Wednesday, January 17, 2007

Poor Management Costs Our Kids

This boils my blood. It appears the Weber School Foundation is missing some cash — maybe a lot. (My kids attend schools in the Weber County School District.) Some radio stations are reporting that as much as $800,000 could be missing. The above referenced article says that the Sherriff’s Department has an embezzlement investigation underway and will have results in about three weeks.

The school foundation is a non-profit organization that exists solely to promote the aims of the school district. It would be disingenuous to claim that it is autonomous from the school district. Its offices are co-located with the school district. It essentially exists to provide the school district with an arm to raise funds outside of regular state funding. The foundation does some wonderful things. It helps fund science fairs, devices for special needs students, scientific equipment, band equipment, field trips, etc.

Right now I have two kids deeply involved in a high school robotics club that is in the thick of developing an entry for the U.S. FIRST Robotics Competition that will be held in Las Vegas in March. The competition gives students with a variety of skills the opportunity to use math, science, technical, and even artistic skills together in a simulation of a real world project so that they can appreciate why they need these skills in life. “The FIRST Robotics Competition challenges teams of young people and their mentors to solve a common problem in a six-week timeframe using a standard "kit of parts" and a common set of rules.”

“In this year’s game, “Rack ‘N’ Roll,” students’ robots are designed to hang inflated colored tubes on pegs configured in rows and columns on a 10-foot high center “rack” structure. Extra points are scored by robots being in their home zone and lifted more than 4” off the floor by another robot before the end of the 2 minute and 15 second match.”

But it’s expensive. It costs about $15,000 to completely fund a team in the competition from start to finish. While a number of donors (including engineering societies, government programs, and tech companies) have stepped up, my sons’ team still needs more cash. They would love to get some funding from the Weber School Foundation, but that will not happen, thanks to some greedy jerk.

This all comes down to failure to develop financial systems with proper checks and balances. I had a career as an auditor once upon a time, so I understand the auditor mentality. Auditors want separation of duties. They want levels of approval for financial transactions. They want rules that prevent skimming. The rules auditors want often seem like a pain in the tail. It seems like they don’t want anyone to trust anyone else. Some of the rules auditors want seem severe, but they are designed to keep the honest person honest and to keep the dishonest person from stealing.

$800K doesn’t just get up and walk away. What we have here is a case of sloppy administration. And apparently this is not a rarity for Northern Utah school districts. A Layton couple is currently under a grand jury indictment for bilking the Davis County School District out of $4.2 million. This was all made possible by deplorable administration of public funds.

Due to Utah’s demographics, public educators will be able to constantly cry about being under funded for at least the next century (and probably beyond that). But this educational poverty wailing comes across as a little crass when educators lose hundreds of thousands and millions of dollars due to slipshod administrative practices. And all this while one of the greatest growth areas of Utah’s school districts over the past four decades has been at the district administration level. Bureaucratic growth often causes focus to shift to the wrong things.

The ironic thing about these kinds of losses is that educators will likely point to them as examples of need for even more administrative funding. “This wouldn’t have happened if we had enough money to do proper oversight,” they will say. The fact is that effective financial oversight doesn’t have to be expensive. It just requires administrators that are sticklers about the rules. In the long run, this is far less expensive than shoddy oversight.

But having been an auditor, I also have to wonder where the state auditors were in both of these cases. It seems like they were asleep at the wheel as well. Come on, folks. We pay enough for government already. We must demand that our government entities handle their finances properly.

None of this is rocket science. I learned most of these rules in the first few weeks that I worked at a bank when I was 21-years-old. Surely the highly educated administrators of our educational industrial complex can learn these basic rules with a little training. Oy!


Reach Upward said...

They are now saying it was $900K (see here). A secretary that had been employed by the foundation for 11 years is under investigation. The foundation has $1.3 million in assets. That means that this former employee stole the equivalent of 69% of the foundation's assets.

One foundation board member said, "We are reviewing policies. We are looking into our past audits." Well, I should darn sure hope so!

rank and file teacher said...

This and the other incidence had better lead to greater oversite of things or I won't be too happy.