What Everyone in WBCSD Needs to Know Before Voting on the Proposed Levy

What Everyone in WBCSD Needs to Know Before Voting on the Proposed Levy

A Call for WBCSD Accountability

by Kathy Nash

The West Bonner County School District has put a tax levy on the May elections ballot to collect $9.4 million from the residents of West Bonner County over the next two years. Why is there a 34% increase over the last levy amount of $3.4 million per year when the State of Idaho set aside a 16% increase in school funding in addition to substantial raises for teachers and staff along with healthy increases for just about every area of a school district budget including discretionary spending?

In prior years the property tax portion of the school district revenue has been listed at 25% of the school district budget, this proposed levy will increase the local taxpayer’s portion to 33% of the budget. When the parents of our district’s children and their neighbors have to tighten their own belts in these tough economic times, why is the school district reaching even further into their pockets? When 60% of the children in this school district live in poverty, why is the administration seeking to take even more money from our district families to fund itself?

My name is Kathy Nash and I have been very involved with this district, attending board and other meetings since 2019. I have also been doing bookkeeping and accounting work for over 30 years, and those are some of the questions I found myself asking when looking at this proposed levy. I have been looking over the bookkeeping policies and finances of the district to see if I could get some answers to those basic questions.

When I look at what is available online, at what is supposed to be posted for transparency purposes, the list of questions only gets larger. Generally Accepted Accounting Principles (known as GAAP) standards are not followed in the financial management and reporting of the school district. The district’s own financial and personnel policies are not followed. The inconsistencies in the posted financial reports are huge.

In my accounting and bookkeeping experience these are big red flags. The following is a summary of some of the red flags that I found in my examination that every resident of the West Bonner County School district needs to know before voting on the proposed levy:

Potential misrepresentation, hiding of financial information, and financial mismanagement:

According to the district over $3 million per year of this proposed levy is going just for salaries. The district’s business office was aware that the Governor and Legislature intended to increase all wages around 16% for the State in addition to substantially increasing funding for many aspects of a district’s budget. ⁱ Why, was this subsidy not calculated into the formula, in order to reduce the amount of what is needed for the proposed levy? Why do levy advocates claim the proposed levy is “for the kids” when over 60% of the proposed levy comes straight out of the pockets of the district’s families and their neighbors and goes straight into the pockets of administrators and teachers (who already earn more than twice as much as district residents on average)?

The state student/teacher funding formulas reimburse the school district for 62 full time certified staff yet the district retains over 82 full time certified staff. According to the Yearly Audit reports ending from 2009 to 2022, the number of students decreased a total of 26.9% while the funding per student increased by 59.3%. ⁱⁱ  On top of this they want to keep all the ESSER III funded counselors and aids that were hired with federal grant money this year. So, they just added the cost of those excess positions to the budget for the proposed levy, leaving district families and residents funding 100% of these excess salaries and benefits. Why does this district continue to make the local taxpayers foot the bill for their inability to correctly manage their staffing needs?

There are many accounting irregularities found in the financial reports from prior years resulting in questions about the bookkeeping practices of the previous business manager, but when records requests are turned in to clear up those questions, requests are answered with incomplete information, or large fees are demanded to access the information. Why is this information being guarded from public view?

Some of our representatives on the current board have been asking for a deep look into the current budget in order to get a better idea on how much was really needed for the levy, but every time they make the request, the district’s business office has ignored them. Why is the district administration stonewalling the current board’s requests for detailed information concerning the budget and the proposed levy?

There are entire pages of manual checks listed in a check disbursement report that don’t show up in the expenses reporting. This is a serious accounting red flag. Each year the district posts two financial reports onto the district webpage titled “Check Disbursements” and “Revenue and Expenses.” One would think that comparing these two reports, financial information should pair up on both reports. Unfortunately, this is not the case. From the check disbursements report for one year there are 154 manual checks written for over $80,000 that do not follow the check number sequence listed from the Accounts Payable expense system. Most of these same checks do not show up anywhere in the Revenue and Disbursements report to see what expense account they were applied to. Many of these manual checks don’t seem to have been presented to the board for approval of payment. Why not? To whom were those checks written and where did that money go?

Over $1.5 million dollars from previous levy receipts may be unaccounted for. The public needs to ascertain if the funds received from previous levies have been spent the way the voters approved when those levies were passed. For some reason the balance of those funds seem to be missing from this year’s budget and levy proposal. From what I can find in the internal Audit report there was a cash and receivables balance for previous levy years at the end of 2022 of $1,572,394. Why isn’t it showing in the budget for this year?

In Financial Report for June 30, 22, there are 9 pages (76-84) of the Summary of Auditor’s Results where 5 “Significant Deficiency” and “Material Weakness” are identified. These issues came up because of the lack of training the previous business manager gave to the new business manager. The district paid the previous business manager over $10,000 for a single month’s worth of training which according to the current manager, she only received a week and a half of training, therefore was left to her own devices to try to figure out a very complex accounting system. Now the District is paying for additional training and travel expense for the new manager to get what the old business manager had already been paid to deliver. Why is the district administration proposing a new 34% larger tax when “significant deficiencies” and “material weaknesses” in the accounting and bookkeeping systems for that tax money still exist? How can the district residents have any confidence that their tax dollars are being properly spent?

District employees have not been following district policies and procedures:

Financial Management Policy 7130ⁱⁱⁱ: Looking over the Reports the board is provided with, there has been missing information and basic accounting irregularities in many of those reports, such as manual checks written which are not listed, debits and credits not balancing on the reports, and journal entries not balancing in the Yearly Revenues and Expenditure reports. Standard accounting practice is not being followed. Why not?

Financial Management Policy 7225 ^iv: Every internal audit since 2017 clearly states that there is not enough separation of duties in the district business office to meet GAAP accounting standards. The chairman of the board signed off every year, that the board is aware and accepts the risk for this non-compliance. Further down this same policy states that the Superintendent is “responsible for developing internal controls designed to detect fraud, financial impropriety or fiscal irregularities within the district.” Yet the former superintendent (P.A.) did not follow the proper financial management policy that has been in place since Dec, 2013. Why not?

Financial Management Policy 7415 ^v: The policy for payment for goods and services, the issuance of checks, and cancellations of checks has also not been followed. Manual checks are written without the appropriate purchase order pre-approvals having been signed off on for presentation to the board on their monthly reports. Why?

Personnel-Personal Conduct Policy 5280 ^vi: Last amended July 18, 2018, this policy reads “Nothing in this policy shall require the Superintendent or Board, in the case when the conflict of interest directly relates to the Superintendent, to transfer an employee to a different position in an effort to avoid a conflict of interest, if doing so would not be in the best interest of the District.” This policy was passed by the board after the Superintendent and the Business Manager entered into a relationship with each other, in order for them to get married and remain in their positions. Why was there a special exception for a previous superintendent from the original standard that was designed to protect the district from potential financial corruption?

Political Activity-Staff Participation Policy 5300 ^vii “No district employee may use public facilities, equipment, including, but not limited to….that are purchased with public funds for election or political campaigns, private or charitable organizations or foundations or ballot issues.” At minimum $43,000 was used in the last levy cycle for a survey and public relations campaign designed to encourage the voters to vote “yes” on the levy. We were told it was to open communication between the district and community. Yet the new superintendent accomplished the same thing with virtually no taxpayer cost in starting the 3-C’s meetings she held monthly. Why did the previous board fail to properly represent its voting constituents and potentially even violate state law by spending taxpayer dollars on promoting the last levy?

“This policy is also to prevent the use of students, school time or property to advocate a single point of view” A notarized statement from a previous student stated that in the last levy cycle, a teacher was encouraging students to go vote on the levy telling them they would get extra credit points for it. Having done this, when the teacher found out the student had voted no he refused to give that student the promised extra credit causing that student to not graduate on time.^viii This teacher was using the students as political pawns for his own personal point of view (and to get salary increases)! Why are the district administrators and teachers using our own children in an effort to increase our tax burden, the majority of which goes to their own pay?

How Should We Move Forward?

At a meeting on April 18th the County Treasurer stated that there are currently 28 properties which the county is in the process of seizing from families who can’t come up with the money to pay their taxes. How many of those are the homes of our school district students and their neighbors? How many more will we place on the Treasurer’s desk for seizure if we pass this levy? We shouldn’t be taxing any of our district’s children or their neighbors out of their homes, and especially not when we don’t even have accurate information about what our district administration is doing with the money it’s seizing.

Given the multiple serious questions that arise out of a review of the district’s publicly available financial reporting, approving any further taxes to increase funding to our school district before getting those questions answered with a thorough third party audit would be irresponsible to our district’s families and their neighbors.

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