Thursday, September 20, 2007

Opening the Books On Accounting Oddities at MCPS High Schools

Opening the Books On Accounting Oddities
By Daniel de Vise
Washington Post Staff Writer
Thursday, September 20, 2007 




A parent's inquiry into spending practices at Winston Churchill High School in Potomac over the summer prompted the revelation that the school's activity fund was $224,225 in arrears and that, in fact, several other high school funds had at least minor bookkeeping problems.
School system officials released copies last month of the most recent audits of high school activity funds -- collected from students and staff and spent on their behalf -- to media outlets after the hubbub over Churchill, whose audit showed that several accounts had large negative balances and that funds for different events were intermingled. The overruns included the purchase of $14,062 in clothing and promotional items for staff to wear, with $120 collected from employees to pay for it.
The annual audits, released to The Washington Post to fulfill a public record request, showed similar bad record-keeping at several other high schools, albeit on a smaller scale.
The only school with a fund problem approaching Churchill's was Albert Einstein High School in Kensington. There, auditors wrote, the independent activity fund "was close to insolvency," having gone from a positive balance of $178,000 to a deficit of $20,000 in two years. The audit report cited a $17,000 expense to refinish the gym floor performed without a signed contract and the required approval of the school system's chief operating officer...

Wednesday, July 25, 2007

Schools prone to financial errors

Bookkeepers should be trained better and screened more carefully, audit committee tells Board of Education

Activity funds in Montgomery County Public Schools may be prone to bookkeeping errors because school money handlers are not trained or screened well enough, officials told Board of Education members Monday.
The board’s audit committee met Monday to scrutinize MCPS independent activity funds and the school district’s financial training and audit process.
The meeting was triggered by revelations in a March memorandum about ‘‘seriously deficient” bookkeeping at Winston Churchill High School in Potomac. The audit’s findings, showing a ‘‘large negative cash position,” were described to Joan Benz, Churchill principal, in the memorandum.
Benz did not respond to a comment request for this story...

Tuesday, July 10, 2007

DISASTROUS CHURCHILL AUDIT FINDINGS UNDERSCORE MCPS FAILINGS

Civic Federation Online

by Wayne Goldstein

July 10, 2007

Last week, the results of the internal MCPS 2005-2006 audit of Churchill High School’s Independent Activity Funds (IAF) hit the media. The IAF for Churchill and all other MCPS schools are made up a number of accounts for activities to benefit students such as field trips, school improvements, and memorial funds. The procedures for collecting and spending monies in these various funds are detailed in the “Manual of Policies and Procedures for Administering Independent Activity Funds.” The MCPS Internal Audit Unit audits various IAFs to determine if there is compliance with the manual.
The Churchill HS audit reveals that not only is this school’s IAF in profound disarray, but it also underscores the inability of the Internal Audit unit or MCPS leadership to do anything about a severe problem that has existed for at least three years. In fact, the internal audit supervisor writes: “The corrective actions identified in each response [to the previous recommendations of the audit unit] were not implemented and the conditions remain unresolved. To promote resolution of these conditions, we recommend that your response to this report includes a detailed plan for corrective action to be implemented prior to the next audit.” Tough words?
Here is a list of some of the problems found in the audit:
“There were deficiencies in coding and recording IAF transactions. Transactions were recorded inconsistently and in accounts not prescribed by the IAF chart of accounts... We found receipts and disbursements for fund raising activities recorded in field trip accounts, and activity from several field trips that were commingled.
“Rebates and bonuses from [corporations] were recorded directly to benefiting accounts, rather than the accounts intended for such receipts. Activity for a school trip to South America was recorded in an account titled ‘Spain Trip.’ Transactions for a band field trip to London were recorded in the ‘Music Trip/Cruise’ account. The ‘Scotland Trip’ account included proceeds from several fund raisers and expenses for a trip to the Kennedy Center.
“...Several accounts continue to have large negative balances. The ‘Auditorium Pit Cover’ account was established in October 2004 and the school subsequently paid a total of $27,953 for the pit from this account. An additional $68,337 of general improvements to the school were charged to this account with the only revenues being a small donation...of $1,100 and the prohibited sale of equipment noted below.
“...Several accounts have been inactive since the prior audit. Five accounts appear to contain funds collected for scholarships or charities. Inactive accounts should be researched at year end, balances disbursed or transferred appropriately, and accounts closed if no longer needed.
“...We continue to find a serious deficiency in control over disbursements. In addition to our examination of expenditures we deemed large or unusual, we randomly selected 55 items to review for prior approval, compliance with MCPS procurement policies, appropriate supporting documentation, and timely payment.
“...Prior approval was not received for 50 percent of the disbursements reviewed. Four disbursements exceeding &6,500 did not have approval of the chief operating officer (COO) as required... Contracts for athletic field maintenance, yearbook, drama production videos, and stipends for the ‘Blast’ and drama production were not signed by the principal. In addition, the vendor for the videos is an employee of MCPS, and such purchases must be pre-approved by the COO. A payment for athletic field maintenance in the amount of $30,100 was disbursed without an invoice. A payment for athletic field maintenance expense totaling $44,999.97 was split into three contracts, with each contract being issued for $14,999.99. This contract should have been competitively bid and processed through MCPS procurement.
“...The school purchased $14,062 in staff clothing and promotional items and recorded the expense in ‘Churchill Leadership,’ but only $120 collected from staff was recorded in the account... Such purchases are prohibited unless funded from staff activities or donations specified for that purpose. A staff member was paid a stipend of more than $11,000 without documentation to show the reason for the disbursement or how the stipend was calculated. Another staff member was paid $3,500 for choreography for the musical production without supporting documentation.
“...The school store was transferred to the boosters club at year end. An inventory was not taken prior to the transfer and a Statement of Profit and Loss was not prepared. A statement should have been prepared and included in the school’s annual financial report. The booster club operated the school store and concession stand during athletic events. The receipts and disbursements for these activities are recorded in the school IAF. Sales tax has not been reported for either activity. Sales tax needs to be calculated and remitted to the state.
“...The school vending contract has an automatic renewal clause after the initial three-year period, and the vendor is an employee of the school. Contracts that have a performance period extending beyond 36 months and contracts with vendors who are school employees require prior written authorization from the COO. The school sold audio equipment used in the auditorium to Northwood High School for $7,000. Equipment purchased with IAF funds becomes the property of MCPS and cannot be sold or disposed of by the school. All dispositions or transfers of MCPS property must be processed through the Department of Materials Management... Accordingly, the $7,000 should be refunded to Northwood High School.”
While this seems like an exhaustive and outrageous list of failures to follow the manual that also violate the most basic principles of running any business, this is only the worst of them. There are a number of other smaller ones, such as individuals using personal credit cards to pay for very expensive school items and likely receiving rebates or other personal benefits that the card provides them. All in all, the vast majority of regulations in the manual were violated, which strongly suggests they may have been violated with impunity.
Since this improper behavior has been going on for several years, with no action by MCPS officials to stop it, it is more of a MCPS failing than it is a Churchill HS failing, although it is that as well. In fact, this lack of inaction by MCPS officials is consistent with what the Baldrige judges found when they did their site visit last November and issued their list of criticisms in their “2006 Feedback Report”:
“...While policies are designed outlining the expectations of ethical behaviors for key stakeholders (employees, suppliers, board) the methods of monitoring those behaviors is informal. Without involving and monitoring these important stakeholder groups, MCPS may have difficulty overcoming strategic challenges and meeting goals.
“...Although the COO tracks and monitors more than 150 measures, there does not appear to be a systematic process for how MCPS ensures alignment and integration of data and information to track overall organizational performance for all support groups and at the district level beyond academic goals... There does not appear to be a systematic process for analyzing data beyond student performance to ensure non- academic goals are met for support groups. For example, some groups such as the print shop and transportation areas had no evidence of performance measures aligned with organizational objectives or how these data are systematically collected and aggregated to ensure alignment.
“...While MCPS shares some organizational knowledge within schools and clusters, there is not a well-deployed, systematic process for systematically identifying, sharing, and implementing best practices across the organization... In the support processes where there are measures, each instance or issue is handled as a separate and unique event, and results related to vendor and supplier performance are not aggregated or tracked.
“...No results have been available to indicate breaches of ethical behavior and organizational citizenship. Lack of results and comparisons for these measures of leadership and social responsibility could limit MCPS’ ability to address the core value of providing an ethical school system and could also impede its ability to create a positive work environment and strengthen productive community partnership.
The Internal Audit Office briefly published a newsletter called “In the Loupe,” a loupe being a small but powerful magnifying glass often used by jewelers. What started out as a monthly publication in May 2003 dropped to three issues in 2004, and two in 2005, with the last issue being published in August 2005. The premier addition, dated May 23, 2003, had an article titled “Ethics, Employees, and Endless Rules - Just a reminder that there is a code of ethics at MCPS. MCPS Board Regulation BBB, Ethics, contains specific criteria under which schools can enter into contractual agreements with employees. Make sure you are in compliance with this policy. Be certain that you are watching limitation amounts carefully. Some contracts may require prior written authorization of the Chief Operating Officer (COO). Maintain documentation of your efforts to receive competitive bids.”
Needless to say, Churchill does not appeared to have done any of that. This brings me to the question: Should MCPS employees also be allowed to provide services such as the school vending contract? While these employees’ bids have to be competitive, isn’t there a reason that we don’t want government employees also providing goods and services to the government they work for at a minimum because of the appearance of a conflict-of-interest? Does this policy also contribute to the atmosphere of a lax morality so evident with Churchill’s IAF? I don’t believe that county government employees can do what MCPS employees are now allowed to do.
If MCPS still thinks it will be in a better position to apply for and win a Baldrige National Quality Award in the next few years, spectacular failures like the secret decision to close Special Education Learning Centers and now the failure to control the behavior of certain Churchill groups are causing that goal to recede into the distance at a rapid rate. It is clear that MCPS has learned nothing from the Baldrige judges’ recommendations and continues to make and compound the mistakes that caused the Baldrige judges to downgrade their ratings in so many areas last fall. It is time for the rest of us to step in and start to teach MCPS leaders how to properly manage this institution.

Friday, July 6, 2007

2007: Middle school teacher faces new indictment on sex abuse charges

A Montgomery County grand jury issued a new indictment Thursday for the middle school teacher charged with sexual abuse of a minor in May and arrested again last month on a second set of similar charges.
Joseph Robert Ballmann, 47, of Rockville, was originally indicted by a county grand jury June 14 on a set of charges filed against him in May.
Ballmann was arrested May 2 at his home in the 11100 block of Cedarwood Drive in Rockville and charged with sexually abusing one of his students from Robert Frost in Rockville on numerous occasions from spring 2004 to May 2005.
Police said Ballmann had been the boy’s seventh grade teacher at Frost and allege he had engaged in inappropriate sexual contact with the boy at Ballmann’s residence, not on school property. The student is now 15.
Ballmann was charged with sexual abuse of a minor, third-degree sexual offense and sexual solicitation of a minor.
Ballman was arrested again June 7, after police investigated allegations that Ballman had had inappropriate contact with a second boy. He was charged with child abuse and third-degree sexual offense.
Police detectives allege Ballmann engaged in inappropriate sexual contact between 1995 and 1997 with a boy who was in the seventh and eighth grades at Westland Middle School in Bethesda at the time. The alleged victim is now 24 years old.
Police said the student and Ballmann, then a teacher at Westland, had developed a personal relationship as the two spent time together in activities both during and after school. The alleged abuse occurred at the victim’s home, not on school property, police said...
continues at link:

 http://ww2.gazette.net/stories/070607/montnew135004_32426.shtml

WTOP: Audit of High School Shows Lots of Red Ink

Kate Ryan, WTOP Radio


POTOMAC, Md. -- Parents wondered why they had to pay for textbooks. Auditors warned that sloppy record-keeping was causing problems.
Now, after finding that Winston Churchill High School's activity funds are nearly a $250,000 in the hole, the school's finances are being sifted through by the Montgomery County School's Department of Reporting and Regulatory Accountability...full report here

...When asked about the audits -- which are conducted at each school annually -- Edwards explains that the auditors are currently "working with the school to rectify the situation."
Edwards says it was unusual, but "the audit did not show any evidence of malfeasance, the audit shows that there were some serious deficiencies in their record keeping practices."
But why is Churchill, a school in an affluent area in one of the country's wealthiest counties, charging parents for Advanced Placement textbooks?
"We're in the process of checking that out too, to find out what the situation is -- if parents were in the position of paying for textbooks there, if so why, because they should be provided," Edwards says.
COMAR, the Maryland annotated code, requires that schools provide textbooks free of charge to students.

Monday, May 28, 2007

MCPS & Community Involvement - Letter from MCCPTA

May 28, 2007

Martin Creel, Director, AEI
Montgomery County Public Schools
850 Hungerford Drive
Rockville, MD 20850


Dear Mr. Creel:

I am writing with regard to the Accelerated and Enriched Instruction
Advisory Committee. As you recall, when you first contacted MCCPTA to
ask for two representatives to sit on this advisory committee, you were
advised that the proposed meeting dates of the fourth Tuesday of the
month were extremely problematic for our organization. The fourth
Tuesday of the months of September, October, November, January,
February, March, and April are our Delegates Assemblies.

I informed you at that time that MCCPTA desired to place two
representatives on the advisory committee who were active within MCCPTA
and who would be able to report to our delegates at the assemblies as
well as take parent input back to the advisory committee. You were also
informed that any MCCPTA representative who was active within MCCPTA
would have schedule conflicts and would also not be able to report to
our delegates at the assemblies as they would be attending an advisory
committee meeting on the very same evening.

You expressed an understanding of these conflicts and agreed to revisit
the dates of the meetings. It is my understanding that the committee
did vote to continue with the fourth Tuesday of the month. It is
disappointing that the group was not apprised that this meeting date
severely compromises MCCPTA’s ability to fully participate in the work
of the advisory committee.

As we move forward, I will likely have to replace one of our representatives, if not both on this advisory committee due to the scheduling conflict. I also want to be very clear regarding the
consequences of meeting on the fourth Tuesday of the month. If the
occasion arises that the advisory committee wants comments or input from
MCCPTA, there will be at the very least a two month turn around time.
If information is released for comment at an advisory committee meeting,
MCCPTA will be unable to discuss this information until the next month’s
delegate assembly and then, even if we ask our delegates to act on any
recommendations or endorse any comments without having had the chance to
take the information back to their local PTAs for discussion, our input
will not get back to the AEI Advisory Committee until the next month’s
meeting. If issues arise that delegates want to be able to discuss with
their local PTAs, this turn around time will be increased to at least
three months.

I am belaboring this point because I want it to be well understood that
when the time comes to offer comments on the final policy on accelerated
and enriched instruction and MCCPTA includes in their comments that
their ability to solicit feedback and give input into the policy was
knowingly limited by the choice of meeting dates, that the advisory
committee was advised of this conflict and the problems it posed before
the committee began its work.

MCCPTA is still hopeful that another day of the month could be selected
for these meetings so that our 52,000 members can be fully represented
on this advisory group.

Sincerely,

Jane de Winter

Cc Dr. Frieda Lacey
Ms Nancy Navarro
Ms Sharon Cox
Mr. Steve Bedford
Ms Kay Romero

Wednesday, May 9, 2007

Kingsley Wilderness Project prepares to close

Barring a change of heart by the county school system, the Kingsley Wilderness Project, which began as a three-year experiment in preventing juvenile crime, will close in June after 28 years.

‘‘In the initial years, there were people who were against the program,” said Jim O’Connor, director of the program for its first 18 years. ‘‘I argued how much it would cost for incarceration ... That program is cheap when you think about what incarceration would cost.” The program was started with federal and state crime prevention funds with the understanding that if it worked after three years, the county would take responsibility for the program.
‘‘These kids were tested coming and going — the results had to be there and they were,” said Milt Thomas, the project’s work and outdoor education director for its first 26 years.
The county Board of Education voted in February to close the Kingsley Wilderness Project, despite pleas from parents, alumni and the community to keep the Boyds school open.
‘‘It’s sad, I’m really sad,” Cathy Jewell, site coordinator, said at the time. ‘‘It seems like we have a tremendous resource that we’re going to just let go ... It doesn’t make sense. We spent all this time and put all this effort in — I don’t get it.”
School Superintendent Jerry D. Weast recommended closing the program and sending students to the county’s other two alternative programs or back to their home schools. He based his recommendation on declining enrollment and poor performance on tests.
‘‘When I think they’re just letting this go for a couple of bucks — they think they’re saving money on — it just galls me,” O’Connor said.
Kingsley opened in 1978 with nine students, some of whom were hardest to reach in the county, O’Connor said.
In the early years, the program accepted any student who thought he or she might benefit from it. More than 75 percent had coded learning disabilities, many with more than one disability, O’Connor said.
They also had behavioral problems and many admitted to drug use, O’Connor said.
‘‘These kids were damaged seriously in terms of feeling comfortable at regular school and were acting out,” O’Connor said.
He decided not to put academics first since the students were participating in Kingsley because they had been defeated by academics.
‘‘Kids like that, the first thing that’s needed is healing,” O’Connor said. ‘‘Once that’s done they will take an interest in academics.”
Some entered the program with the reading skills of a second-grader, Thomas said. At the end of the year they might read at a third grade level or better.
To expect Kingsley to bring those students up to grade level within a few months is unreasonable, he said. Failing to meet state testing standards that are required for high school graduation is one reason cited for closing Kingsley.
‘‘We started with finding ways to get them through a day where they were feeling better and better about themselves, then they would ask for the academics,” O’Connor said.
That’s where Thomas came in.
From the beginning, physical labor and outdoor adventures such as skiing, white water rafting and backpacking became an important component of the program. The outdoor trips were intended to encourage activities students could enjoy throughout their lives. The activities were intended to build self-esteem.
‘‘When those kids hiked up a mountain, they may be complaining on the way up, but when they got home they were proud of themselves,” Thomas said.
Several graduates have made careers as rock climbers, skateboarders and cyclists.
The school was initially located near Little Bennett Regional Park in Clarksburg, in an old house and adjacent buildings on the Moneysworth Farm. The plan was for the students to develop the undeveloped park.
Although work was a key component of the Kingsley proposal, somehow no one had budgeted money for tools that first year, Thomas said.
They borrowed tools from the park, chopped up the dead trees on the farm and sold the firewood. Chopping firewood has remained a popular Kingsley activity and continues to provide money for Kingsley tools and activities. Students earn a small salary for their work.
The first year Kingsley students cleared ballfields in the park. The second year they built tent pads at campsites, built a bridge and cleared trails.
When Black Hill Regional Park opened, Kingsley students cleaned up the area around Little Seneca Lake, planted flower gardens, laid sod and built bridges, Thomas said.
They continue to do trail maintenance at both parks, he said.
The program changed every year according to the needs of its students, O’Connor said.
Until four years ago, Kingsley staff interviewed students who wanted to be admitted to the program and made admissions decisions. The school always had at least 25 on a waiting list, Thomas said. The school can handle 27 students.
Four year ago, the county school system central office took over the admission process and enrollment began dropping.
‘‘In the 18 years I was there, there was no issue of closing it,” O’Connor said.
This year the school has 16 students.
‘‘Out of the hundreds of kids that went there I can only recall one kid who ended up incarcerated,” O’Connor said.
Last year, that former student returned to the school with his wife and mother and talked to the students about his life and the opportunity they had, Thomas said.
‘‘We were phenomenal at taking kids that would have fallen through the cracks and ended up with big success,” O’Connor said.

 http://www.gazette.net/stories/050907/germnew214601_32334.shtml