MRH auditors say the district overspent; MRH CFO says issues will be quickly remedied

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At the December Maplewood Richmond Heights School District school board meeting a representative of the KEB auditing firm told the board that the district had spent more than a million dollars beyond what was appropriated for fiscal year 2023, which ended June 30. The Board Briefs for the December meeting didn’t mention the report.

In the January meeting, on Thursday, Richmond Heights resident Heath Moylan said the auditor’s report greatly concerned him.

“Under your watch,” he said to the board, “$1.138 million was spent that you did not approve. And that is your job as a board to be the stewards of that money. That’s how you set the priorities for the district, and that’s how you provide responsibility to all the taxpayers and parents in the community.” He said he doesn’t believe anyone did anything malicious.

MRH Chief Financial Officer Chris Hoelzer responded to the report later in the meeting. “2018-2022 the district had a clean audit. While this [year’s audit] is a setback, it is a small one, and we’re taking steps to remedy it,” he said.

He said he is hopeful that “this presentation demonstrates our commitment to transparency and fiscal responsibility.”

He said that the district has four funds; Fund 1 is for general expenses, and funds 2, 3 and 4 are paid from Fund 1 as needed, similar to transferring money from a savings account to a checking account. The district makes amendments as needed, making sure the various funds have what is needed to cover expenses.

“We will monitor those funds throughout the year,” he said. “We did four amendments last year. The issue came on the final, where we made adjustments to the transfers between funds that was not sufficient to cover.

“There was no misplacement of money, it was simply a matter of budget,” Hoelzer said. “The issues in the audit, we will be able to quickly remedy.”

The audit also reported that there were delays in the auditors receiving complete and accurate schedules and documentation. Hoelzer attributed this to the amount of data that was requested and the fact that his office is short-staffed. He said ideally someone should do the work and someone else should review it, and the current staff is working long hours.

The district’s Board Briefs also covered Hoelzer’s report:

Board Briefs, January 18, 2024 (see the PDF — Board Briefs January 18 2024)

Following the findings presented in December by auditing firm KEB, MRH Chief Financial Officer Chris Hoelzer delivered an action plan outlining how the District will address the findings and improve fiscal practices. The KEB audit found that in fiscal year 2023, actual expenditures exceeded budgeted expenditures in the Special Revenue, Debt Service, and Capital Projects funds. Expenditures exceeded the budget but were not in excess of available cash and no misallocation or misappropriation of funds occurred. The District will monitor expenditures throughout the year by fund and request budget amendments as needed to ensure expenditures do not exceed the approved budget. Amendments will occur at least two times per fiscal year or as needed. The full action plan can be found on the MRH website.

 

4 COMMENTS

  1. Yeah! For a school district that says sorry is the city of St Louis Public schools, that can at best, provide a subpar education for its students, Maplewood parents need a choice in where they send their kids. A Catholic student I know was taken out of Maplewood High School and went to a Catholic High School. He told his mom “wow I really have to work and put forth effort to maintain an A-, as compared to getting an A+ with very little effort at MRH”.

  2. As a retired accountant, who did the budget one year for the big 5 accounting firm I worked for, I can tell you it is an estimate of projected income and expense for the upcoming year. It is a guess, an educated guess, based on past history. Also, it is not uncommon for additions to be made in construction jobs, as sometimes unforeseen situations arise which require more materials, supplies and labor. Hopefully, no one, ie the builders, the accounting firm doing the audit, and the CFO overseeing this is in cahoots with each other. That is one scenario where there’s a serious problem. That doesn’t seem to be the case here. Another serious problem would be if the construction company is using materials which don’t meet code and/or using inept engineers. I have no expertise here; I can only hope that due diligence and vetting has been done. Anyway, it doesn’t seem as though anything underhanded has been done. I would want to see what made up those additions which took things over budget. I would also look at the system of approval. Who approves items for payment? Who signs the checks? Who is the second signer for checks over x amount? Also, a million dollars sounds like a lot of $. What percentage of the job is this? Is it a small percentage? It maybe.

  3. Hopefully, our property taxes won’t be increased again to make up for this failure of oversight. As a senior citizen who has never had and never will have a child in the MRH school system, I can’t afford the luxury of bailing out an inadequate staff that freewheels with the funds it is supposed to manage.

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