Beginning this week, the proverbial closets of the Morgan Hill
School District will be thrown wide open, as a team of state
investigators begin a review of district books and operating
procedures.
Beginning this week, the proverbial closets of the Morgan Hill School District will be thrown wide open, as a team of state investigators begin a review of district books and operating procedures.
This is the second of two audits in the space of a year for the MHSD: First, an annual audit by a firm of CPAs, and now a high-powered audit by a state agency known as FCMAT created to help schools by providing financial advice and management assistance. We join the School Board trustees and Superintendent Carolyn McKennan in welcoming the opportunity to have an unbiased look at the state of the district.
FCMAT, short for Fiscal Crisis and Management Assistance Team, is the agency responsible for reviews of Hayward and Oakland school districts. The districts are now under state supervision.
The FCMAT team arrived in Morgan Hill on Monday. According to Santa Clara County Superintendent Colleen Wilcox, she requested the team come in and review the district, rather than the Santa Clara County Office of Education conducting an audit itself.
To us that indicates the seriousness of the situation.
The team will not only look at the district books, it will visit school sites, talk with teachers and classified employees. The point of the audit is to not only get a clear picture of district finances, but also a clear picture of district operations as a whole.
Symptoms of the state of the dysfunction the district is suffering from will act as predictors for the team to take action. What action will be determined by the severity of these symptoms.
While there are positive things happening in the schools in our district that will be identified by the FCMAT team, we believe the team will quickly spot some of the more noticeable symptoms of the dysfunction, symptoms that they list as “predictors,” including a neglect of deferred maintenance, encroachment on the general fund, litigation against the district and morale problems.
Considering the financial aspect of the FCMAT review, we also have some predictors that will give us an idea of how this will go. The predictors come from the first audit of the year, an audit by the CPA firm of Goodell, Porter and Fredricks. In their report, dated June 30, auditors indicated several serious problems, including: the budget did not reflect actual operations, there were unbudgeted expenditures and district reserves dropping below the state-required 3 percent of the general fund.
Auditor John Goodell did tell trustees that the district has a “strong financial management team,” and that if that was not the case, he would be “very concerned” about the situation of the district. But, he said, he believes “the district can improve.”
We want to believe that, as a result of these two audits, the district can improve, can come out stronger than before. But there must be changes in order for this to occur.
The district must institute transparent procedures, increased financial oversight and improve communication.
Above all, trustees must demand accountability, must ask hard questions, must be kept abreast of the financial and other situations. If we are to make this a one-time, positive outcome event, it is imperative that trustees institute change.
Board members must demand answers from top district administrators about the fiscal audit – answers they can share with the community.
We look forward to the report from the FCMAT team now in the district.
