I linked previously to some pretty serious issues raised by Elaine Hopkins at her blog, Peoria Story. District 150 Board of Education member Jim Stowell has responded to that report and asked me to post it on my blog as well. If you haven’t read the original article, you might want to first before you read his response:

Elaine – Thank you again for sharing the full report from the anonymous “experts”. It is entirely incorrect to state that the “district spent $10.5 million more than it budgeted as allege.” The “on-behalf” payments are an intra-state transfer from the state treasury direct to TRS. Those funds were never received by the district nor spent by the district. In 2006 and 2007 a statutory amount was reflected, but in 2008 the state engaged in an actuarial computation which was necessary given the large and growing under funded pension system. I was told that past comptrollers always omitted the amount as it is not part of our working capital or restricted funds. The state, I am told, uses this figure in overall education funding to enhance their effort in showing how they “support” public education. These are not education dollars, but rather pension dollars for future retiree benefits. Page 62 of the audit reflects an amount of “revenue” of $10,410,849 while page 66 shows a like amount as an expenditure. By stating the larger gross figure than what we actually receive (and throughout the state), it inflates how much the state really spends on education. With respect to the deficit fund balances, the Medicaid operations fund and Mid-Central Assoc. fund are merely cash flow issues. We provide services (an expense) but are often not reimbursed in a timely manner, thereby resulting in a deficit fund balance. I am also told that the Municipal retirement/social security fund balance deficit has existed for some time and the district is “whittling away” at it so it doesn’t have to levy for it, which, while within their rights, causes taxes to rise. The Self insured workman’s comp reflects the extremely large number of comp claims filed and is why the Board voted to establish a Tort levy. I voted against the levy because the amount carried as a liability is an estimate provided by our third party administrator (TPA). I felt we should better manage and be more proactive in mitigating workman’s comp claims and only levy once the outcome of all these pending claims are known. These anonymous supposed “experts” also make ridiculous assumptions that “if an expense was incurred the previous year, it is probable that it will occur again the next year”. With all the work being done to balance a budget and the dynamics of various program changes, that is an ill-founded assumption, at best. The group does raise legitimate questions on certain line items that warrant clarification and I will be following up to address those. For example, our Board has been frugal in spending, yet page 69 shows budgeted salaries for “Board of Ed Services” of $71,085 and an actual amount spent of $395,008. I am told that salaries for “Board initiatives” are booked here. I am asking for clarification and a breakdown. I will follow-up with more when I receive answers. I encourage you to affirm or deny the source of this “report” being our auditors, as some are suggesting. Whoever the source, they are wrong to suggest that we “spent $10.5 million more than” we budgeted, as you state in your opening sentence. Thank you for your concern on behalf of our students and our community. For more legal advice see: http://goodwinbarrett.co.uk/how-to-claim/. Jim

I appreciate Jim responding publicly, and he offers some very helpful insight. However, someone who wishes to remain anonymous takes issue with Jim’s comments:

The disclosure of the TRS revenue and offsetting expense by the state of Illinois on behalf of the school district is a required disclosure in the audit. Laymen may not understand that since it washes out or in Stowell’s case even like it, but by generally accepted accounting standards it must be reported that way as it has been for years! Stowell’s statement that it wasn’t budgeted before is grossly in error and personally shows how shallow his understanding. Consequently there should have been a budget though this year Cahill forgot it apparently and CG was required to highlight it!

I don’t know generally accepted accounting practices, so I’m not going to weigh in on this. All I can tell you is that the audits of the past few years haven’t looked too good, and I’m glad to see at least one board member taking these issues seriously and asking questions. Thank you, Mr. Stowell.