Thursday, May 07, 2009

Cookin' the books the Ohio charter school way....creative bookkeeping can be fun, at least..... 'till the auditor comes a knockin'!


From John Curry, May 7, 2009
"Auditors found Nu Bethel:
• Withheld from employees, but did not remit, $34,000 in federal income taxes, $9,500 in Medicare taxes and $8,200 in state income taxes. It also failed to remit premiums to the Ohio Bureau of Workers’ Compensation.
• Hired Shye in July 30, 2005 but wrote nearly $24,000 in checks without an accounting system before Shye began his duties that September.
• Wrote numerous checks that cleared the bank but weren’t posted to the books, and recreated transactions so its books would reconcile with the bank."
Audit finds illegal spending, tax troubles at Dayton charter school
daytondailynews.com, May 7, 2009
By Anthony Gottschlich
Staff Writer
DAYTON — A local charter school illegally spent nearly $28,000 in fiscal 2006 and 2007, withheld taxes from employees but didn’t pay the government and failed to properly document thousands of dollars in expenditures, according to a state audit released Thursday, May 7.
“As a result, our office cannot determine if these expenditures were for a proper public purpose,” Ohio Auditor Mary Taylor’s office wrote in a 60-page audit of Nu Bethel Center of Excellence, 3560 W. Siebenthaler Ave.
The audit issued $27,708 in findings for recovery, but noted they’ve already been repaid by Nu Bethel founders James and Johnnye Willis and Treasurer Carl W. Shye Jr., who oversees the books for two other fiscally troubled charter schools in Dayton.
The bulk of the findings for recovery appear to involve expenditures related to undocumented loans the Willises made to the school, which was $70,000 in debt last year.
Johnnye Willis, principal of the 54-pupil school for kindergarten through sixth grades, said she was upset by the audit and couldn’t explain all of its findings.
“God knows we’ve been honest and we’ve tried to do the right thing,” she said. “Some things happened beyond our control.”
Auditors found Nu Bethel:
• Withheld from employees, but did not remit, $34,000 in federal income taxes, $9,500 in Medicare taxes and $8,200 in state income taxes. It also failed to remit premiums to the Ohio Bureau of Workers’ Compensation.
• Hired Shye in July 30, 2005 but wrote nearly $24,000 in checks without an accounting system before Shye began his duties that September.
• Wrote numerous checks that cleared the bank but weren’t posted to the books, and recreated transactions so its books would reconcile with the bank.
Shye said he made some mistakes, but attributed most of the troubles to transactions that occurred prior to his joining the school, a computer system that crashed and a high turnover in administrators. But stronger controls are in place today, he and Johnnye Willis said.
“We’ve set up a repayment plan to repay past-due taxes and we are paying currently for all taxing authorities,” Shye said. Still, the audit “raises a flag” with the Ohio Department of Education, which is on track to provide $383,000 in funding to Nu Bethel this school year, ODE spokesman Scott Blake said.
“Our standard procedure is to request an investigation by the sponsor and have the school follow up with a corrective action plan,” Blake said.
Leonard Harding, executive director of sponsor Education Resources Consultants of Ohio, said Nu Bethel will have to “show proof they’ve corrected those findings.”
Shye, treasurer for nine Ohio charter schools, also serves as treasurer for Arise Academy at 1 Elizabeth Place and New City Community School at 1516 Salem Ave. He attributed similar causes for the financial troubles at those schools.
The Dayton Daily News reported last month that Arise is $330,000 in debt, owes $595,000 to vendors and has struggled to make payroll and provide benefits for its employees.
A 2006-07 audit for New City, the most recent audit available, found the school $202,000 in debt and riddled with accounting errors, undocumented purchases and troubles with payroll records.
Contact this reporter at (937) 225-7408 or agottschlich@DaytonDailyNews.com.
Should you like to read the actual audit ( in an Adobe download version) click on this link which will take you to the Ohio Auditor's office for some more recipes from this charter school!
Also, today's release from the Ohio Auditor featured two other Ohio charter schools who had findings for recovery; they are the Columbus Humanities Arts and Technology Academy in Franklin County and the Victory Academy of Toledo in Lucas County. Their audits can be found by clicking on these Adobe downloads from the Ohio Auditor's office:
Former State Representative Sally Perz (R-Toledo), the "Mother of Ohio's Charter Schools," gave birth to charter (community) schools in Ohio back in 1997 when she sponsored House Bill 215 which allowed charter schools to be established . Mother Perz, you might want to watch your children a little closer. Maybe you can persuade them to take up a new hobby like the culinary arts, after all...some are pretty good at cooking!
John

posted by Kathie Bracy at 10:54 PM

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