No fraud found in schools audit

Published 12:00 am Saturday, January 21, 2006

WINDSOR – While corrective measures are ongoing to repair financial problems within Bertie County Public Schools (BCPS), an audit of the system has discovered there was no fraudulent activity present to cause those troubles.

During a press conference held Thursday afternoon at the BCPS central office, Bertie school officials were joined by Gerrelene Walker, the system’s new auditor, to field questions from the media. BCPS Superintendent Dr. Nettie Collins-Hart, BCPS Financial Officer Ernest Howard and Bertie Board of Education members Seaton Fairless (Chairman) and Gary Cordon also attended the 45-minute press-only affair.

As Cordon read the opening statement, it became immediately clear that Walker and BCPS officials were hosting the conference in regards to their disappointment of the news media’s misinterpretation and misrepresentation of the facts surrounding the 2004-05 audit.

“We are here to provide the truth about the audit,” Cordon said as he read from a prepared statement. “It seems to have escaped notice that the audit revealed that our fiscal operations received an unqualified rating, which is the highest rating an audit can receive.”

Cordon went on to say, “nowhere in the audit is a finding or suggestion of fraud.”

However, Cordon said there was no question that the BCPS fund balance was too low and that Walker had noted three areas in need of improvement. Those areas included all disbursements should be documented by original invoices or receipts, paying charge card bills in a timely manner to avoid late payment fees and making sure the schools make daily deposits of the monies collected (i.e. lunch money, admission to athletic events).

“We have already taken corrective action and provided staff training regarding these three areas,” Cordon said.

When asked if the new auditor was brought up to speed regarding the financial problem areas addressed by the MGT study performed last spring on BCPS, Walker was quick to answer.

“I was aware of the whole situation,” she replied. “I investigated the MGT study. I investigated the last two Bertie Schools audits. I knew what I was getting into. In performing our audit, we performed more tests, more work for Bertie County Schools than we normally do for an audit just because I knew of those areas.”

While BCPS officials emphasized this was not a second audit, an independent, internal audit was ordered last August by the School Board. That audit was to address the financial issues raised by the MGT study as well as subsequent issues raised as a result of a review of the records produced in response to the records requested by the Bertie Board of Commissioners.

“Initially, there were inquires for additional information and that information was provided,” Dr. Collins-Hart said. “In August, the (School) Board decided that in order for the Superintendent to focus on educational issues, we would turn this over to our attorneys. Our attorneys are working on and continue to work on an internal, and I don’t want to use the term audit, study. Since that time, the County Commissioners have turned over, to the SBI, (BCPS) records for investigation.”

Dr. Collins-Hart continued, “Our new auditor looked into the findings of the MGT study report. After completing the regular audit, she came back to us, understanding what our fund balance was, to say is this what you really want to do with your money (continue with the other study)? That particular study, on her part, has not been done. She did provide feedback on the MGT study, particularly the areas regarding financial operations. Whether we go have her do further investigation, I cannot make that recommendation to the Board at this time because of funds.”

When asked how the extra burden of additional studies, audits, the desegregation issue and attorney fees have impacted BCPS finances, Fairless said, “For one thing, it’s worked our fund balance down.”

“These items were not planned for,” Dr. Collins-Hart added. “Our attorney fees have tripled over what they were budgeted.”

Declining enrollment at BCPS schools, especially the elementary schools, has forced the system to return state ADM (Average Daily Membership) money. That, coupled with escalating costs to run a school system plus the BCPS efforts to maintain current staff and offer existing student programs has placed Bertie Schools in what Dr. Collins-Hart described as, “double jeopardy.”

In Tuesday’s edition, the Roanoke-Chowan News-Herald will report on how BCPS officials had to use its fund balance to remain operational, the local funds supplied by the Bertie Commissioners, and cost-saving measures BCPS may employ, including the possibility of closing two, perhaps three, elementary schools.