November 17 2017

School Officials Respond to Report Critical of Status of Student Activity Accounts

By: Rich Hosford

There was a lengthy back-and-forth at Tuesday night’s School Committee meeting between Town Meeting members, along with some members of Ways & Means, and school officials over a report on the state of Student Activities Funds.


The June 30, 2017 report, put together by the certified public accountant firm Roselli, Clark & Associates, was part of the School Department’s compliance with the 2015 “Agreed Upon Procedures and Audit Guidelines for Student Activity Funds” issued by the Massachusetts Department of Elementary and Secondary Education.


The report lists a number of shortcomings in how the School Department and the different schools in town handled, tracked and maintained money and checking accounts related to student activities. These includes things like field trips and other activities where students would bring in funds to participate.


The report lays out the accountant firm’s concerns and makes recommendations to remedy them. Under the new guidelines Student Activity Accounts must undergo an audit every three years and school officials say this is part of that process. Though the report says that Roselli, Clark & Associates “were not engaged to, and did not conduct an audit” school officials said they were given verbal assurance that this would count as far as meeting the state guidelines though they added they would get confirmation on that.


In the report the accountants say that the Student Activities Funds at the high school have been audited and are mostly run well, though there were some issues mentioned. The problems listed apply more to the middle school and especially the four elementary schools.


The first is training of personnel who administer the accounts.


“We found that all of the individuals involved in the process are very conscientious and all want to do what is right for the students,” it says. “However, none of the individuals have been trained under the new regulations and since these funds have never been audited, none of them were aware of how to administer the funds or what records to maintain other than the High School which had some limited knowledge of the process.”


The report also said that each elementary school had eight to 10 checking accounts, a “compliance violation” and that they need to be consolidated into one per school. It also said that the schools were “not reconciling the Student Activity checking accounts monthly and several were not maintaining a proper checkbook balance” and that it is “imperative” for the schools to do so. Further there were “no documented policies and procedures surrounding the operations of Student Activity funds” and the report states it is necessary for the School Committee to adopt these policies and procedures to ensure there are adequate internal controls to protect the funds and comply with Massachusetts General Law.


Another set of issues raised in the report dealt with protecting funds coming in for students activities. It noted that employees handling the money, with the exception of at the high school, were not bonded with the Town Treasurer/Collector and recommended that be changed. It also said there are no policy ensuring that a second person verify the count of money taken in.


School officials acknowledged the findings listed in the report and the need for the department to take action. Superintendent Eric Conti said a new policy is being written in conjunction with the accounting firm and Nichole Coscia, the department’s new Finance Manager, to address the issues raised in the report.


“What we’re lacking is a detailed policy by the School Committee so we’ll be writing a Student Activity policy that will be before you,” he said. “Clearly the review was enlightening and have things we need to correct and we will work to correct them. Thankfully we have Nichole in the office now who is qualified to do this.”


People in attendance, many of them Town Meeting members and/or members of Ways & Means, expressed concerns over the report and questioned why the issues raised had not been addressed before now.


Town Meeting member Gary Mercier of Precinct 3 said he had received numerous emails about the report and had some questions.


“The report says the elementary schools have eight to 10 checking accounts apiece and none of them have ever been balanced,” he said. “I want to know why nobody ever thought in 20 years to balance 30 checking accounts.”


He later added that this lack of oversight made it possible that funds could be misused though he was not alleging that had happened.


“I’m not saying anyone was taking any money but it is ripe for money to get misplaced if there is no reconciling of the accounts. You’d never know.”

Conti said one major factor was that there was a history of informality among accounts for things like field trips, which he said maintained relatively low balances, though he acknowledged it as a problem.


“I can’t speak for all 30 years but I can speak to the time that I’ve been here,” he said. “It was definitely an oversight on my part to ask that they be balanced and I think there had just been a lot of informality around these accounts. The teachers felt like they were doing the right thing, and again it’s our responsibility and not the teachers’ responsibility, but they were creating separate accounts and collecting money for field trips and depositing them in the accounts and spending the money. The balances are relatively low and I honestly felt the teachers were trying to do a service for students. There wasn’t a thought about the reconciliation and they weren’t directed to do so.”


Ways & Means member Joan Kennedy-Constant said she was concerned about, among other things, the lack of oversight of monies coming in to the schools.


“Cash was being handed over to teachers and school administrators and there was no second person doing the cash,” she said. “Even in a small mom and pop shop when you have cash receipts one person counts the cash the then it is handed to a second individual to count and none of this was being done at the elementary school level for 10, 20 or 30 years.”  


School officials and members of the School Committee acknowledged the findings in the report and said the department would make the changes necessary to fix them.


“As I’ve said, things weren’t done properly,” School Committee Chair Thomas Murphy said. “I’m not going to try to defend it and I’m not going to try to excuse and I’m not going to try to explain it. They were not done as well they should have been, clearly.”


Murphy said that to him what is important is looking forward and getting the policy in place so that when the next audit comes up the results will be different.


“I think the main thing to bring out of the meeting this evening besides from taking a well-deserved tongue lashing is that we’ve got a new policy going into place, we’ve got a new budget analyst on board and she’s working with the CPA firm to put these new policies in place,” he said. “We’ll adopt them and there will be more stringent and tighter monitoring of the process going forward and next time we’ll be able to know exactly how much the third grade teacher took in for the field trip to the Museum of Science and exactly how much she paid out.”


There were other points of discussion during the meeting, which can be viewed in full here.


There is also a second report from the same accounting firm being circulated regarding the Burlington High School’s Music and Performing Arts Revolving Fund that also raises concerns. It was not discussed at Tuesday’s meeting due to the inability for members to hold a Ways & Means subcommittee meeting beforehand, but it is scheduled to be discussed at the next School Committee meeting. It will be a source of further discussion and reporting.


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