An audit by the State of Alabama Department of Examiners reveals several errors in the Limestone County Board of Education’s 2016 – 2017 fiscal budget, including the mishandling of Title I federal funds.

The State of Alabama Department of Examiners Chief Examiner Rachel Riddle identified the deficiencies at the beginning of Tuesday night’s meeting.

Board member Bret McGill said the state audits their budget annually.

According to Riddle, the Limestone County BOE was in overall compliance through Sept. 30, 2017, but the report was not favorable. The audit identified a lack of internal control over major programs and a laundry list of deficiencies.

Title I funds

The board was found to be noncompliant in their handling of Alabama Department of Education Title I grants from Oct. 1, 2016 – Sept. 30, 2017. The Code governing these funds requires advance payments must be limited to the minimum amounts needed and timed according to the cash need. However, the board requested amounts that exceeded the minimum allowed. As a result, the board obtained an excessive amount of cash, which exceeded immediate needs.

The board agreed to comply with the examiner’s recommendation they follow provisions in the Office of Management and Budget’s Uniform Guidance, a set of authoritative rules and requirements for federal awards.

McGill said greater oversight on the part of the board will help prevent the mismanagement of federal funds in the future.

Unauthorized bank accounts

The examiner listed additional deficiencies, including the opening of bank accounts by Tanner Elementary, Elkmont Elementary, Sugar Creek Elementary, Creekside Primary and the robotics teams at the Limestone Career Technical Center, without the approval of the board.

“We don’t really know how it happened, but it shouldn’t have,” McGill said.

According to Riddle, Kimberly Hubbard, the county’s new chief school financial officer, has been trained to make sure schools stay compliant and accountable in this matter.

Dr. Tom Sisk, superintendent of Limestone County Schools, said he hasn’t considered taking disciplinary action against the individuals responsible at this point, citing a lack of information about the circumstances that led to the opening of the accounts.

Sales tax delays

The board was also cited for not remitting sales tax money owed to the Athens City Board of Education in a timely manner.

According to the report, the funds were held more than 30 days and were distributed using incorrect percentages.

In situations where a city school system exists within a county school system, state and county sales taxes flow through the county system to the city school district. Each system receives a percentage of sales taxes from the state based on average daily membership (the number of children who are enrolled in the system) and average daily attendance (the number of students who attend school on any given day). Sisk said the county’s portion of state sales taxes dropped during fiscal year 2016 – 2017, while Athens City Schools saw a rise in their ADM and ADA, thanks to their virtual school program.

Sisk said the check issued by former CSFO Ann Swanner did not accurately reflect the city’s increased share of state sales taxes.

The board agreed to the auditor’s recommendation that controls should be implemented to ensure all distributions are remitted accurately and in a timely manner and all liabilities are properly recorded.

Capital assets

The board was also cited for not having adequate procedures in place to ensure the proper recording of capital asset activity. According to the report, entries made for additional capital assets did not agree with supporting documentation. Amounts for buildings, building improvements and construction in progress were not adjusted to reflect completed projects. Additionally, assets which had been disposed had not been removed from the capital asset subsidiary ledger.

McGill believes many of those mistakes were due to coding errors and have since been adjusted by Hubbard to accurately reflect capital asset expenditures.

Depleted reserves

The board has long been out of compliance with the Code of Alabama 1975, Section 16-13A-9, which requires local school districts to maintain one month’s worth of operating reserve in the general fund, so some members found it as no surprise that the shortage was included in the state examiner’s report.

According to Hubbard, the fund balance is currently at 26 percent, having dropped slightly since last month due to an influx of bills.

McGill is confident the board will eventually restore the fund balance and expects to see the balance go up sometime in early 2019 when the savings from $1.7 million in cutbacks made in May will be more evident.

Bond proceeds misused

Riddle also found the board transferred bond proceeds to the general operating account and used the proceeds to may for expenses, such as payroll.

“You can’t do that,” McGill said. “Bond money is designed strictly for what it was designated for. I suspect we used the bond money to offset some bills until the state paid us back, because our reserve was already depleted at that time.”

That’s the primary reason the board approved a line of credit, which will allow them to borrow money to cover unexpected expenses from a bank instead of pulling funds from unapproved sources such as bond money.

McGill said increased awareness and the line of credit will prevent the board from using bond money or Title I funds to cover bills in the future.

“We should have been asking more questions,” McGill said. “Ms. Hubbard is doing a fantastic job of providing us with monthly reports, and there is a higher level of accountability now.”

Woodruff’s address

In other business, Wilbert Woodruff, president of the Limestone County NAACP, questioned the board’s recent hiring of Deborah Kenyon as the new principal at Tanner High School.

He expressed concern over the hiring process, asking how many applicants applied for the principal position at Tanner High School and how many were interviewed before Kenyon was selected.

After the meeting, Sisk addressed Woodruff’s concerns.

“We advertised the position as an internal fill. Five applied, two were interviewed, and one was selected,” he said. “Two executive directors and myself made the recommendation.”

Sisk said they were looking for someone with a record of working with people, who could serve as a strong instructional leader and who understood A+ College Ready Advanced Placement.

“We wanted someone who is not threatening and easy to approach, who can build consensus and help us with the process of healing, and we felt like the one we selected could do that,” he said.

Clements bleachers

In a unanimous vote, the board gave Sisk permission to solicit bids and enter into a contract with a construction company to replace the destroyed visitors bleachers at Clements High School. The bleachers were mangled beyond repair by a June 28 thunderstorm.

The board also unanimously approved a proposal to allow Limestone County Commission District 3 to remove the damaged bleachers and slab in return for the scrap metal from the bleachers. The value of the scrap metal is estimated at $7,500. Architectural and construction costs for the new bleachers should be covered by insurance.

Sisk reprimanded

The board officially reprimanded Sisk for “failure to follow proper legal procedures” after it was found he violated nepotism laws by recommending his daughter be hired as a special education teacher. In the letter of reprimand, the board said it “believes it is of the utmost importance for all employees to fully comply with all laws and policies of the board.”

The board urged Sisk to follow proper legal procedures in the future. This is the second time the board has reprimanded Sisk since he took over the county school system in 2012.