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March 13, 2012 Published in Editorials

Is This An Audit I See Before Me?

At the end of last week, Alexandria City Public Schools Superintendent Morton Sherman released an "audit" prepared by the accounting firm of Robinson, Farmer, Cox Associates. He sent a memorandum to announce: "There are no findings that personal gain or profit took place" and that "There is sufficient funding in the overall CIP accounts to complete major facilities projects."

The first question in this murky business of ACPS’ capital spending is, "Is this really an audit?" Fortunately we can read and the answer appears to be “NO.” Perhaps we were wrong to have visions of platoons of men and women wearing green eyeshades combing through the books of ACPS to uncover what happened and why.

What we have as stated by Robinson, Farmer, Cox Associates themselves is a "Report on Agreed upon Procedures (for) CIP Project Expenditures (from) July 1, 2010 through October 31, 2011. The accountants did not develop their own data but were given ACPS data and City data. They were directed to study CIP procurement at only 6 elementary schools by ACPS. Their report begins with the statement: "The sufficiency of these procedures is solely the responsibility of ACPS. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purposes for which this report has been requested or for any other purpose."

We have read many disclaimers in our life but this is probably the broadest we have ever encountered. The accountants will not certify that they have been given sufficient access so that their report is sufficient for the intended purposes let alone any other purpose the School Board or City Council has in mind.

The independent accountants seem to be saying that they were really not allowed to be independent.

This is not surprising. Morton Sherman and his top staff have a long legacy of imposing absolute control.

Before Dr. Sherman's arrival in Alexandria, according to former School Board Members and former School staffers, there were procedures in place to monitor and control expenditures on capital projects. ACPS renovated Hammond and George Washington Middle Schools and built a new TC Williams High School. These projects totaled about $150 million. There were no major financial issues.

At that time, the ACPS finance office monitored expenditures on capital projects. Moreover, the School Board had a Facilities Committee composed of three Board Members that met to monitor the facilities area. There were overruns on various projects and they were dealt with according to the policies in place. Staff came to the Facilities Committee and explained the issue. A financial fix was developed and it went to the Superintendent and the School Board for approval. Then it was delivered to the City for their concurrence.

One of the first acts of Dr. Sherman's tenure here was to ask the School Board to abolish its functional committees like Facilities (and also Curriculum and Instruction). The School Board for some reason agreed. The Board did much less work but lost its independent eyes and ears into what was actually going on in the administration of the schools. Dr. Sherman had, at a stroke established much more absolute control.

Within a year or two there were changes in the way capital programs were administered by the staff. The controls that had been built up were allegedly shifted at first from Finance to Budget and then allegedly vanished completely at the behest of top staff members.

The School Board appoints other committees composed of parents and citizens to advise it. Some of these committees are mandated by State and Federal law. The budget advisory committee has not met all year according to one of its members who has been trying to arrange a meeting. Dr. Sherman's staff has not been forthcoming in assisting. This is more evidence of control.

"All power corrupts and absolute power corrupts absolutely."  Dr. Sherman may claim the best of intentions in his decisions but removing the checks and balances opened the way to disastrous consequences.

Given the findings of the report, is Dr. Sherman now being completely honest? We do not know. The accountants reported evidence that one Facilities Staff member had work performed at his private residence by school contractors. That certainly smells like personal gain to us and has been referred to Alexandria Commonwealth’s Attorney Randy Sengel for investigation. How can Dr. Sherman say there has been no personal gain when this investigation is not complete?

Dr. Sherman's statement that there is sufficient funding to complete major facilities projects is also misleading. The accountants studied 6 schools but 2 of them, John Adams and William Ramsey, had little work done on them. Instead they are a major source of excess funds to help balance the overdrawn accountants. The overall deficit at the six schools was around a half million dollars but would have been more than $3 million at the 4 schools if they were studied alone. We can see why ACPS wanted 6 schools studied.

Work that is not done this year on John Adams and William Ramsey will have to be done in future years. The fact is that Alexandria Taxpayers have watched millions of hard earned dollars disappear into "overruns" that have yet to be justified. We will bet that these undone projects will reappear in capital budget requests to City Council very quickly. Staff and parents at John Adams and William Ramsey must be livid that improvements to their school are being sacrificed to staff incompetence and lack of controls.

Dr. Sherman's administration of ACPS may be shocking, but the complicity of the School Board in it is as bad or worse. Have members reinstated their committees? The answer is no. Did members insist that they run the audit independent of the Superintendent and his staff?  Apparently not. At every step they have been passive and seem to believe that if they are not involved then they are blameless. They, like the Superintendent may try to wash their hands of the matter but in truth they have manifested the greatest incompetence seen in this City’s elected officials in many decades.

Can we trust the Superintendent and Board to really fix this? Unless we see Dr. Sherman relinquish his absolute control and see the School Board reassert its authority the answer will be no. We again encourage City Council to seriously consider quarterly appropriation of the School Board's budget until honest answers are provided and real systems of checks and balances are restored in ACPS.

We do applaud the accounting firm of Robinson, Farmer, Cox Associates for their honesty in stating what they really were allowed to accomplish. We need that same honesty in ACPS.

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