Currituck calls for audit of school district's finances

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Currituck commissioners discuss proceeding with an audit of the Currituck County Schools' finances during a work session, Thursday. Commissioners agreed to have County Manager Dan Scanlon proceed with a plan for auditing the county schools' books.


By William F. West
Staff Writer

Monday, July 17, 2017

CURRITUCK — Frustrated by what they claim is a lack of transparency in the county schools’ finances, Currituck commissioners are calling for an audit of the school district’s books.

Currituck commissioners directed County Manager Dan Scanlon last week to come up with a plan for hiring an auditor to review the school district’s finances. Scanlon advised commissioners the audit would probably cost between $40,000 and $50,000 and involve asking for information beyond what is included in a traditional audit.  

Fueling commissioners' concerns is what they claim is a lack of full disclosure by school officials about the district’s finances as well as the district’s heavy reliance on fund balance — above what the county already appropriates — to pay for school operations

During Thursday's work session, commissioners said they would be willing to meet with school administration officials and the Currituck Board of Education to discuss their concerns. But board Chairman Bobby Hanig made clear commissioners don’t want a repeat of the joint meeting the boards held in February. Commissioners said afterward they left that meeting empty-handed about specifics when they raised questions about the school district's finances.

Reached Saturday, Currituck schools Superintendent Mark Stefanik said he was not aware of commissioners’ call for an audit of the district’s finances. He noted the school district’s budget is already available for review because it’s a public document.

“So it is available for review anytime anybody wants to review it," he said.

Stefanik also noted the school district already has its finances audited by an independent auditor every fiscal year. He said the audit for the 2016-17 school year that ended July 1 is ongoing, but all of the district's past audits are good.

"And so if anybody wants to check our books, our books are wide open for anybody to look at," he said.

Stefanik said commissioners can get the answer to every question they have from the school district’s finance office.

“But, if they believe that an auditor is needed to get the specific answers to their questions, we’ll fully cooperate with that because we already do cooperate with the audit that we undertake every year,” he said.

Stefanik said school officials are also willing to lay out what financial information they have at a joint session of the two boards.

“If the information we provided didn’t fully answer their questions, then we can address additional questions — and we’d be more than happy to meet with them to discuss our budget,” he said.

During commissioners’ work session on Thursday, Commissioner Paul Beaumont was critical of school officials. He took issue with their handling of a number of school-related matters. He expressed particular concern about what he said is an unfilled physical education teacher position.

"Our school board or administration has decided we're not going to have a professional coach to backfill that position," Beaumont said.

He said school officials’ justification for not filling the position is there isn’t money for it in the district’s budget. Given the school district’s formerly healthy fund balance, he questioned the schools’ not having money for the position.  

"We've gone through $4 million of fund balance in like, four years? Five years?,” Beaumont said. “We have asked, 'Where is the money going?'"

Up until now, however, school officials haven’t given the county a good answer, he said.

"They have consistently been incapable of producing that," he said.

Scanlon told commissioners the information Stefanik has provided him shows the school district's anticipated fund balance, as of June, will be at approximately $2 million. From that, he said, the school district plans to spend $1 million in the coming school year.

He said he asked school officials to explain how the $1 million will be spent.

"We don't have that answer yet and that's still out there," he said.

Scanlon said at that pace of spending, the school district’s fund balance will be at zero in a couple of years. He suggested that level of spending could in turn be problematic for the county.

"If this is the road we're going down, that is a minimum two-cent tax increase to be able to make up that difference," he said.

Stefanik said the school district has relied on fund balance to pay its expenses for years, including prior to his arrival as superintendent in 2015. School officials monitor the account closely, he said.

“We’re making sure that it doesn’t go to zero,” he said. “We want to maintain some type of fund balance.”

He recalled that February’s joint session of the two boards included a preliminary discussion about the amount of fund balance both school officials and commissioners would be comfortable with.

“And we never got the consensus on that point at that conversation,” he said.

Stefanik said he would not respond to individual commissioners’ comments about the school district without talking to them first. He said he wants to engage commissioners in a dialogue so they can better understand how the district’s money is spent.

Hanig agreed to a request by Commissioner Kitty Etheridge for commissioners to seek another joint meeting with the school board, but he made clear the financial information needs to be provided first.

"Otherwise, we're wasting our time," he said.