Sunday, June 29, 2014

Press-Tribune Analysis of Nampa School Budget Mess: 'Auditors Don't Come In and Test Your Budget'

Posted By on Sun, Jun 29, 2014 at 1:00 PM

A report in this morning's Idaho Press-Tribune has a sobering warning for those who recall the 2012-2013 Nampa school budget crisis all too well.

"It just seemed, week after week, it was like getting punched in the face because there was another crisis," then-interim school Superintendent Pete Koehler told Boise Weekly in November 2013,

The Nampa School District's budget mess began in 2012 after officials had projected a nearly $2 million surplus during fiscal year 2011, when in fact, it operated on a $1 million deficit. School officials said the mistake "was camouflaged by $3 million in federal stimulus money that hadn't been budgeted for." District budget officials said that the stimulus money was "double budgeted." Additionally, state support was overbudgeted by nearly $1 million.

Resignations, furloughs and terminated contracts followed. Worse yet, the school district suffered a severe crisis in confidence.

And there isn't too much room for optimism in this morning's report in the Press-Tribune, which says there are few financial "backstops" from allowing the same financial crisis to happen again.

"Until you end up in a lot of trouble, it's hard to tell whether or not you're mismanaging your funds," CPA Scot Phillips, a partner at Eide Bailey told the Press-Tribune. "And that's a sliding scale of what somebody considers to be mismanagement."

Simply put, it turns out that a financial audit of an Idaho school district could come back "clean," meaning only that the "presentation of current finances is accurate," according to the Press-Tribune. But the review is far from an analysis that prevents financial mistakes.

And even the current management team in the Nampa school district indicates that there are still weaknesses in the process, in spite of the previous crisis.

"When you ask, 'Why didn't the auditors do anything (before the crisis)?' Well, the auditors don't come in and test your budget," current Finance Officer Randy Dewey told the Press-Tribune. "Because you can't. You have to almost be a consultant at that time, and that crosses that line of independence."

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