Find the cause, make the fix

By The Gazette Editorial Board

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The Iowa City school district has requested a state audit of its books in the wake of two troubling fiscal slip-ups.

Iowa City schools Superintendent Stephen Murley also has said he wants to hire an outside firm to examine how district accounting practices might be improved.

But it will take more than audits to restore district parents' and taxpayers' faith in how the district handles its finances.

Newly elected board of education members Karla Cook, Marla Swesey, Jeff McGinness and Sally Hoelscher must work with re-elected member Patti Fields and current members Tuyet Dorau and Sarah Swisher and Murley to address this issue promptly and install safeguards or ensure appropriate process changes are made.

They also should require an accounting of administrative oversight under the previous superintendent to find out why persistent shortcomings weren't fixed.

This summer, the school district announced that staff had discovered $2 million in bookkeeping errors when closing out last fiscal year, and that the district had been fined $25,000 by the Internal Revenue Service for a late payment on payroll taxes.

Both incidents have raised public suspicion about how the district handles taxpayer money, and prompted some board members to take a closer look at past audits of the district's finances.

What they found, outlined in a recent school board finance committee report, is troubling: Seven consecutive years of external audits pinpointing failures in the way the school district handles money.

For at least the past seven years, auditors with certified public accounting firm McGladrey & Pullen flagged consistent deficiencies in internal controls regarding the district's financial processes.

They noted improper segregation of payroll and cash disbursement duties, improper segregation in the handling of cash receipts and student activity funds. They remarked upon the district's lack of a formal policy for approving new vendors, and found other consistent shortcomings.

School board finance committee members have said they will meet with administrators to determine what, if any, progress has been made in correcting these persistent problems which, we must note, might not be directly related to this summer's financial errors. Murley has said those recent errors may have been caused in part by a lack of synchronization of software used by different departments.

Whatever the cause, district staff must answer for what action led to the mistakes and what lack of action caused the long-running structural deficiencies.

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