State of concern: BOE requesting full investigation of school system

Published 12:00 am Friday, April 13, 2007

The Selma Times-Journal

Reporter’s Note: This is the first story in a three-part series on the Selma City School System.

The Board of Education has proclaimed Selma City Schools is the wealthiest system in the state, yet board members haven’t a clue of the system’s exact monetary value.

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“We’ve been wrestling for two years trying to find out where the money at,” said Board Member John Williams, who appealed for a “full and complete investigation” of the school system during the board’s regular meeting Thursday. Williams went on to request the Alabama Attorney General’s office conduct the investigation.

According to Board Vice President Barbara Hiouas, there has long been confusion among board members regarding the school system’s financial records.

“The board informs the public that since August of 2006 it has spent a countless number of hours reviewing all financial statements shown to it by the former administration,” Hiouas said. “Some of the information requested was never given to the board, even after numerous requests. All of the information provided to us gave us no indication of problems, and in fact all reports indicated a balanced budget. Even so, we felt that there were problems, but could not obtain the date to prove any irregularities.”

On April 2, Associate State Superintendent of Finance Craig Pouncey called a meeting with the board to discuss his findings in a five-part report.

As of April 2, the report states the ending balance of the school system’s general fund is $10,039,502. The state requires that school systems maintain a minimum balance of one month’s operating costs. The total reported by Pouncey represents two months operating cost with $4 million left over.

Board members say the remaining $4 million should have been spent “on the students of our city.” Instead, Hiouas said $2 million has disappeared and is unaccounted for. As of March 31, the general fund stands at $7,757,805.82.

Acting Superintendent Dr. Verdell Dawson explained to the board that the general fund total did not include federal programs, debt services, capital projects, account receivables, account payables or encumbrances. But the explanation didn’t soothe the board’s concerns.

“There’s some corrections being made, but that still doesn’t eliminate the confusion the board has been under,” Williams said.

Said Hiouas, “I don’t feel we can trust any of these numbers. I can’t understand what has gone on financially in this district – where the money has gone and where it hasn’t gone.”

Pouncey’s report also indicates the system’s 2007 budget amendment, which was due in January, has not been submitted. The system has 60 days to submit the budget amendment. The schools are subject to lose approximately $1.3 million if the budget amendment is not submitted – again money that should have been spent on students, Williams said. In addition, the system could receive less money for programs in the future.

Pouncey discovered adjustments to bank reconcilements were not adequately documented, the presence of inconsistent fund source accounting practices, balances posted in file that were not normal to the account and the lack of training received by the system’s federal programs bookkeeper “through no fault of her own.”

Lastly, Pouncey found the system has abnormally large balances in many 30 areas, including the school nurse program ($120,600), Alabama Reading Initiative ($341,391), At Risk Youth Programs ($198,496), Title I Part A funds ($1,074,113), Education of the Homeless ($25,453) and Teacher and Principal Training ($302,716).

Hiouas explained the balances are high because they represent state and federal funds that have not been spent like they should have been. Hiouas added the balances have been carried over since 2005 and can no longer be carried over.

“These balances must be spent quickly or the monies will have to be returned to the appropriate government agencies,” Hiouas said. “They’re sitting in the bank. If we don’t spend them, we lose them.”

“The money was not benefiting the kids,” said Board Member James Terry. “That’s the bottom line.”

In a unanimous vote, the board decided to table general funds report and authorize an audit of the school system. The board agrees the public has a right to know how the system is faring and is encouraging city leaders and residents to call the Attorney General’s office to expedite the investigation. “This is a matter of urgency,” Hiouas said. “What we want is to know what we have.”

“We’ve not been told the truth and we’re accountable for it,” Williams said.