Supt. / CFO’s Explanation on Auditors Findings need clarification

Hopefully if the School Committee meets tonight they will look at the finding of the outside Auditors and ask for a better, more clear clarification of the administrations response. Will a Committee member ask or will they just shrug and say thanks and okay which has been the case with this committee?

Auditor’s Comment
The Lowell Public Schools receive significant federal education grant funds. We noted during 2016 that the City returned approximately $508 thousand of federal funds that were not spent during the grant year to the Department of Elementary and Secondary Education.

Management Response:
The $508,000 given back to the Department of Elementary and Secondary Education was carried over to the next fiscal year and expended on the special education summer school program. This has been a practice that has been in place for many years at Lowell Public Schools and other districts nationwide. The grant was from IDEA (Individual Disability Education Act) 240. Next year the IDEA 240 grant will be a 2 year grant. Therefore, the districts will be given the opportunity to move funds from one year to the next without having to return the funds.

First off if you return something by definition it means to give, put, or send (something) back to a place or person.

So how then did the School Dept. return it but then according to this report carried it over?

That make NO sense. Where is it shown that is was allowed to be carried over after the Auditors determined it was returned?

In addition in the Budget presentation to the School Committee last May shows money allocated for Summer 2016 which shows a $300,000 figure so where does the $508,00 come into play?

I believe this is the 240 grant for this 2016/2017 school year. Where does that $508,000 fit in? No mention of any being carried over or returned.

In addition look at the response given to the School Committee on my favorite $1,00,000 transfer last June!

Auditor’s comments:
“The School Department transferred approximately $1.0 million from the Milk and Lunch
revolving fund to account for indirect charges originally charged to the general fund budget. Normally any indirect charge transfers anticipated are incorporated as part of the formal budget process. This gives the City Council all necessary information to make an informed decision regarding the approval of appropriations. In this case, the $1.0 million transfer was not approved in the formal budget. This is significant because had the transfer been part of the budget the City Council may have reduced the School’s appropriation request by the amount of the anticipated indirect cost transfer. The Transfer was determined after year end and had the impact of increasing the School’s available appropriation by the $1.0 million charged to the Milk and
Lunch revolving fund”.

Management Response:
For 2016-17 the indirect transfer amounts from the Milk and Lunch revolving fund was included as part of the approved budget.

Really that is your only response? We did it this year correctly? Where in the budget does it show that? This was your presentation in the 2016/2017 budget but I don’t see any charge back under grant funded positions. So where and when was it done for this year?

Approved_FY17_Budget_-_ Grant funded

Last year in June the Supt. / CFO charged for Reimburse Admin indirect costs For 2015-16 $243,438 which included $80,000 of his salary along with large amounts of the HR Directors and CFO’s salary. Which he corrected in September

Where is the indirect transfer amounts from the Milk and Lunch revolving funds in this years 2016/2017 budget?

Attached are the two 2017 grant reports from the School Committee Packet supplied in this week’s on-line report. Now remember this was asked for in June and again in October but just given to the School Committee this week.

2017 approved

2017 Grant Report