After a budget overhaul and a change in principals, Lycee Francais’ board of directors probably could have anticipated the blemished audit they received at their monthly meeting Monday.
Though many of the issues resulted from policies and procedures that, according to the audit, have since been improved, the financial analysis revealed several shortcomings, including the school’s payment — without a formal contract or board approval — of $29,878 to former Principal Jill Otis for three months after she resigned in April.
“We did not observe any documented approval or authorization for these amounts to be disbursed,” the audit states about the payments to Otis.
Otis declined comment Monday night, saying she needed to look more closely at the findings.
The audit says that the school has since “implemented a process to remove terminated employees from the payroll register.”
Todd Tournillon of Postlethwaite & Netterville, the firm completing the audit, presented the documents to board members during their regular meeting Monday night, while an audience of more than 80 people looked on.
Tournillon noted challenges in the auditing process, as the administration had been completely overhauled since the end of the fiscal year.
Including Otis’ payments, the audit also found:
The school paid for a board member’s cell phone: The school paid $627 in cell phone charges for one school board member, though no such payment was approved by the board.
Former board member Tom Klingler confirmed Tuesday that the cell phone was his, though the audit does not name him. Klingler reimbursed the school for the cell phone charges, the audit says, but the matter was referred to the Louisiana Board of Ethics.
Board members are barred by state law from receiving compensation for their service other than reimbursement for actual expenses.
Klingler told The Lens Tuesday that when he took over as board chairman in April 2011 to fill in when then-president Andrew Abrams went on medical leave, Klingler assumed use of an extra cell phone because he was regularly conducting school business by phone. He said he procrastinated to return the phone after Abrams resumed his seat.
In a June 29, 2012, letter Klingler wrote to the Office of Parental Options about the matter, he said he did not use the phone in an attempt “to gain something of economic value from the school I helped get off the ground, whose mission in which I firmly believe and to which I have made both cash and in-kind donations.”
Lack of monthly financial statements: The board did not receive any monthly financial statements prior to October. The audit said such statements should be presented in a timely manner so as to avoid errors.
Complex payroll system: The report notes payroll was only overseen by one person, the business manager. Employees did not have documentation of approved pay rates, and they were paid differently based on their work performed during each pay period, the report states. No one checked payroll timesheets for accuracy. All of these factors, the report says, led to an overly “complex” payroll system maintained by one person.
Lack of spending oversight: The business manager was the only person to oversee disbursements. Three disbursements, totalling $2,500, could not be supported by documentation, the report states. Debit card use was consistently documented, but some online, retail purchases did not have proper documented authorization, the audit says.
The school’s audit was completed Dec. 28 and sent to the state before the Dec. 31 deadline, Tournillon said.
The Lens first formally requested the audit Nov. 26, when most charters were filing their audits. The Lens, however, did not receive a copy until Monday evening at the meeting. A Jan. 8 email The Lens sent to financial director Julianne Ruocco regarding the status of the audit went unanswered.
Trying to close a budgeting gap
Ruocco, director of finance and operations, reviewed the school’s $2.8 million budget with the board Monday night.
She said $4,000 of the $10,000 spent by the school on board member training and resources from The High Bar had been reimbursed by board members.
Originally to be paid solely by board members, board president Jean Montes said at the training in October that not all members could afford it, so the school would cover the cost until members could repay it.
Ruocco reported the majority of line-items in the budget to be on track at the halfway point in the school year. She said the school was about $5,000 short on student fees paid for school materials. She also said the school was over budget in special education, mainly due to testing service costs.
“We have $1 million to make up,” board member Dan Henderson asked, “How will we do it?”
“I think it’s still possible to break even,” Ruocco said, saying some items are over budget while others are under. She said that changes in student enrollment would affect the school’s finances as well because the state adjusts its funding in February according to updated student numbers.
Development consultant Lora Reugger said that just over $15,000 in donations has been raised for this school year. Reugger said the school’s fundraising goal this year is $100,000. Thirteen percent of families had contributed so far, she said.
Ruocco said final adjustments in the audit brought the June 30, 2012 deficit to $78,853, about $7,000 less than the shortfall estimated last fall when the budget was rewritten.
Help with governance offered
In attendance at the meeting were three people recruited by state Superintendent John White to help the school find a new CEO and, they said, to review the school’s governance weaknesses.
Caroline Roemer-Shirley, executive director of the Louisiana Association of Public Charter Schools, said this was the first time her organization has attempted such a project with a charter school.
Describing her involvement with Lycee as “crisis work,” Roemer-Shirley lauded the school’s academic standing and said it appeared to be improving financially. But what caught her attention, she said, were some clear issues with governance and leadership that kept creeping into conversations at the state Board of Elementary and Secondary Education.
“What I’ve seen is a board that is taking on some roles and responsibilities that traditionally are not part of what a board should be doing,” she said.
Joining Roemer-Shirley were Raphael Gang, chief of staff at the state education department’s Office of Portfolio, and Jeremy Hunnewell of EMH, a management consulting firm, both of whom will be working with the school.
While Lycee’s board members shuttered themselves in a private room to talk about a defamation lawsuit filed recently against them by a former teacher, the three took questions from parents, teachers and others in attendance.
Parents raised concerns ranging from the school’s accreditation and board member makeup, to the board’s hiring practices and compliance with open meetings law.
Joyous Von Buskirk, one of the authors of Lycee’s charter, urged Gang for more oversight. “This is not a private-public school” said Von Buskirk, “this is a public school.”
Managing Editor for The Lens, Steve Beatty, asked the three whether Lycee’s board or the state would have to formally approve a contract or agreement to allow the groups to enter into the kind of work they said they planned to do with the school.
Roemer-Shirley said she wasn’t sure if it required a contract of some kind with Lycee, but said her organization is paying EMH, the consulting firm, through a grant.
No answer to parent group’s demands
While discussion at Monday’s meeting touched on the school’s governance and leadership issues, no one at the board table acknowledged the demands one group of parents made Friday in a detailed letter sent to board members and others, including the state Department of Education’s Office of Parental Options.
Calling themselves the Rebuilding Trust Working Group, more than a dozen parents demanded the ouster of two board members — Montes and Paige Saleun — and requested that the group’s concerns be placed on Monday night’s board agenda.
Roemer-Shirley did say during the Q&A session with parents that her private conversations with board members did indicate they have a willingness to make change, “including rolling off this board,” if warranted.
Neither Montes nor Saleun would comment afterward.
The parent group’s lawyer, Robert Rachal, spoke up during the forum stating there were a lot of upset parents, but the group wanted to resolve things “amicably.”
“We’re completely divided,” another parent said.
Nevertheless, parents seemed to be on board with Roemer-Shirley’s offer to help and a few sounded elated at her suggestion to give parents a “charter 101” sit down.
Rachal said afterward he was optimistic that many of the issues the parents raised might be addressed.
Board to hire attorney
Board members emerged from an hour-long executive session discussion of the lawsuit and approved a motion to allow Montes authority to engage the law firm Adams & Reese as counsel on behalf of the board of directors.
Jaimme Collins, an attorney for Adams & Reese was present in the executive session before the vote was taken.
The board meeting began at 6:40 p.m. and adjourned at 8:50 p.m. All seven board members were present.