Hoo Boy! School District

cockroach-566712__340Lots and lots of ink about the school district this week.  As we know, $20,000 went missing from the Horace O’ Bryant Early Learning Center.  Obviously, that is not good.  But the way the matter was handled made things exponentially worse from a public perception standpoint at the very least.

Citizens became sensitized to corruption at the school district several years ago because of the Acevedo scandal.  There’s still a lot of residual suspicion – understandably so.  Three subsequent events, I believe, fed into the public’s ongoing skepticism about the school district.

  1. Acevedo was hired on at the Florida Keys Aqueduct Authority (FKAA) in a way that skirted normal hiring practices.
  2. Acevedo was then on the list to become a volunteer football coach at the very school district from which his wife stole over $400,000 as he looked on and did nothing.  (Note that Porter was dinged by Highsmith for the handling of this situation.  Note also the ties between Highsmith, Acevedo and the FKAA.)
  3. Kathy Reitzel was the Finance Director who brought the Acevedo matter to light.  She was subsequently forced to resign and has filed a whistle blower law suit.

There have also been a couple more recent developments.

One:  The school board decided against hiring a forensic accountant to look into the missing $20,000.  

I can’t say I disagree with that decision, but some of the comments about handling these matters “in-house” concern me.  The issue has already been examined by in-house staff, the Auditor General’s office, and an outside accounting firm hired by the superintendent.  The state attorney is looking into it and I think the result of that investigation should determine the next step.

While I don’t think the school district needs another accountant to look into the missing $20,000, I do think they need some outside help setting up effective policies and controls.  Those policies and controls need to be strictly enforced.  When the news first broke, there was some wishy washy talk about not wanting to “affix blame“.  Holy heck!  Here’s the exact quote from Porter’s statement.

I have always tried to look forward and find solutions to problems, and there have been many, rather than looking back and seeking to affix blame.

I don’t necessarily disagree.  I understand that there are lots of folks who simply want to find a scapegoat rather than actually address the root issue.  But Porter doesn’t seem to have addressed the root issue either.  To me, this quote sounds like a dodge.  Affixing blame for what?  What happened exactly?  I know the day care director’s contract was not renewed?  Was she the root issue?  What steps were taken to prevent a re-occurrence?  It’s all very nebulous.

Keeping a forensic accountant on retainer for a while might not be a bad idea.  It seems like the emphasis has been on “maintaining harmony” rather than on proactively addressing potential issues of fraud and theft.  Having an outside expert monitoring things might help keep the public interest front and center where it needs to be.

Two:  A school district employee, known as “Joe Weed” was recently arrested for an illegal gambling scheme.

He’s since been suspended from his job.  Note that Mr. Weed was arrested last year on drug charges, which is apparently what lead to the illegal gambling investigation.  (By the way, I have updated the Scandal Sheet.)  Like everyone else, I’m wondering if this is somehow related to the missing $20,000.

Here’s an interesting analysis from the Blue Paper by Dr. Martha Huggins.  It will be interesting to see how the school district addresses the matter in their Comprehensive Annual Financial Report (CAFR).  The CAFR for the 2014-2015 fiscal year is not available yet.  The 2013-2014 CAFR was accepted by the school board in March 2015, so I would expect this one to be available in March 2016.

Huggins pointed out something very interesting.  The CAFR is prepared by school district staff.  The Key Largo Wastewater Treatment District (District) has always had an outside firm prepare the CAFR’s.  I think this is a good practice.  An outside auditor has nothing to lose by calling out a deficiency, whereas a staffer might feel pressured to avoid mentioning it.  (I’m sure what happened to Kathy Reitzel is in the back of everyone’s mind.)

Dr. Huggins also made the point that it’s about more than just the missing $20,000.  It’s about management’s role in allowing the situation to occur, and not addressing it immediately.  It’s also about the cockroach theory.  This missing $20,000 is only one incident, and the superintendent chose to keep it quiet.  Are there more incidents that haven’t come to light?

I’ll be following with interest.  I have a feeling I’ll be adding more entries to the Scandal Sheet before this is all over.

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