Acting St. Mary’s County Superintendent of Schools Scott Smith
Leonardtown, MD –– Several St. Mary’s County commissioners have called for a “forensic audit” of the books of the St. Mary’s County Public Schools (SMCPS). According to EHow, a legal website, “A forensic accountant examines the company’s books for evidence of fraud, as well as inspects the accounting system for weaknesses that could enable someone to defraud the company.”
The school board has an annual audit performed by its accounting firm. That audit by McGladrey, LLP, a multi-office, nationwide firm, was released Wednesday. According to Assistant Superintendent of Fiscal Services and human Resources Tammy McCourt, “The auditors have expressed an opinion that the financial statements of the SMCPS fairly represent the financial condition of the school system.
The audit’s release brought a reaction from several school board members about the call for the forensic audit. Although there was no vote taken, the opinion was clear that the majority of the board members didn’t think such an audit was necessary.
The board and former superintendent Dr. Michael Martirano came under fire earlier this year when a more than $6 million shortfall in health care costs was uncovered along with more than $1.5 million in other costs. The school system has since made up the shortfall with personnel and program cuts along with a raid of the system’s budget reserve.
School board member Cathy Allen said of the situation, “The board made a decision that turned out not to be the smartest of moves.” She was referring to the decision before the beginning of Fiscal Year 2014 to change the method of budgeting for health care costs. The school board has since switched back to the old “Modified Retrospective: method in which Blue Cross Blue Shield estimates the yearly cost, which is budgeted, and account is reconciled at the end of each year.
Allen noted the clear report in the audit they just received. She said to do a forensic audit would be very expensive and take away from monies that could be applied to the classroom. Acting Superintendent Scott Smith said the school board wanted to be transparent, but added, “I don’t want to sacrifice something from the child.”
Allen said if the commissioners wanted a forensic audit then they could pay for it themselves.
Board member Mary Washington noted the audit’s caution about a future that includes declining state revenues, an increasing retiree health care liability, increasing health care costs and the push down of teacher pension costs from the state to the county, “The future does not look bright for us. We will have to come up with additional funding to keep up our highly functioning school system,” Washington said.
Board Vice President Brooke Matthews noted that the new audit included more detail than previous ones. McCourt said that detail was more in the auditing of federal programs, which were not the focus of the budget shortfall.
Board President Dr. Sal Raspa observed that the internal audit process was ongoing throughout the year. McCourt said the annual audit was sent to the county commissioners but the internal ones were just posted on the system’s website. Washington suggested that all of the audits be forwarded to the commissioners and Smith agreed.
Raspa, who is retiring at the end of the year, said “The kids keep coming,” and costs for the school system thus keep increasing. “It takes funding,” Raspa insisted, adding that the community needs to advocate for the school system.
Although she did not support a forensic audit, board member Marilyn Crosby did question what happened with the budget, saying she didn’t understand how the deficit could have happened so quickly. She said McCourt’s predecessor Greg Nourse told her, “The bills just came in.”
Crosby also wondered how the school system could dig itself out of the budget hole so quickly. McCourt pointed out that just about all of the school system’s fund balance was used for that. The audit noted that depleted shortfall of just $480,000 as one of the school system’s fiscal challenges.
Crosby said she was concerned that future fiscal austerity would impact the system’s successful various “Pathways.” Observing that students are bused to the three STEM schools at a cost, she said maybe it was time to consider STEM programs in all schools.
Copies of the bulky audit document will be forwarded to the commissioners and copies will be available for perusal by citizens at the public libraries.