Local Analysis Shows Lincoln-Way 210 finances $6.2 million Ahead of Last Year

Frankfort CPA Robert Ripp appealed to the two newest members of the Lincoln-Way 210 Board of Education to take a closer look at District finances, which he said are $6.2 million dollars ahead of last year, according to Lincoln-Way Area Taxpayers Unite (LWATU), which published Ripp's email on their website.

"You must be voices of reason," Ripp said. "Stop the closure of any school until reliable financial data is available to make an informed, rational decision based on all the information that is available now."

The email was specifically addressed to Kathleen Casey, who was sworn in to the Board of Education on February 26, 2016 and Christopher Lucchetti, sworn in on March 10, 2016. Both members were chosen to fill vacancies on the Board left by the resignations of board member Christopher McFadden and former Board President Kevin Molloy earlier this year.

Citing a variety of factors from flawed analysis by District administration, to massive amounts of new and disturbing financial information that has come to light since the August 13, 2015 vote to close the state-of-the-art, eight-year-old Lincoln-Way North High School, Ripp said it is not too late for the board members to take action.

"The District’s future is at stake," Ripp said. "It is not too late."

Ripp, Lincoln-Way 210 parent and taxpayer, is an officer for LWATU, a citizen watchdog group that has unearthed a multitude of questions and information about Lincoln-Way 210's finances in the months since the vote to close Lincoln-Way North.

The full text of Ripp's email to board members:

"Nine months through the current fiscal year, the District is performing $6.2 million better than it was performing last year. Administration is unable and/or unwilling to explain the drastic improvement. In fact, the current $6.2 million turn-around exceeds the Board projected savings from closing an entire high school ($5.2 million).

"At the last Board meetingMr. Langert cautioned the Board the current $6.2 million improvement would not hold up for the remaining 3 months of FY16. Mr. Langert then proceeded to give two reasons:

1) a change in the District’s payroll frequency and

2) the fact the District was not paying its bills on time during the prior fiscal year.

"Neither of these reasons explains the District’s drastic financial turn around.

1) During FY15, the District employed a bi-weekly payroll schedule. During FY16, the District moved to a semi-monthly payroll schedule. There were six semi-weekly pay periods in April through June 2015 (04/10/15, 04/24/15, 05/08/15, 05/22/15, 06/05/15, and 06/19/15). There will also be six bi-monthly payrolls in April through June 2016.

Based on the District’s current FY16 budgeted salaries, the switch from bi-weekly to semi-monthly will equate to approximately $1 million more of expense in the last quarter of FY16 vs the last quarter of FY15.

2) Mr. Langert’s remarks about the prior fiscal year’s expenses directly contradict information previously provided by the District. Previously Administration told the community that during FY15, the District was able to reduce its vendor payment status from net 90 to net 45 days. (Please see Fiscal Year Budget Closeout report that was presented at the July 16, 2015 Board of Education meeting.)

"Please note that you can find this report on the District’s website under Financial Update. Assuming the FY15 Budget Closeout report is correct; as a cash basis District, the District in essence paid 13 and ½ months worth of expenses in FY 2015 and will only be paying 12 months on expenses in FY 16. This fact will lead to an even larger current year improvement.

"Additionally Mr. Langert failed to inform you that the FY16 budget was prepared with the assumption the District will receive less total revenue in FY16 than it received in FY15. The District has never seen a decrease in its total revenue. The FY16 budgeted revenue was conservative to a fault and is misleading.

You can review the entire September 9, 2015 budget presentation on youtube athttps://www.youtube.com/watch?v=Ns2HkecHkMs&list=PLMYuqkco7GztfxP7W3gCjMC4Dya62MpCH.

"The actual property tax extensions should be available any day – for some reason their release has been delayed this year. When they are released, the actual property tax extensions will no doubt exceed the budgeted property tax receipts. This of course will also widen the current year improvement over the prior year.

"Mr. Luchetti (sic), based on your questioning of Mr. Langert’s budgeted April, May and June 2016 expenses, I believe you also doubt Mr. Langert's assertion that the FY16 improvement will somehow evaporate of the next few months.

"A few more interesting points about the Treasurer’s Reports – the Treasurers reports are not compiled, reviewed, or presented by the District’s Treasurer, Ms. Fennell. Ms. Fennell is paid a stipend to serve as our District’s Treasurer and also serves as the Superintendent’s personal secretary. Additionally, Ms. Fennell lacks the educational requirements mandated by the Illinois School Code to serve as a school board Treasurer.

"The District’s monthly Treasurer’s Reports and annual AFRS are presented on the cash basis of accounting which allows administration to manipulate when expenses are recorded simply by adjusting when vendor bills are paid. Some additional notes about the March 2016 Treasurer’s Report. As of today, the March 2016 Treasurer’s Report has not been posted to the District’s website. During the Board meeting presentation of the Treasurer’s Report, the slide show could not be viewed even from the first few rows of the auditorium. When this was pointed out, Mr. Langert said that he could not make the slides any larger as I watched him decrease the zoom ratio on the power point presentation.

"The District is on the brink of permanently damaging the educational and extra-curricular opportunities of the entire District by closing a high school effective the 2016-2017 school year.

"Your fellow Board members are steadfastly defending their August 2015 decision even though administration is unable and/or unwilling to prepare realistic budgets or monthly Treasurer’s Reports, the District fired its long time audit firm (20 plus years), the District fired its long time assistant superintendent of Business (with an agreement not to “press charges”), a Board member who happens to be a federal prosecutor resigned from the Board, another Board member was quoted recently as stating the District engaged in a “shell game” with public bond funds (this same Board member has also said the Board trusted Administration and approved financial reports presented by administration), the ISBE initiated a formal review of the District’s finances, a recently released Agreed Upon Procedures engagement revealed the administration was able to misapply funds in the amount of $4.6 million by unsupported journal entries, not to mention the 20 or so other financial mismanagement issues disclosed in the newspapers and television on a weekly basis.

"There is a reason published best practices dictate a year long school closure process that incorporates input from the community. The information the Board has now is completely different from the “information” the Board based its decision on in closing a school in 99 days.

"As new Board members, you must be voices of reason. Stop the closure of any school until reliable financial data is available to make an informed, rational decision based on all the information that is available now.

The District’s future is at stake.It is not too late. Thank you for your time.

Respectfully,

Robert Ripp

District 210 Parent and Taxpayer

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