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The Cape Girardeau school board approved changes to the district budget Monday to include an additional $746,598 in revenue -- interest that had not been paid on investments dating back to June 2004.
Misty Clifton, director of finance, said that "on the bank's side," the account was somehow miscoded from interest bearing to non-interest bearing, and the district "never recognized" the mistake.
The former director of finance, Brenda McCowan, was placed on administrative leave Dec. 5, and she later resigned. Superintendent Dr. David Scala's contract was terminated effective Dec. 19.
A Bank of America representative recently noticed the mistake and informed Clifton.
The windfall covers the district's loss of $700,000 stemming from a mistake in calculating the tax levy earlier in the year.
The extra money does not equate to a net gain for the district. While revenue increased by $746,598 from the added interest, it also decreased by nearly $1.6 million, because the sale of the Schultz school will not be finalized this fiscal year. Overall, the budget was amended to decrease revenue by $475,050.
Meanwhile, expenditures increased by $766,149, mainly to account for renovations to the Alternative Education Center and metal buildings at the junior high.
Clifton was hired Nov. 5, and a budget prepared by her was approved by the board Nov. 19. She said that as she was preparing the budget, the discussion about renovations was "still in the early stages," and there was "uncertainty as to the exact costs."
Upgrades to the metal buildings at the junior high, which will eventually house the maintenance department and the Boys and Girls Club, will cost an estimated $204,000. Moving the Industrial Technology department from one of the metal buildings to the main campus will cost an estimated $300,000. The board is currently seeking bids for both projects.
At the meeting Monday, the board voted to cancel having an additional audit completed for the year that ended June 30. In December, the board voted to hire the auditing firm Larson Allen, but debated about the cost and benefit Monday.
Board member Paul Nenninger said he thinks the district "needs to provide the best foundation possible for the new superintendent" and said that "with the volume of mistakes" discovered he "couldn't vote for not doing it."
Kyle McDonald said Clifton was "doing a good job of finding errors." Laura Sparkman argued the auditors would only look at a random sample of entries, and said "they are not going to go through every sample in our books ... I know what you are wanting, but you are not going to get that."
An audit by the firm Beussink, Hey, Roe, Seabaugh and Stroder LLC released in November reported payments of nearly $2.5 million being made but never recorded and the district spending more than was budgeted in two funds.
Board members and interim superintendent Pat Fanger, however, have consistently said the district's finances are back on the right track.
"I'm very confident that things are under control," board member Martha Hamilton said in January.
335-6611, extension 123
Comments
"interest that had not been paid on investments dating back to June 2004"
This oversight began "before" Brenda McCowan was offered the director of finance position. If memory serves, wasn't Rob Huff the director of finance during 2004-05.
"A Bank of America representative recently noticed the mistake and informed Clifton."
Thank you Bank of America representative! This statement does NOT build confidence in the new finance director.
"At the meeting Monday, the board voted to cancel having an additional audit completed for the year that ended June 30."
Was the original consideration just a Public Relations ploy? There have been far too many past $700k mistakes that date back several years, and they are still being uncovered (by folks outside of the district). In my opinion, not having an independent audit is a BIG, BIG mistake in judgment by the school board!
Thanks to Nenniger for providing a dissenting voice. I think it was completely short-sighted of the board not to proceed with the audit. Apparently Ms. Sparkman thinks she has all the answers, but she doesn't. What a shame. I hope the elections bring change to the school board, and the new board makeup will revisit this issue and call for another audit before the new superintendent takes over.
http://www.cape.k12.mo.us/Administration...
Perhaps, those who are concerned might consider emailing the current school board and voice their opinions.
My concerns...Second $700,000 error...dating back several years.
This suggest long term financial irresponsibility, and poor auditing.
I think the School Board should revisit an independent Audit, as it is obviously needed.
I would also encourage the district and the board to get the Board of Education page updated. A more clearly identifiable schedule of stated meetings, current agendas, and approved minutes should be posted. The board would do well to at least act interested in keeping the public informed, and it's proceedings easily accessible to all.
I sit and read the article then I read the comments and I am amazed at how everyone seems to think they know all there is to know about what goes on. How is it that an individual can be discredited because they were passed a message from the previous director of finance regarding interest a week or so into the job. One should not pass judgement based on information that does not tell the entire story. This is not something new, it happened in November and if you actually watched a board meeting and knew what was going on you think a bit more before you comment on someones abilities.
GetaLifeCG, "How is it that an individual can be discredited because they were passed a message from the previous director of finance regarding interest a week or so into the job"
You seem to know more than was printed in the article? As I did not see a comment discredited a specific individual other than a former finance director.
Care to share what you know? (BTW...I did miss last night's meeting the first in 3 months, would very much appreciate an update.)
melange-
I think GetaLifeCG was referring to the following line posted by jafriedman:
"Thank you Bank of America representative! This statement does NOT build confidence in the new finance director. "
yasgurfarm,
I personal realize the new finance director has her hands full with what appears to be long term financial concerns. That is why, I feel strongly about another independent audit.
IMO The new finance director can use all the outside help we can offer, as to assure her success, as well as the school district's financial soundness.
It is true, audits generally spot check the financial process rather than completely comb every past detail. However, an independent audit appears to be an excellent fact finding tool, and is a widely accepted practice in the private sector, as well as by the IRS.
melange-
I completely agree. See my previous post.
I think the Missourian has crucified Mrs. McCowan enough. Enough is enough! As one of the writers states, the current issue of not receiving interest on a bank checking account began over a year before Ms. McCowan was appointed Finance Director. If her predecessor made such a mistake, how could she possibly receive quality mentoring to help her in her new position. Even though she was a business education teacher, that is not the same as having a degree in accounting. School accounting is quiet complicated. It involves something known as fund accounting, which is not at all like accounting and bookkeeping in the business world. Ms. McCowan is a quality person who devoted over 16 years to the Cape schools. It is a shame that she was booted out without the opportunity to return to a building level position like she had before. If she had been mentored by folks with good knowledge and skills in school accounting, perhaps these errors would not have occurred. Give her a break and leave her name out of future news stories. Let her get on with her life. She is a fine lady who now has no income, unlike the former superintendent whom the district will continue to pay full salary until July 2008.
snowman, this has nothing to do with Ms. Cowan. Get over it.