State Auditor clamps down, but not quite far enough, on the misuse of public dollars

Troubled charter schools around the state have been in the news of late for misspending and misallocating taxpayer money. Take for instance a recent special audit of the Dayton-based Richard Allen charter schools that revealed over $900,000 in findings for recovery from school management and governing authority members. In northern Ohio three charter school treasurers are responsible for over $1 million in questionable spending of public dollars. Charter schools are not the only ones spending public dollars in questionable ways: The purchase of boxer shorts and golf course memberships recently showed up in audits of local governments.

In response to these financial improprieties State Auditor Dave Yost, along with Rep. Hagan (R-Alliance) and Sen. Schaffer (R-Lancaster), crafted the Fiscal Integrity Act. The proposed bill (yet to be formally introduced) would bolster accountability measures and education requirements for treasurers working in the public sector. The bill would impact district schools, community (aka charter) schools, and local governments.

Highlights of the proposed Fiscal Integrity Act
Education

  • All charter school treasurers would be required to be licensed in the same way that public school treasurers currently are. Community schools treasurers will now have to have a bachelor’s degree in a related business field and complete a 300 hour internship with a treasurer’s office in order to be licensed. Currently, charter school treasurers are only required to have 16 hours of accounting classes, 24 hours of classes in the first year on the job, and only 8 hours a year after that.

Accountability

  • If a public school district or charter school is declared “unauditable” the treasurer responsible will be suspended until the audit is completed.
  • Within 45 days of being declared “unauditable” the public school district or charter must present a plan to the Auditor of State detailing how it will bring its records to an auditable condition.
  • School districts, counties, and cities that can’t be audited will have their public funding withheld -- a stipulation that is already in place for community schools.
  • Any treasurer convicted of misusing public funds will be banned from holding public office for four years.

While the proposed legislation has a lot of merit we question the value of requiring more internship hours in a traditional district office for prospective charter school treasurers. Charter schools are decidedly different entities than are traditional districts. That said, ratcheting up penalties for maleficence or shoddy treasury work is totally appropriate and should be widely supported.  We’d even go further on this front. The Fiscal Integrity Act waits until a school or district is declared unauditable before the treasurer faces suspension. But in fact, a district can be misspending public money and still be “auditable.” Entities placed on the unauditable list may have already squandered away millions of tax payer dollars – by the time a school or government has been declared unauditable, the damage has already been done. A better approach would be to take quick action against treasurers whose schools are auditable but have “findings for recovery” in an audit. Those offenders should have a set, short period of time to explain the findings and pay the amount owed, or have their license suspended.

Most public treasurers are honest and competent public servants using tax payer dollars in a responsible and legal manner, but as State Auditor Yost said, “One bad apple spoils the bunch and the worms must be rooted out.” There are charter and public schools alike that are working hard and doing the job right, and then there are those like the Richard Allen schools that apparently took an “anything goes” approach and repeatedly misspent tax payer money .

Kudos to Auditor Dave Yost for introducing a piece of legislation that attempts to create an environment of controls, increased education, and real repercussions, which in turn should lessen the temptation to mishandle public funds in the first place.

More By Author

Related Articles