A matter of trust

The time, effort and commitment the Arlington School District board has demonstrated in its quest to fulfill its education mission are on par with any school district in Vermont. Unfortunately, the same cannot be said with regard to its safeguarding the integrity of the district's financial statements and reports.

Lest there be any misunderstanding, the ASD of Directors are genuine in providing a first class education to the children of the district. I only wished that a portion of such dedication had been directed to the fiscal management reporting of the District.

After waiting patiently for several years to obtain the "report card" on the school district's financial affairs the public was recently informed that the District's outside CPA reports will not be accepted. Instead, another CPA firm will be engaged to re-do the audits. How can this possibly be happening with a district that has been in existence for generations and operates with a budget in excess of $5.8 million.

And if the failure to obtain a "clean" audit opinion from the district's external CPA isn't bad enough, the district is in the middle of "a blame game."

The following was noted in a recent article in the Bennington Banner:

"Kelly (the CPA) blames supervisory union officials for lack of information..."

"Harvey (school board member)....we cannot solely blame Kelly for it."

Richard Pembroke (ASD's business manager) "audits are missing a lot of information."

George Carpenter (School Board member) placed the blame on Kelly "she did not meet the timeline."

The word blame is noted at least five times in Banner reporter Dawson Raspuzzi's article. Did anyone ever hear Sean Connery's comment in the movie "The Rising Sun"..."Fix the problem not the blame?" Obviously not.

So let's get on and fix the problem and stop with the "auditor) shopping." We don't need an audit firm from Albany and here's why:

1) How many times have I written on these pages that a board and senior management must set the tone? In this case the financial tone - this was not the case and sloppiness, carelessness and lack of internal controls prevailed.

2) Dorthea Kelly, CPA, noted that 92 entries has been posted and not documented. She also noted a number of entries to the school district's records having this comment "forced balance sheets, to match audit." In addition, she states that bank reconciliations were not performed on a timely basis or signed off by a supervisor. And most serious is that the board failed to review any of the cash reports it was supposed to review pursuant to its own policy.

3) Embezzlement of school funds so far has not been alleged. However, these types of financial control deficiencies and lack of board oversight are an embezzler's dream site, it meets the first basic requisite of embezzlement-opportunity.

I have a great deal of respect for Richard Pembroke and the work he and his staff have done in assuming the financial duties of the Arlington Supervisory District. I don't agree with his characterization of CPA Kelly's work. Kelly had a single job and that was to render her opinion on the financial statements of the district. The reports, statements, analysis, foot notes belong to the district, not Kelly. She "blew the whistle on the fiscal mess - she didn't create it."

Having to make and correct so many entries to the supervisory district's books, an auditor reaches a point where the statements are no longer the client's, but his/hers. Based on my experience as a CPA (former auditor), it is a point reached where you get up and walk out. Based on my review of Kelly's reports and the information not provided to her, I would have closed up shop and withdrawn. Kelly should be praised for her patience in having to deal with such a colossal bungle.

Shopping for a new auditor's opinion does not get the Arlington Supervisory Union any closer to resolving its financial reporting. When will it be that we can trust the data contained in the financial reports from the Arlington Supervisory District? This should be the number one issue for each board member and the ASD's management. The ASD just got an "F" which can begin to be improved only when the board accepts responsibility for the district's fiscal affairs.

Don Keelan writes a bi-weekly column and lives in Arlington


If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.

Powered by Creative Circle Media Solutions