Suggestion to bring on internal auditors flops at school board workshop

A debate over saving money versus public perception ended in a deadlock during Tuesday afternoon’s School Board of Manatee County workshop.

The board discussed changing a policy to allow district employees to assist in the internal audit which is currently conducted by the outside firm Shinn & Co.

District officials said if they were able to hire additional internal auditors, who would report to the school board but work within the district offices, the district could save money. But board member Dave Miner and vice-chairman John Colon balked at the suggestion, saying to augment the work of an external firm with internal district employees was a bad look for a district with a recent history of fiscal trouble.

“When you start saying that employees who work for this superintendent are auditing themselves, you lose the faith of the public,” Miner said.

Miner said the public hadn’t forgotten the district’s financial crisis in 2012, when district officials faced a multimillion dollar deficit and it was subsequently revealed that rosy financial reports given to the board were false.

With two members in support of the change and two opposed, the board pushed the issue down the road.

District Chief Financial Officer Rebecca Roberts said relying on Shinn and Co. every time the district needed to examine small issues internally was extremely expensive.

“What we are facing is that it costs an astronomical amount for us to go to the audit committee and ask them to assign an audit resource to some of our smallest concerns,” Roberts said.

Board Chairman Charlie Kennedy and member Gina Messenger both supported rewording the board’s policy, arguing that it allowed for greater efficiency. Internal audits are conducted to provide management with an assessment of the risks in an organization and are not subject to the same laws of an external audit, which is done exclusively by outside firms to assess the truthfulness of an organization’s financial statements.

The board closed its workshop with a discussion on how to finish reviewing all of its policies to ensure they are in compliance with new federal guidelines. The board must complete the review by the end of the fiscal year — which ends June 30 — or it risks losing $50 million in federal grants.

The board is currently scheduled to complete the process at next week’s June 13 workshop and meeting, but with several policies still not reviewed, board attorney Jim Dye is looking into whether the board can delay it until the June 27 meeting. If the board has to complete the process by June 13, they will likely have to schedule an emergency meeting to complete the task.

“We have to get these policies done,” Greene said. “We can no longer prolong this.”

This story was originally published June 6, 2017 at 6:39 PM with the headline "Suggestion to bring on internal auditors flops at school board workshop."