McHenry County Blog

The Huntley School Board was scheduled to discuss the scathing outside auditor’s management letter that Aileen Seedorf managed to pry obtain with a Freedom of Information request, so I decided to attend its meeting Thursday night.

My reward was watching the board move toward a consensus in deciding what areas should be subject to a forensic audit.

It will definitely cover payroll and benefits for the past four years, if the board follows the suggestion of new Superintendent John Burkey.

(There is a) very clear need for a targeted audit of our payroll for the last four years.

We need to get this out in the open. We know we have some irregularities…a small part of it may be criminal.

The inclusion of fringe benefits pleased board member Larry Snow, who said,

We have good reason to believe benefits have been pretty loosey-goosey.

And, the site and construction fund will probably also be targeted, if my sense of how the meeting went is correct.

There are the two things you should do and if it leads you elsewhere, it leads you elsewhere,

suggested newly appointed board member Tony Quagliano, the only Certified Pubic Accountant the school district has. His observation came after Rosemary Herringer observed,

All I see we’re targeting now is payroll and site and construction.

Only a muted residual of hostility was evident, so maybe my hope for a new dawn at the board level is being fulfilled.

When I arrived, a little late, Snow was asking questions.

The first I heard was

How can we be sure all of these problems have been remedied?

Burkey indicated he would conduct “a complete analysis,” offering a several month timeline, which

I’m going to lead myself because it’s that important—on the fiscal side.

Snow said,

I’m OK with that.

Referring first to the payroll problems, he said,

I’ll ask you for your approval and we’re going to remedy it.

He added,

I think that the procedures and checks and balances are much better. However, they are not there yet.

Board member Kim Skaja wanted to know

Were other members aware of these (management) letters?

I didn’t realize there was this other letter,

she said, referring to the management letters that were distributed at the meeting. Previously, apparently board members only saw the brief cover letter that accompanied the audits.

Apparently, past administrations had not shared the annual management letters with board members.

She reached the conclusion that they were “pretty clear.”

You really don’t have to be a rocket scientist to understand this..

In a manner considered “very polite” by Skaja, Snow bore in on a $1.3 million transfer that was supposed to be transferred from the operations fund to the site and construction fund several years ago:

There was a reason these transfers were recommended. The money belonged in site and construction

There’s something not good looking about this..

Skaja said,

…it shows the challenge Mr. (Stan) Hall had when he came in here (to head finance about a year ago).

She said that she thought Snow had been pressing for a forensic

because you were angry at certain individuals.

Snow admitted that he did not have evidence something wrong was happening in payroll in response to Skaja’s observation that he hadn’t offered “anything tangible.”

Snow’s comment was

If anyone of us has evidence of actual theft, I’d have to have gone to the state(’s) attorney. It would be a felony, if I didn’t.

Snow pointed out that forensic audits were regular features in New Jersey local governments

when a CFO (Chief Financial Officer) leaves,

suggesting the corrupt nature of the state he lived in for two years made that advisable.

In Illinois, Snow, pointed out,

There is no outside individual designated to detect theft and fraud.

Snow explained the difference between a regular audit and a forensic audit with regard to site and construction

In site and construction you can have duplicate payments…(as well as) payments for things that were never done.

There was also concern about the cost of a forensic audit.

We just went through $130,000 (on the regular audit). If I was going to spend the money, I’d rather hire somebody,

Frank Coleman observed.

Herringer was also concerned that the cost might be in the hundreds of thousands of dollars.

Quagliano was quiet at his first meeting, but did suggest

You might want to consider hiring, in the short-term, an internal auditor.

(If so, I surely hope such an internal auditor would report to the board.)

Toward the end of the public portion of the meeting, Herringer asked board president Mike Skala,

What do you think?

His reply was,

I’ve said I’ve agreed with Larry for quite a while now.

Labels: Aileen Seedorf, Frank Coleman, Huntley School District 158, John Burkey, Kim Skaja, Larry Snow, Mike Skala, Rosemary Herringer, Stan Hall, Tony Quagliano