amount $36,678,662.
The electors, exercising their statutory authority, rejected that proposal from the board and voted a tax levy of $34,678,662, or $2,000,000 lower than what was proposed by the administration and the board. So---to list $36,678,662 as the "taxes" in the 2009-2010 APPROVED BUDGET is pure nonsense.
To show the $34,678,662 as the taxes under the "2009-2010 AMENDED BUDGET" column is a gross error. The electors vote to establish the tax levy at $34,678,662 could not be an amendment to the so called "2009-2010 APPROVED BUDGET" as it was displayed on attachment 5, and in the public notice published in the STAR. It appears too difficult for the administration and the board to understand that there could not be an approved budget prior to the annual meeting, the board can only present a proposed budget. To characterize the elector's vote to reduce the tax levy by $2,000,000 as an amendment to an approved budget is misleading and a falsehood created by the administration.
7.
In addition to all of the substantive errors in this mess of a budget, someone should have proofread the board documents one more time. On the second page of attachment 5, and the second page of what was referred to as attachment 1 (but not marked as such) and the public notice printed in the STAR on October 29
th and approved by Clerk Jill Camber Davidson, in addition to all the errors identified above, the columns under the DEBT SERVICE FUND are identified as "2009-
20109 APPROVED BUDGET" and "2009-
20109 AMENDED BUDGET." What kind of dates are those? It is reasonable to expect, that with at least 3 highly paid administrators and 7 school board members reading these documents (for comprehension, we assume), that someone would notice typos and correct them. Who is responsible for this sloppy work?
8. Finally, in the 2009-2010 Annual Meeting Report, on page 17, there is a math error in TOTAL ENDING FUND BALANCE under the Budget 2009-2010 column---the numbers don't add up! A computer spreadsheet is smart enough to add up a column of numbers if someone knows how to tell it what to do. What this tells me is that you have administrators and/or staff that don't know how to use a spreadsheet or a calculator.
SP-EYE: Mr. Fetterly is --to quote Marisa Tomei in 'My Cousin Vinny'-- "dead on balls accurate". The board needs to take action to correct the mess---no excuses. Mr. Fetterly is owed an apology, and the board needs to change its attitude towards citizens they don't particularly care for. The school board's Finance Committee and the school board owe the community an explanation and the corrective action taken to prevent such a mediocre performance again. The board's credibility depends on it.
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