Audit Of Burlington Schools Student Funds Uncovers Lax Oversight

BURLINGTON, MA -- An audit of the Burlington Public School system's performing arts revolving fund raised questions about how the money in the fund was managed and suggested the district did not follow state regulations in managing the fund. The audit also said the school system needs to implement policies to better manage cash in the fund, which holds ticket revenues from, and is used to pay for expenses incurred by, productions put on by the performing arts department.

But auditors from Roselli, Clark and Associates of Woburn also noted it was impossible to get a complete snapshot of the fund's receipts because the school department never turned over a profit and loss summary from the Burlington Community Concert Series and other information needed to complete a comprehensive review. The report attributed most of the fund's deficit, which was at $80,237 when the audit was conducted in August, to losses from that series, which brings local and performing acts to Burlington.

The most recent audit is the second big blow for the district this school year. Earlier this year, Roselli, Clark and Associates audited the district's student activity accounts, which collects a wide range of fees from students for everything from club dues to field trip expenses.

"Cash has been awash here and this is of tremendous concern to me," Joan Kennedy Contsant, a former town meeting member, said at the school committee's November 14 meeting. "We need to know information here and it's not being given to us. I cannot tell you how mortifying this is," said Constant. "If you cannot tell where cash has gone - if it's been mishandled, misplaced, lost or misappropriated -- you're getting into the realm of felonious conduct."

Superintendent Eric Conti was not immediately available for comment Monday. The school committee is scheduled to discuss the most recent audit at its meeting on December 19. The audit of the performing arts revolving fund follows the audit of the larger student activity accounts. When the school committee reviewed that audit, which also raised concerns of how funds were being handled, at its September 12 meeting, Conti said the report showed "no findings of misuse or fraud" and that the district would need to adopt new policies on how student funds were handled, according to meeting minuted.

The deficit highlighted in the audit of the music program was partially offset by transferring money from the school system's operating budget. "(T)hese charges are not appropriate for the School operating budget," the auditors concluded.

Among the findings in the audit of the music program:

• Tickets that were sold for cash on the day of the show were listed as "comp," or free tickets. The price those tickets were sold for was not recorded. The audit was unclear on whether or not receipts from those ticket sales were deposited into the account.
• A cash box the department keeps to make change for tickets sold on the night of performances was not recorded on the town's general ledger, meaning "at some point in the past these funds were collected and not turned over to the Town Treasurer."
• The auditors could not ascertain whether some money from fees charged to students was deposited back into the fund.
• The four-show Burlington Community Concert Series lost between $35,000 and $40,000 in fiscal year 2017. On average, the shows generated $6,000 in ticket sales while paying $10,000 in talent fees, on top of hotel, meal and transportation expenses. "These losses are one of the main drivers of the Revolving Fund deficit," the audit concluded.
• The district should not have paid for the deficit incurred for the concert series out of the fund, which is only to be used for extracurricular educational programs.

"The Burlington Community Concert Series, while a worthwhile endeavor, is a costly one and likely cannot be continued without a significant commitment from Town Meeting or sponsors in the community," the auditors wrote.

Longstanding Concerns Over Finances

At its November 14 meeting, the school committee began discussing an action plan to begin addressing the concerns raised in the report of the student activity accounts, which raised concerns similar to those raised in the more recent audit of the performing arts account.

"While none of us would like to think there was misappropriation, there is nothing in the reports to verify whether that is true or not," Eileen Sickler, an accountant and town meeting member, said at the November 14 school committee meeting. "I'd like the sun to shine on all the transactions so we know exactly where the money is being spent."

Among the findings in that report:

• There was no policy in place to handle how teachers collect cash from students to accounts, which numbered as many as 10 per school.
• In 20 years, many of the accounts had never been reconciled and the checking accounts had never been balanced.
• The school committee failed to turn over all of the information Roselli, Clark and Associates needed to complete a comprehensive audit.

"I want to know why, in 20 years, nobody thought to balance 30 checking accounts," Town Meeting member Gary D. Mercier said. "I just don't understand the thought process...it is ripe for money to get misplaced."

Diane Creedon, a member of the Town Meeting ways and means committee which had requested the audits, said she was "underwhelmed" by the proposed action plan distributed at the meeting. She said the problem with the accounts had been going on for years and questioned how the committee could accept the report as an official audit when the auditors noted they did not have all of the information they needed to complete a thorough review of the funds.

Conti said he would confirm with Roselli, Clark and Associates whether or not the report could be used as an audit.

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Patch file photo.

Dave Copeland can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).