McHenry County Blog

Compliance with Huntley School Board policies is apparently for students, not Huntley’s fiscal administrators.

School Board member Larry Snow along with board member Aileen Seedorf got a board policy (4:15) put on the books that says financial irregularities have to be reported to the board of education and to the superintendent.

It was obvious at last Thursday’s Board meeting that compliance with that mandate remains but a theoretical concept.

Not something actually practiced.

Mandatory disclosure missing even when written into board policy is obviously not being practiced four years after the scandalously referendum tax increase that the media labeled a deception.

Hardly progress if you ask me.

Superintendent John Burkey has been on the job three years. Obviously, the fiscal aspect of his supervision needs improvement.

And, not telling the board of a serious lapse in internal controls…how does one explain that.

Did the district’s outside auditor voluntarily disclose how he found a lapse in internal controls at the beginning of his presentation?

No.

In fact he made no presentation. Outside auditor Paul Thurman of the firm Evans, Marshall & Pease, P.C., simply said he didn’t have anything to say and immediately opened it up to questions.

The lapse in internal controls that had about $150,000 extra erroneously sent to the State (in July alone) wasn’t mentioned until Larry Snow started asking questions about internal controls in the fiscal office.

The written report the auditor gave the board made had no mention whatsoever about internal controls.

It was only after Snow had asked very precisely worded questions exposing errors in the audit report that Snow asked about what he found about “internal controls.”
At this point, the auditor said a future letter, as yet unwritten, would show a lapse in internal controls resulting in about a couple hundred thousand dollars being sent to the State as an overpayment error.

Whether the auditor would have routinely disclosed this to the board, as he said he was going to, is anyone’s guess.

It was apparent he didn’t disclose it before being questioned by the board Thursday night. It is certainly less likely that someone would ask a question, if nothing was volunteered about internal controls.

Four years after a deceptive referendum, you might think the board majority was actually going to start the practice of having the fiscal office and superintendent actually start telling the entire board of education about specific lapses in internal controls.

Guess not.

About $110,000 was spent under a guise of a forensic audit that was selectively unforensic.

Part 2 tomorrow.

Where?

You won’t be surprised to find out this is about Huntley School District 158.

Those were the numbers that were talked about as errors as a result of the 2007 audit.

If you think an audit reassures residents that a school district financial numbers are officially correct, think again.

First, if you were a resident who actually went to the meeting, thinking you would get a copy of the auditor’s report so you could read along with the questions being asked by board members, largely by school board member Larry Snow, think again.

No copies of the report were available to the public.

Not online.

Not in person.

No where.

So much for transparency.

Expenses were incorrectly shown in the 2007 audit, admitted to as an error by Paul Thurman who represented the audit firm of Evans, Marshall & Pease, P.C. I assume he is a Certified Public Accountant.

Add to this property tax revenue of $600,246–inflated–and registration fees that didn’t belong in 2007, this added up to $1,531,406.

How much in registration fees didn’t belong in 2007?

Well, that would be $641,478.

That’s a lot of registration fees.

There were a couple of more “stunners,” starting with the first question asked by Snow.

It turns out the Auditor had over $10 million on the books as “Construction in Progress.”

Snow asked how this could be when the Marlowe school expansion has been done for well over a year?

This is the second school year the expansion is actually being used.

Huntley administrators said the school was done.

The auditor said he had documentation from someone saying it wasn’t, but didn’t have it with him.

Superintendent John Burkey looked rather perturbed.

Probably because no one on his staff reviewed the auditor’s report between Friday when they got it and the following Thursday, the night of the board meeting.

Snow asked the auditor about internal controls and what he found.

The auditor said he found the district overpaid the state more than $150,000 in July for the Teachers Retirement System.

This happened when the payroll supervisor miscalculated the amount to be paid, and apparently just sent it in. No one in the District knew there was an overpayment until the auditor caught it.

One person doing this with no approval process or anyone checking the work, I would say this qualifies as an internal controls’ violation.

Then the auditor said the same thing happened in June as well. That time it was apparently only $75,000 that was overpaid.

When Snow asked whether the auditor used the internal controls assessment done by former Comptroller Stacie Talbert, Thurman was very clear.

The outside auditor said he had never seen the report or been given a copy.

Talbert’s December 2007 report was a scathing evaluation. Obviously Huntley administrators didn’t want the audit firm to be looking too closely at what hadn’t been corrected.

Board member Aileen Seedorf asked if this is November and the overpayments were discovered in August, then why is this being brought to light only at a public meeting now?

Good question.

Is there a conspiracy of silence still going on in District 158?

You betcha and it was obvious how administrators were caught “knowing,” but not telling. Members of the board majority would not have deliberately withheld that information, would they?

Why would you inflate the financial results in a year you are negotiating a teachers’ contract?

I believe Snow expressed less than a thank you when he said the auditor made negotiating the contract more difficult not less difficult with fund balances inflated by $1.5 million

Part 2 tomorrow.

= = = = =
At the top you can see teachers, including one shy one, picketing in front of Marlowe Elementary School.

Where?

You won’t be surprised to find out this is about Huntley School District 158.

Those were the numbers that were talked about as errors as a result of the 2007 audit.

If you think an audit reassures residents that a school district financial numbers are officially correct, think again.

First, if you were a resident who actually went to the meeting, thinking you would get a copy of the auditor’s report so you could read along with the questions being asked by board members, largely by school board member Larry Snow, think again.

No copies of the report were available to the public.

Not online.

Not in person.

No where.

So much for transparency.

Expenses were incorrectly shown in the 2007 audit, admitted to as an error by Paul Thurman who represented the audit firm of Evans, Marshall & Pease, P.C. I assume he is a Certified Public Accountant.

Add to this property tax revenue of $600,246–inflated–and registration fees that didn’t belong in 2007, this added up to $1,531,406.

How much in registration fees didn’t belong in 2007?

Well, that would be $641,478.

That’s a lot of registration fees.

There were a couple of more “stunners,” starting with the first question asked by Snow.

It turns out the Auditor had over $10 million on the books as “Construction in Progress.”

Snow asked how this could be when the Marlowe school expansion has been done for well over a year?

This is the second school year the expansion is actually being used.

Huntley administrators said the school was done.

The auditor said he had documentation from someone saying it wasn’t, but didn’t have it with him.

Superintendent John Burkey looked rather perturbed.

Probably because no one on his staff reviewed the auditor’s report between Friday when they got it and the following Thursday, the night of the board meeting.

Snow asked the auditor about internal controls and what he found.

The auditor said he found the district overpaid the state more than $150,000 in July for the Teachers Retirement System.

This happened when the payroll supervisor miscalculated the amount to be paid, and apparently just sent it in. No one in the District knew there was an overpayment until the auditor caught it.

One person doing this with no approval process or anyone checking the work, I would say this qualifies as an internal controls’ violation.

Then the auditor said the same thing happened in June as well. That time it was apparently only $75,000 that was overpaid.

When Snow asked whether the auditor used the internal controls assessment done by former Comptroller Stacie Talbert, Thurman was very clear.

The outside auditor said he had never seen the report or been given a copy.

Talbert’s December 2007 report was a scathing evaluation. Obviously Huntley administrators didn’t want the audit firm to be looking too closely at what hadn’t been corrected.

Board member Aileen Seedorf asked if this is November and the overpayments were discovered in August, then why is this being brought to light only at a public meeting now?

Good question.

Is there a conspiracy of silence still going on in District 158?

You betcha and it was obvious how administrators were caught “knowing,” but not telling. Members of the board majority would not have deliberately withheld that information, would they?

Why would you inflate the financial results in a year you are negotiating a teachers’ contract?

I believe Snow expressed less than a thank you when he said the auditor made negotiating the contract more difficult not less difficult with fund balances inflated by $1.5 million

Part 2 tomorrow.

= = = = =
At the top you can see teachers, including one shy one, picketing in front of Marlowe Elementary School.

This past winter, Glen Stewart, then-Chief Operating Officer and, before getting that over $100,000 a year job, a member of the Huntley School District 158 Board majority, wanted to extend the $2 million per year contract of the guys doing the janitorial work without going out for bids.

Superintendent John Burkey backed him up. The guy who gets paid close to $100,000 and is in charge of building and grounds was against bidding, too.

“The board pushed to rebid it, and that was a good move,” Burkey told Northwest Herald reporter Tom Musick

I pointed out that $2 million amounted to 5% of the school district’s operating budget. Even more, if utilities were excluded.

That was right after newly-appointed and now departed Chief Financial Officer Stacie Talbert has concluded–in writing yet!–

Taxpayers were fortunate to have watchdogs Larry Snow and Aileen Seedorf on deck.

I pointed out that I had prepared bid specs for the purchase of natural gas from the wellhead for state government in the mid-1980’s. We went out for bid and saved the state taxpayers $1 million a year.

So, the “we don’t have to go out for bid” approach by school board majority buddy Stewart made no sense to me.

It didn’t make sense to the school district’s Financial Advisory Committee either.

Kim Sjaka even took the recommendation to go out for bid off the board’s consent agenda. Skaja publicly told the board that it would cost more money (than current provider GCA’s offer to renew for more than $2 million a year), if the District went out to bid.

Good sense prevailed and the Huntley School District went out for bid on custodial services.

Well, the results are in and the district stands to save almost 3/4 of $1 million over the next three years because Snow and Seedorf didn’t let Stewart get away with just renewing the contract.

Stewart is no longer an employee of District 158.

This past winter, Glen Stewart, then-Chief Operating Officer and, before getting that over $100,000 a year job, a member of the Huntley School District 158 Board majority, wanted to extend the $2 million per year contract of the guys doing the janitorial work without going out for bids.

Superintendent John Burkey backed him up. The guy who gets paid close to $100,000 and is in charge of building and grounds was against bidding, too.

“The board pushed to rebid it, and that was a good move,” Burkey told Northwest Herald reporter Tom Musick

I pointed out that $2 million amounted to 5% of the school district’s operating budget. Even more, if utilities were excluded.

That was right after newly-appointed and now departed Chief Financial Officer Stacie Talbert has concluded–in writing yet!–

Taxpayers were fortunate to have watchdogs Larry Snow and Aileen Seedorf on deck.

I pointed out that I had prepared bid specs for the purchase of natural gas from the wellhead for state government in the mid-1980’s. We went out for bid and saved the state taxpayers $1 million a year.

So, the “we don’t have to go out for bid” approach by school board majority buddy Stewart made no sense to me.

It didn’t make sense to the school district’s Financial Advisory Committee either.

Kim Sjaka even took the recommendation to go out for bid off the board’s consent agenda. Skaja publicly told the board that it would cost more money (than current provider GCA’s offer to renew for more than $2 million a year), if the District went out to bid.

Good sense prevailed and the Huntley School District went out for bid on custodial services.

Well, the results are in and the district stands to save almost 3/4 of $1 million over the next three years because Snow and Seedorf didn’t let Stewart get away with just renewing the contract.

Stewart is no longer an employee of District 158.

Aileen Seedorf and Larry Snow, the two minority members of Huntley District 158 School Board continue to call for the janitorial contract to be put out for bid.

And, last Thursday night, they seem to have won the battle.

I first wrote about this $2 million contract a month and a half ago.

If you haven’t read the story and are interested in how the largest employer in Huntley could have blithely ignored the possibility that another firm might save the district some money on a contract that amounts to about 5% of the non-salary operating budget, take a look.

It’s the largest contract outside of health insurance.

The school administration saw no need for competitive bidding.

The contract is administered by Glenn Stewart, Chief Operating Officer and school board member until he was appointed by the board majority to the over $100,000 a year job.

Just extend the contract beyond the third year.

That was the recommendation.

But, the Financial Advisory Committee (separate from the Finance Committee) agreed with Seedorf and Snow.

The Building Committee agreed, so going out to bid got put on the board’s consent agenda.

Snow pointed out that the District could go out to bid and depending on the results,the board exercise an option to extend the current contract.

At the last board meeting, Stewart and the administration were overruled. But not before board member Kim Skaja took the issue off the consent agenda.

But her motion to not go out to bid was defeated 5 -1. Mike Skala was absent.

Aileen Seedorf and Larry Snow, the two minority members of Huntley District 158 School Board continue to call for the janitorial contract to be put out for bid.

And, last Thursday night, they seem to have won the battle.

I first wrote about this $2 million contract a month and a half ago.

If you haven’t read the story and are interested in how the largest employer in Huntley could have blithely ignored the possibility that another firm might save the district some money on a contract that amounts to about 5% of the non-salary operating budget, take a look.

It’s the largest contract outside of health insurance.

The school administration saw no need for competitive bidding.

The contract is administered by Glenn Stewart, Chief Operating Officer and school board member until he was appointed by the board majority to the over $100,000 a year job.

Just extend the contract beyond the third year.

That was the recommendation.

But, the Financial Advisory Committee (separate from the Finance Committee) agreed with Seedorf and Snow.

The Building Committee agreed, so going out to bid got put on the board’s consent agenda.

Snow pointed out that the District could go out to bid and depending on the results,the board exercise an option to extend the current contract.

At the last board meeting, Stewart and the administration were overruled. But not before board member Kim Skaja took the issue off the consent agenda.

But her motion to not go out to bid was defeated 5 -1. Mike Skala was absent.

Don’t blink, because it’s about to disappear with hardly a trace.

The agenda for Thursday’s meeting of Huntley School District 158 came out late yesterday. Included is this item on the agenda for action:

“Resolution to Close the Forensic Audit / Roll Call”

One would think that with a board policy that “appropriate data and background information”shall be distributed to the board 48 hours ahead of time, there would be information in the “board packet” that board members receive ahead of time.

Here is the only information sent to the entire District 158 board:

“Background and Recommendation

“The following is a summary report on the Forensic Audit and associated investigations, as well as a resolution to declare the Forensic Audit and associated investigations complete.”

That’s it. That the only information the entire board received 48 hours ahead of time regarding closing out the forensic audit.

No report.

No resolution.

This is the audit that Larry Snow had to drag the board, kicking and screaming, so to speak to conduct.

This is the audit that were auditors Jefferson Wells sucked up $100,000 and found huge illegitimate fringe benefits granted to administrators by administrators.

The auditor also verified that a former payroll clerk’s actions were worthy of sending to the state’s attorney’s office. And some records were sent, although it has not been confirmed that the crucial check allegedly signed by the payroll clerk to herself made it to the state’s attorney’s office.

Well, the public was warned.

Board President Mike Skala told the Daily Herald he doesn’t want a forensic audit that would concentrate on impropriety. He “prefers a special audit to focus would be on where the money was spent, rather than possible impropriety,” according to the paper.

That was even though outside auditor Tim Cole warned right out loud,

“I just want you to know that people could easily be stealing money from the district.”

The board majority enacted new rules, allegedly enacted to make board meetings “more business like.”

Sure.

Current Board Chairman Shawn Green and the board majority obviously don’t want board members Larry Snow and Aileen Seedorf to have sufficient time to pour over whatever is in the report and the wording of the resolution.

Don’t blink, because it’s about to disappear with hardly a trace.

The agenda for Thursday’s meeting of Huntley School District 158 came out late yesterday. Included is this item on the agenda for action:

“Resolution to Close the Forensic Audit / Roll Call”

One would think that with a board policy that “appropriate data and background information”shall be distributed to the board 48 hours ahead of time, there would be information in the “board packet” that board members receive ahead of time.

Here is the only information sent to the entire District 158 board:

“Background and Recommendation

“The following is a summary report on the Forensic Audit and associated investigations, as well as a resolution to declare the Forensic Audit and associated investigations complete.”

That’s it. That the only information the entire board received 48 hours ahead of time regarding closing out the forensic audit.

No report.

No resolution.

This is the audit that Larry Snow had to drag the board, kicking and screaming, so to speak to conduct.

This is the audit that were auditors Jefferson Wells sucked up $100,000 and found huge illegitimate fringe benefits granted to administrators by administrators.

The auditor also verified that a former payroll clerk’s actions were worthy of sending to the state’s attorney’s office. And some records were sent, although it has not been confirmed that the crucial check allegedly signed by the payroll clerk to herself made it to the state’s attorney’s office.

Well, the public was warned.

Board President Mike Skala told the Daily Herald he doesn’t want a forensic audit that would concentrate on impropriety. He “prefers a special audit to focus would be on where the money was spent, rather than possible impropriety,” according to the paper.

That was even though outside auditor Tim Cole warned right out loud,

“I just want you to know that people could easily be stealing money from the district.”

The board majority enacted new rules, allegedly enacted to make board meetings “more business like.”

Sure.

Current Board Chairman Shawn Green and the board majority obviously don’t want board members Larry Snow and Aileen Seedorf to have sufficient time to pour over whatever is in the report and the wording of the resolution.

Readership is typically down during holiday periods, but it appears as if at least one reporter took a look on Monday.

That was the day McHenry County Blog revealed the United States Post Office’s investigation of the Huntley School District.

The source?

An answer from a McHenry County Blog Freedom of Information request.

So, what’s it all about?

The Daily Herald’s Jameel Naqvi reports that

“according to school board Vice President Tony Quagliano, (the complaint) alleges District 158 sent voters intentionally misleading information in a district newsletter before the 2004 referendum.”

So, not only was the B.E.S.T. tax hike political action committee sending out false information, but the school district itself was as well.

A Crystal Lake High School District 155 school superintendent, one whom I respected, came this/close to losing his pension for similar use of school resources in support of a referendum.

The news article reports that district officials say a former superintendent was named in a complaint, but won’t fess up who it was.

Not too tough a mystery to unravel.

“Officials would not reveal who was named, but the alleged activity occurred sometime before (Steve) Swanson left the district and after his interim successor, Robert Hammon, was hired,” Naqvi reported.

Steve Swanson was superintendent from 2001 until he and then-finance officer Paul Halverson resigned in 2005, after public outcry over misinformation distributed as part of the referendum campaign.

The blatantly false campaign information led to

• the election of Larry Snow,
• the re-working of tax cap legislation, in which Larry Snow and Tony Quagliano provided their expertise, to prevent similar lie-based referendum campaigns in the future and, subsequently, and
• the election of a second reform-minded inquiring citizen—Aileen Seedorf—to the Huntley school board.

This led to a blow-back by organizers and active participants in the B.E.S.T. referendum effort at a recent Huntley School Board meeting. The resignations of Snow and Seedorf were demanded. In addition, millionaire Michael Leucht ran a full-page ad in the Northwest Herald calling for two board members to resign.

No reason to let financial impropriety or mail fraud to get in the way of a fight to retain total control over a malfunctioning local government, I guess.