Board of Ed Discusses Transparency, Request to Bring Back Auditor

by The Village Green
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 Updated March 13, 2014, so as not to indicate that Board member Jeff Bennett changed his mind about bringing the auditor back. Bennett merely wanted information from the auditor’s report.

The South Orange-Maplewood Board of Education Budget Workshop on March 4 took an interesting 20-minute detour to tackle the question of transparency and whether or not the accountant who performed the district’s audit should return for questioning.

Board member Johanna Wright said she wanted to invite the auditor back, saying that she had asked him after his December Board of Education appearance if he would be willing to come back on a pro bono basis to answer any additional questions during the budget process. She reported that the auditor said that he would. Wright said she was interested in the auditor’s viewpoint on how the district could save money.

Board member Beth Daugherty countered, “I don’t know that that’s the auditor’s role.” Daugherty said that the auditor “looks for fidelity to the way that the district is supposed to be run” and “accurate record keeping” but does not “look for where you can save money. I don’t think he would be able to answer the questions that you want to ask.”

Wright quickly retorted, “You don’t know what I want to ask.”

Board member Stephanie Lawson-Muhammad said that as a member of the Finance Facilities and Technology (FFT) Committee, “I would hope that if there were questions for the auditor that we could have asked them at the time or asked them in committee.” She said she was “confused as to why we’d need to wait …. Waiting ’til next week (another budget workshop is scheduled for March 12 at 7:30 p.m.) is almost too late. I would suggest that if there are questions, we document those to share with the auditor as soon as possible or to even determine if they are something that Ms. (Cheryl) Schneider (the SOMSD Business Administrator) and her team can answer.”

Board member Jeff Bennett said that he was interested in finding out “if we had to pay for retiree benefits what would the cost be.” He said that he was “hoping other board members would agree that this is something we should know because there is pending legislation.”

At this point Board President Wayne Eastman said he wanted to get a head count on how many board members wanted the auditor back (a suggestion originally made by Daugherty). Eastman said, “Some might say that an auditor is someone who knows about accounting practices not policy …. Others say, ‘What’s the harm?'”

Schneider offered some further background. She agreed with Wright that the auditor said he would come back, saying she remembered that “there was a question about Montrose.” However, she noted that the auditor’s answer at the time was “that he does not do an analysis of how we are spending the money.” Schneider said that, while the auditor could help with questions about how pensions work, he probably would not be able to answer questions about “how we are spending the money … unless you want to pay him to do an analysis.”

In addition, Schneider assured the Board, “We can get you those numbers in terms of the pension. That is in the audit.” She added that the “reform that is being suggested and that is being analyzed right now is changing a lot of things. It’s changing the way that pension are done. It’s changing the way health benefits are done. It’s looking at the fact that health benefits would be less of an offering, that the district would have savings in health benefits that would offset the cost of the pension. There’s s lot of different things that are in that reform that I don’t know that I could tell you what the ramifications would be at the end of the day.”

Wright said, “I’m really surprised that people have an issue with the auditor coming back at no charge. Transparency is very, very important to me.”

But Board member Donna Smith asked Wright, “What exactly do you want the auditor to do? At this point I don’t see any reason to bring him back.”

Wright responded, “I’ll probably have some questions to ask about different lines in the budget and some other things, and I don’t see that it’s a big deal unless somebody is trying to hide something…. I remember the auditor coming a few years ago and he sat at that table and said that we had too much money and we didn’t listen… and the state came in and took that money.” (Wright was referring to the State of New Jersey’s move in 2010 to close a budget gap by requiring that districts use their surplus funds in lieu of state aid.)

Madhu Pai said she was “happy to do whatever we need to do to resolve [the auditor] issue.”

Board member Elizabeth Baker said that, while she supported getting the costing of the pension and retirement health benefit issues that have been raised, “I don’t know that we need the auditor to do that. At this point, I’m leaning against it.”

Bennett said, “I don’t think that we need to have the auditor back. I’m sorry. I don’t think he analyzes the budget in that way.” Bennett noted, “Every time we get audited we don’t have a dime in the wrong place.”

Lawson-Muhammad said that if the Board had specific question, “Let’s get them and maybe we can answer them internally.”

Pai added, “Personally, I don’t see any need. I’m all for process, but let’s not get in the way. If Ms. Wright has questions, can’t we just facilitate her getting them answered?”

Wright said, “I repeat. I have asked for information and have not been able to receive it after going over things over an over again. I can ask information from the auditor and have been able to get it. I can’t get the info from the administration. Mr. Eastman can tell you. And the state says that I can have it. I’ve even had board members say that I can’t have information… if that’s a problem (bringing the auditor back) what does that say about transparency?

“Lots of people voted for me to be in this spot,” said Wright. “My questions have not been answered.”

(In a follow up conversation, Wright said that she had made an Open Public Records Request from the district on March 21, 2014 for several years of back audits. Schneider confirmed that Wright had received the information and signed off on it. In another followup, Wright confirmed Schneider’s report; however, Wright said that her point was to question why she needed to make an OPRA request in the first place. Wright also expressed the desire to have the auditor return to answer questions that the public might have.)

Lawson-Muhammad said that perhaps the issue was that Wright was asking not just for data but for the administration to do additional analyses.

“When we ask the administration to go off and analyze data that is a board action,” said Lawson-Muhammad, citing analyses regarding Montrose School and enrollment. In those instances, she said that FFT brought the issues to the board for approval. “Some of the areas of concern that you have raised about special needs and around Montrose, we have discussed those in committees … about this is we want to accomplish … and this is the goal…. So there is a commitment,” said Lawson-Muhammad. “However, the timing of that aligned with what we are doing now — the focus on this budget — it was not aligned that this was something we’d be doing right this minute, because at this minute we are focused on the budget and those questions were not going to impact the budget as it stood.” She added, “We are committed to having those discussions, to digging into those issues that you have raised.”

Wright questioned this answer, saying she had asked last year that the budget process begin sooner. “Now we don’t have time.” She added, “If I ask for a photocopy … I have the right to have that information. And I’d like to see the resolution … that says that a board member can be denied information from another board member which supersedes what the state says? Do we have that resolution?”

“I’m not aware of it,” said District In-House Counsel Phillip Stern.

Lawson-Muhammad countered that “our budget process is not rushed,” saying that it started in November. “When state aid hits that’s when the hard work comes into play.”

Wright contended that the South Orange-Maplewood Board of Eduction only holds two [budget workshop] meetings as compared to some other towns which, she said, have four or five.

(The Village Green is currently checking with other districts: Millburn does not hold workshops but has discussed the budget at every meeting since January 12, according to Millburn Schools Communications Coordinator Nancy Dries. It should be noted that Millburn’s Board of Education meets twice a month while South Orange-Maplewood meets once per month. Millburn’s Preliminary Budget will be presented for approval for submission to the County Superintendent on March 16 at a special meeting. The public hearing on the Millburn schools budget is tentatively scheduled for April 27.)

Ultimately, the Board decided not to bring back the auditor. Eastman said he was open to the idea, but added, “The board has expressed itself. It’s time to move on.”

This article is not a full transcription of the conversation. For more, watch the video here. The auditor conversation begins approximately 1 hour and 20 minutes into the video and ends shortly after 1:40.

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