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City endorses 'best practices' approach to remedy audit issues

April 4, 2017
By JIM LINETTE (jlinette@breezenewspapers.com) , Cape Coral Daily Breeze

Cape Coral City Council will support recommendations by the city's audit committee to see that the Charter School Authority comply with policies and procedures established by the Finance Department.

The authority, a council-appointed quasi-independent board, is to now engage the expertise of city staff in correcting deficiencies identified in the internal audit conducted by the city.

The 6-2 vote, with council members Richard Leon and John Carioscia dissenting, was taken at Monday's regular council meeting before the Charter School Governing Board was to meet Tuesday to discuss steps in finding a replacement for Superintendent Nelson Stephenson, who gave notice last week that he would not sign a new contract to remain as the charter schools' leader.

The audit, released early this year and rehashed Monday, found 18 issues of alleged lack of internal controls for tracking, budgeting and expending primarily internal funds, such as money generated through fundraisers and donations amounting to about $500,000.

"They are not using controls to ensure the money goes back into the school system," said city Finance Director Victoria Bateman Monday night. "This is not difficult to fix."

Chair of the audit committee Harvey Wolfson said the panel is most concerned by the city's finance department not being included by the schools in its rectifying the 18 issues cited. Wolfson said it is unreasonable to put controls in the same hands that created those weaknesses.

Leon read a email he received from Stephenson earlier in the day in which the superintendent, who was not at the council meeting, indicated it was not his intent or the board's to exclude the finance director from the process and that he was happy to include any city staff assistance for the betterment of the schools.

"This is not about the who, but the what," said Mayor Marni Sawicki. "We don't know where the money went and we may never now how much. The point is to fix it and build a better system."

Carioscia expressed a desire to hold Stephenson accountable for "these egregious violations because it happened on his watch. I'd like to know if this council would be remiss if we do not give this to the State Attorney."

Councilmember Jessica Cosden, who is chair of the governing board as council's liaison to the charter schools, pointed out that there were no findings of staff fraud in the audit report and it was Stephenson who initiated the first audit in the charter school's history.

"This is what happens when you let a school system grow for 12 years and never perform an internal audit," Cosden said adding that the governing board intends to address the audit committee's recommendations at its next meeting on April 21.

Councilmember Rana Erbrick called for council members to stop placing blame.

"Let's just stop playing the blame game, fix it and move on," Erbrick said. "It's fixable, even the awful ones. Let the governing board do their job. This is not the way we should be doing business here, everyone just gets angry. I understand the passion, but there is plenty of blame on both sides, so let's move forward. The system grew and the problems grew exponentially."

City Manager John Szerlag harkened back to the best practices for financial sustainability being determined through the "Burton Model" that was presented at a previous council meeting.

"I should have a report from Burton & Associates in the next week or so," Szerlag said.

 
 
 

 

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