Wow Baker-Tilly did a real-ass audit this year instead of the formalities. Losing $575k is what happens when you don't have financial controls for decades
Unfortunately Tom, I wouldn't say they did do a thorough job, I suspect the $1.3M in Material Weaknesses were too big even for them to miss. This District needs a Forensic Audit, going back through the Horton years, in the worst way. Baker Tilly's been a bit too friendly and chummy with the board. Sleepily so, in fact.
In particular the Lease Certificate documents and their supporting evidentials need to be reviewed. They're in breach of almost every single debt covenant in those agreements. I think a Forensic Audit will reveal they're in breach of all of them. That takes some serious doing but that's exactly what we're dealing with here. I think the result of a Forensic Audit would look something like this:
So I actually talked to someone in the audit business at one point and we went through the Baker-Tilly audit reports. Their feedback was the audit reports were basically what you'd see for any district - they pull a few random records here and there, check it out, and also do some reconciliation work. But it general, it would not catch fraud, etc, it's more of a general check on the books. So to this end, I wouldn't say it's chummy but rather just ordinary business (which says a lot sadly, about the audit business)
But this year, they at least did a little bit more. Baby steps...
That’s great insight Tom. I think for a well-run, squeaky clean district that would suffice.
Given how much we’re outspending better academically better performing Districts it begs the question, where did all the money go. For an organization with a history of feather-bedding including nepotism, running wild with company credit cards, $100,000 luxury vehicles for senior staff, $575,000 missing from bank accounts and even the proverbial free lunch it may be, just might be, perhaps finally time for a closer look. A full Forensic Audit.
Or not, if we just want to normalize this and pretend it’s all ok. Just go ahead with the next big tax hike and hold our nose at the ongoing mediocre academic results.
I 100% agree with you, a full forensic audit and then let's go after the person(s) that started this whole mess, after all, it's tax payers money and we can't just turn a blind eye to this. It's disgusting and flat out wrong.
Wow Baker-Tilly did a real-ass audit this year instead of the formalities. Losing $575k is what happens when you don't have financial controls for decades
I’ll add cash reconciliation to the list of metrics since it wasn’t apparently there
Yeah, like what the hell - nobody was doing reconciliation? That's like Accounting Best Practices 101
Unfortunately Tom, I wouldn't say they did do a thorough job, I suspect the $1.3M in Material Weaknesses were too big even for them to miss. This District needs a Forensic Audit, going back through the Horton years, in the worst way. Baker Tilly's been a bit too friendly and chummy with the board. Sleepily so, in fact.
In particular the Lease Certificate documents and their supporting evidentials need to be reviewed. They're in breach of almost every single debt covenant in those agreements. I think a Forensic Audit will reveal they're in breach of all of them. That takes some serious doing but that's exactly what we're dealing with here. I think the result of a Forensic Audit would look something like this:
https://www.forbes.com/sites/alisondurkee/2022/03/16/texas-school-district-and-former-cfo-charged-with-fraud-from-20-million-bond-sale/
So I actually talked to someone in the audit business at one point and we went through the Baker-Tilly audit reports. Their feedback was the audit reports were basically what you'd see for any district - they pull a few random records here and there, check it out, and also do some reconciliation work. But it general, it would not catch fraud, etc, it's more of a general check on the books. So to this end, I wouldn't say it's chummy but rather just ordinary business (which says a lot sadly, about the audit business)
But this year, they at least did a little bit more. Baby steps...
That’s great insight Tom. I think for a well-run, squeaky clean district that would suffice.
Given how much we’re outspending better academically better performing Districts it begs the question, where did all the money go. For an organization with a history of feather-bedding including nepotism, running wild with company credit cards, $100,000 luxury vehicles for senior staff, $575,000 missing from bank accounts and even the proverbial free lunch it may be, just might be, perhaps finally time for a closer look. A full Forensic Audit.
Or not, if we just want to normalize this and pretend it’s all ok. Just go ahead with the next big tax hike and hold our nose at the ongoing mediocre academic results.
I 100% agree with you, a full forensic audit and then let's go after the person(s) that started this whole mess, after all, it's tax payers money and we can't just turn a blind eye to this. It's disgusting and flat out wrong.