The McCurdy Charter School Governance Board received an interesting Valentine’s gift on Feb. 14 — a gift that will keep on giving.
State-appointed business manager Deanna Gomez gave the Board an update on their finances as well as a tutorial of the process for creating useful financial reports and reconciling the school’s general ledger with its bank account.
The state Public Education Department took over the 2-year-old charter school’s finances when auditor Moss Adams could not express a condition on the finances because the statements were in disorder. The accounting software AptaFund, showed McCurdy was overdrawn by $1.9 million, while the bank accounts showed a balance of $160,000.
Gomez said McCurdy’s finances for the 2013-2014 are up-to-date and reconciled. This year’s beginning bank account balance was negative $188,000. At the end of last month, McCurdy had $64,665 in its bank account. Though out of the red, this number was still too low, Gomez said.
Before leaving McCurdy, she wanted to make sure the finance committee and Board were comfortable reviewing financial reports, Gomez said. The Board should be on the lookout for the following red flags:
• A business manager not showing detailed reports
• Checks entered twice
• Expenditures which have not appeared on prior reports and
• Too many negative account funds
• Checks with only one signature
She also recommended all checks have two signatures, no matter the amount of money.
However, Gomez will not be leaving McCurdy for at least a few months.
The work on last year has just begun. For the first year as a charter, McCurdy contracted with Griego Professional Services as their business manager. In the course of seven months, three different accountants headed up McCurdy’s account and in various hands, the school’s finances became a mess.
Gomez said too many journal entries had been made into AptaFund. The prior firm also set the school’s financials in too much detail.
“You can get lost in the details,” Gomez said.
When the school’s AptaFund account was first created by Griego Professional Services, a variety of account codes were used, more narrow and detailed than the fund the codes were part of, she said.
Consequently, the reports were hard to read and often misleading. With current year financials up-to-date, Gomez will delete unnecessary account codes and reclassify certain funds and accounts for a streamlined report.
The Board turned page by page through 145 pages of one account balance report.
“You don’t need 145 pages,” Gomez said.
“Will you still be able to access the detail?” Board President Deborah Anderson asked.
“You will be able to see everything you need to see,” Gomez said.
All Board members had been set up with read-only accounts to AptaFund, Gomez said. This will allow the Board to verify everything Gomez is telling them, but will not allow them to make additional entries.
“These reports need to be useful to you,” Gomez said. “If the reports aren’t useful, then why are we even doing it?”
As Gomez begins to go through the 2012-2013 school year financial statement and make the necessary changes, such as canceling extra journal entries, she will guide the Board through next year’s budget process.