The Controller-Treasurer for Peoria Public School District 150 is Guy Cahill. His contract, which took effect in February 2005, expires June 30, 2008. Renewal of Cahill’s contract was on the agenda for the last school board meeting, but at the last minute was removed from the agenda, so no vote was taken. I have no idea why that happened, but since we have some extra time to consider Cahill’s performance, let’s look at the performance goals in his 2005-2008 contract.
[Section 1] d) This Contract shall be a performance-based contract. The Controller-Treasurer, Deputy Superintendent and School Board shall mutually agree to financial improvement goals to enhance student performance and academic improvement, the goals shall be attributable to the responsibilities and duties of the Controller-Treasurer. The goals shall be attached to and become a part of this Contract as Appendix A. One goal shall be the removal of the School District from the Illinois State Board of Education Financial Watch List by June 30, 2006 It is understood that the attainment of this goal is not solely within the power of the Controller and the attainment of this goal will be judged based upon the efforts of the Controller-Treasurer to attain this goal and not necessarily upon the actual removal of the School District from the Financial Watch List within the time period.
And here are the performance goals as listed in Appendix A:
- Develop FY’06 Budget and present in a meaningful way for use by management as a decision-making tool; include, as necessary, “other sources” of funds to ameliorate expenditures exceeding revenues.
- Streamline and organize general ledger to facilitate improved reporting to the Board.
- Restructure depository and bank accounts to improve efficiencies and reconcilement.
- Provide periodic reports to the Board including statements of position, budget to actual, and cash flows.
- Develop long-range budget projections including revenue and expenditure estimates.
- Facilitate Structural Budget Imbalance Task Force work.
- Develop and implement necessary short-term financing strategy to address cash flow concerns and shore-up reserves.
- Provide leadership in developing and negotiating wage and benefit components of collective bargaining agreements.
- Develop a system and/or train staff individual to monitor compliance with state and federal grants and review the same for propriety.
I’m not going to go through each of these line by line, but I do want to point out some information that’s available through the Illinois State Board of Education’s website — that is, District 150’s audits. In the June 30, 2007, audit (large Excel file), there is a section called “Schedule of Findings and Questioned Costs,” and it includes these statements:
In an ideal control setting, the District would have personnel possessing a thorough understanding of applicable generally accepted accounting principles staying abreast of recent accounting developments. Such personnel would perform a comprehensive review procedure to ensure that in the preparation of its annual financial statements that such statements, including disclosures, are complete and accurate. […] The District has not made it a practice to send District officials or other personnel to training classes to update them on the on-going changes and complexities of generally accepted accounting principles.
That’s pretty serious. But there’s more; this finding is listed as a “repeat from prior year,” meaning it was identified before but has not been resolved:
The overall internal controls over the District’s accounting system are not adequate to ensure that misstatements caused by error or fraud, in amounts that would be material to the financial statements, may occur and not be detected wtihin a timely period by employees in the normal course of performing their assigned functions. […] Reconciliation of many of the general ledger accounts to the underlying supporting documentation was not performed during the year (accounts receivable, payroll withholding liabilities, miscellaneous asset and liability accounts). […] Significant errors and/or omissions were not discovered by District employees and corrections were not made to the general ledger until the annual audit was performed at the end of the fiscal year. This resulted in inaccurate financial information being recorded in the general ledger for most of the year.
And, this was concerning as well, also a repeat from the prior year:
The District did not submit accurate [project] expenditure reports. Some expenditures claimed were either non-allowable, misclassified, reported inaccurately, or required additional documentation to trace to the underlying general ledger accounts. Total expenditures as reported on the project completion report were greater than total expenditures on the general ledger.
In the 2006 audit, there was a grant compliance problem. “The district claimed more administrative costs than were allowable on the Reading First grant.” Specifically, “The District claimed $20,577 of general administration expenditures,” but “allowable general administrative expenditures should have been $16,556” — a difference of $4,021.
This year, things have gotten worse regarding federal grant compliance. You may recall that District 150 spent $681,000 in Title I funds that the state said were not allowable. And District 150 is still very much on the financial watch list.
I think it’s worth asking how much of this is the responsibility of the Controller-Treasurer, and how much he should be held accountable for these (what I consider to be serious) problems which seem to be ongoing and increasing in severity. I trust the school board is doing just that, and perhaps that’s why the contract renewal was removed from the agenda.
CJ, as painful as it is to read the details in black and white, this just had to be said. Congrats to you for putting it all together in a neat little package. It would be a shameful act for anyone who has any relevance or influence within the District to overlook or explain away the facts you have just published.
I am prepared to give the Board of Education the benefit of the doubt, and [hope] that it is these circumstances that prompted them to put the Cahill contract renewal on hold.
Cahill’s replacement could be the first in a series of steps that would allow our district to slowly work its way towards recovery and respectibility.
I can tell you this, the budget was shared by “school budget experts” and they were very concerned there was something fishy about District’s 150 budget. They said there are many things in that budget that should be questioned. Just know these experts were retired superintendents that managed their own budgets for years. I can not give names or where this budget examination took place, but someone else present that is in administration from Pekin, said “Now you know why we got rid of Cahill”. I do want to point out that Hinton should know this budget backwards and forwards, regardless of who the business manager is. In any superintendent’s financial class, it is taught that the buck stop’s with the superintendent. I don’t think Hinton knows anything about the budget process. He is Cahill’s supervisor and he should know more than Cahill. Oh, but wait, Hinton is a home town boy who graduated from Manual H.S. so we should trust him. Sure.
THE TWO KENS
Before the board makes any decisions about Cahill they may want to think about what happened at Enron and consider the general similarities, although yes, the magnitude and scope are far less.
Enron collapsed while Kenneth Lay, Enron’s CEO, was at the helm. At the time Lay claimed he did not know that Mr. Skilling and Mr. Fastow were doing anything wrong. Jeffrey Pfeffer, a professor at Stanford’s School of business when assessing the outcome said:
“The story of Enron is the story of unmitigated pride and arrogance,”
Could the same be said for District 150?
You say no, because Enron was a large corporation and the actions of these men caused major financial ruin, for not only the company employees but shareholders nation wide. You say there are no similarities because District 150 is not going to bankrupt the city or stakeholders…or will they?
Do you think there is truth to the expression “…as District 150 goes , so goes the city..”
When you read some of the questions asked during the Senate hearing you may start thinking about the magnitude of a failing school system. You may weigh the ramifications of so many bad decisions and conclude the financial health of District 150 is not only the responsibility of the treasurer, Guy Cahill, but that the liability falls squarely on the shoulders of Ken Hinton and the School Board.
Managing District 150 is truly a big deal- maybe not as big as Enron- but for 13,000 students, 150 million tax dollars, and for a city of 113,000 people- District 150 counts for something.
During the Enron hearing the following questions were asked.
Where was the Board of Directors while this was happening? Were they brain dead, or just kept in the dark?
What about the accounting firm?
District 150’s auditor’s negative findings were not limited to the 2006-2007 school year. Many of the same findings were present in the 2005-2006 audit. You have to ask yourself – why would the auditors, Clifton Gunderson, offer an “unqualified” opinion if there were so many findings? And what does the management letter say?
We need Ken Hinton and the school board to take responsibility for this mess as well as those administrators responsible for the many failing schools.
lovekids: My understanding is that there is a document called the “Management Letter” which can be generated when the audit is conducted. This management letter is voted up or down on the authority of Hinton and/or Cahill. That said management letters have been voted down for the past three years under Hinton and Cahill have been at the helm.
Would any of these former ‘Supers’ give any additional insights to the benefits of the management letter… and what it actually entails? Thanks! 🙂
George (the original NOT Jacob): Well said — we were both writing at posting simultaneously.
BTW: Thank you for the compliment the other day.
I agree that the TWO KENS are analagous.
I also think that the two tailors (Hinton and Cahill) have similarities to the two tailors who made the Emperor’s (BOE’s) clothes and the little boy (some taxpayers) continue to point out that there are no clothes while the two tailors take the taxpayers’ gold.
Peoria is in a serious situation and iceberg sightings in this area are increasing.
Would anyone have any suggestions as to what the average “Joe” could do to help make sure that if, in fact, the district does replace Cahill, they replace him with a competant and independant thinker as oppossed to another Hinton yes man?
Let us not forget that it was Cahill (with the support of Hinton) that disregarded the terms and provisions of the collective bargaining agreements on three occasions resulting in the District having to pay well in excess of $500K to the teachers and cafeteria workers to settle the grievances.
Let us not forget that it was Cahill with the approval of Hinton and the BOE, that eliminated the Purchasing Department and with that, an internal control system of checks and balances to help prevent employee fraud and theft.
Let us not forget that it was Hinton and Cahill who committed over $877K to purchase the properties on Prospect prior to having a signed, binding agreement with the Peoria Park District.
And let us not forget that it was Cahill who pushed for the purchase and implementation of the very expensive Skyward computer system that now, as cited in the Title I audit, we find “did not maintain a comprehensive accounting system that will adequately record all expenditures including salaries and benefits charged to the grant and had experienced difficulties generating payroll records and other subsidiary ledgers specific to the grant for reconciliation to the general ledger accounts.” We don’t even have to go into the problems staff have experienced with Skyward with student records, report cards, employee records, etc., etc. This is likely why, when Pekin terminated Cahill’s services, the next thing they did was to get rid of the Skyward system.
And George, for anyone who knows Hinton, your Enron analogy is almost prescient, especially your citation of the quote: “The story of Enron is the story of unmitigated pride and arrogance, . . .” Those words describe Hinton’s personality to a “T”.
Amen! Prairie Celt, Amen!
PC: In other words, remember to not extend/renew Cahill’s contract — is that what you are writing?
If they let Cahill go and keep Hinton that will be absurd! – What progress have they made?
Recently, I had dinner with a member of District 150’s Foundation board- and they told me they are not impressed with Hinton and several members of the school board. Good to know, but how do we get the public to see the shortcomings?
Houston we have a problem…crash
So why isn’t the Journal Star printing all of this in the paper since it should be news and inquiring minds want to know why Cahill’s contract renewal was removed from the last board meeting? Does the Journal Star have journalists any longer?
I like his name… let’s give him a raise!!!!
Why the BOE would extend contracts for Hinton, Cahill, Hannah, Sanfilip, O’Brien, Broderick, Chumbley, and Simpson defies logic. They have had 4 years to improve finances, student achievement and staff and community relations. That’s 4 years they have frittered away. The district is in worse condition today than it was in August 2004 when Hinton rode in on his “white horse” (sic) to save everyone.
This past week, the preliminary ISAT results were released by the state. Had there been improvement in overall student achievement Hinton would have shouted it from the rooftop of the Administration Bldg. Instead, the only thing we are hearing from Wisconsin Avenue is silence.