Wonder what Middletown's graph will look like in the coming years? Hopefully, it won't take a nosedive like Monroe's apparently will under her guidance.

Let’s be fair about this.  The treasurer can’t be blamed for the spending.  The authority to spend and the financial decisions are made by others.  However, there seems to be an incredible failure in the forecasting skills of this treasurer, and that is a cause for concern.

Oct. 12, 2011, Cincinnati.com reports:

Monroe schools placed into 'fiscal caution'

 
Do you know that the treasurer who left Monroe in a messis now the Middletown Schools treasurer. This is very scarey to me. The Middletown board must have known that she was inept when they hired her. A few months before she left Monroe, the Journal reported that she had to borrow money to make the payroll in Monroe. Is that even legal? Why would the Middletown board hire her?

http://news.cincinnati.com/apps/pbcs.dll/article?AID=/AB/20111012/NEWS0102/110130327/
MONROE - For the first time in its history, Monroe Schools have been placed into "fiscal caution" by state education officials - and it could mean budget cuts in 2012.
School officials recently announced that a $1.3 million projected budget shortfall in five years was reported to the Ohio Department of Education and that as a result the Butler County district has fallen into the state's program to maintain financial solvency through increased state monitoring.
Monroe Board of Education member Brett Guido said it was after the recent departure of a former district treasurer that the projected budget deficit for the district's five-year forecast, required by state law, came to light during an audit.
"The audit uncovered discrepancies that were not reflected in the five year forecast submitted to the state, and prompted us to contact the Ohio Department of Education about the findings," Guido said.
Guido said the discrepancies were not of a criminal nature and that no investigation has been sought from the county prosecutor's office.
"The (department) confirmed our audit would require a substantial adjustment ($1.3 million). The adjustment will result in a negative cash balance at the end of fiscal year 2012," he said.
The school board, Monroe Superintendent Elizabeth Lolli and other district officials met with officials from the state education department late last month to "develop a financial plan to meet the district's fiscal and operation requirements for year 2012. This plan will also address the district's strategy for eliminating the negative balance in the general fund and provide for future long-term financial sustainability."
Lolli said the plan might include budget cuts but what and how deep those reductions could be remains undetermined.
Monroe Schools were created in 2000 after splitting from the adjacent Middletown Schools. Since then Monroe's enrollment has doubled to more than 2,230 students.
The district now is one of only two in the Greater Cincinnati area - the other being Little Miami Schools - to have fallen into the state's financial recovery program. The initial "fiscal caution" stage is the first of three categories used by the Ohio Department of Education and the Ohio Auditor's office to assure that public school systems are operating without budget deficits for five-year projections.
Little Miami Schools are in the "fiscal emergency" stage - one of only eight in Ohio - and under full state control due to the inability of the district to persuade residents to pass new operating tax levies since 2008.

Based on 409's article, the Middletown schools would be wise to start an audit to verify she has done things properly to date. I'd be a bit uneasy knowing what she now has been accused of by the Monroe folks. Better keep a tight leash on her Middletown.......or start documenting for the purpose of termination. No one on the school board, or in this school system knew this information on this woman BEFORE she was hired?? No one asked the Monroe people about her performance or checked on her status?

This is probably a political ploy of passing the buck and blaming an easy target so that Lolli and the Monroe Schools can avoid the heat from citizens.

Also from MainStreetMonroe.com

The Ohio Department Of Education has declared Monroe on Fiscal Watch. This is an upgrade from Fiscal Caution, a condition the school has been under since November of this year.

Fiscal Watch, according to ODE Auditor Mr. Roger Harding, will be declared when a school district is in an 8 percent deficit and a fiscal emergency is when a school district is 15 percent or worse. A deficit is measured by a school district's end of year balance divided into the revenue stream. The deficit for example would be 2% if a school district had a $10 million revenue stream and a $200 thousand deficit.

Improper Posting
The entire problem stems from 'improper' posting of fund expenditures since perhaps the inception of the district in the year 2000, but likely since 2005 or later. The 'improper posting' mistake was not found out until Treasurer Kelley Thorpe resigned in July of this year when an interim treasurer (Ken Ulm) was appointed.

Financial Problem Discovered
Interim Treasurer Ulm immediately found a major discrepancy which turned out to be a serious financial problem for the school district. On Monday July 25, the Monroe School Board held an emergency meeting for the purpose of borrowing $1.4 Million to keep the district from bouncing teacher paychecks. "Monroe Local Schools needs to borrow approximately $1.4 Million to make payroll among other expenses..." said Superintendent Libbie Lolli at the time.

From there the school district finances were audited by Roger Hardin and Dean Horton of the Ohio Department of Education. Upon completion, MLS 5 year forcast was revised downward by millions of dollars as a result the school district was declared in Fiscal Caution.

The school board was required and did file an ODE recovery plan by November 30. That plan contained another revision of the 5 year forcast by newly hired Treasurer Holly Cahall. A revison downward by a additional million plus dollars. (See graph below)

As of December 15th, MLS District is officially in Fiscal Caution by the ODE. The district will likely be headed to fiscal emergency in May of 2012. Confirmed by Superintendent Lolly.


The Graph Above Shows forecasts from former Monroe Schools Treasurer Thorpe, Ohio DOE Auditor Horton, MLS School Board and current Treasurer Cahall.

More:Monroe Schools declared in Fiscal Caution

Today's Journal...

Tough problems loom for Monroe schools
District likely to end up in fiscal emergency mode

It’s a financial mess that — due to accounting errors — traces all the way back to 2005, covers a span of two treasurers, Sharron Moon and Kelley Thorpe, and now will likely result in the district being placed in fiscal emergency by the state auditor’s office.

School officials allege Thorpe — who became treasurer in June 2007 — compounded the issue, misspending money out of the Bond Retirement Fund on general fund operating costs. The first payment out of the fund that wasn’t facility-related was a $271,000 Xerox copier lease

Thorpe has declined to comment throughout this process and Middletown school officials have said they are confident in the treasurer and will wait until the state releases its report on the issue. Ernie Strawser, vice president of public finance for Baird, was brought in to conduct a financial forecast after interim treasurer Ken Ulm found bills that were still unpaid

In total, $3.1 million was misspent out of the Bond Retirement Fund. There were 33 pages of transfers to the general fund that weren’t known or approved by the school board. The remaining $1.4 million of the $4.5 million projected deficit comes from operating expenses

State auditors have been at the Monroe board office since January, and their report is expected to be filed by March 31. Annual audits performed from 2008-2010 missed the Bond Retirement Fund transfers.

Clark, Schaefer, Hackett & Co. performed those audits, and Monroe terminated its contract with the firm with two years remaining. A message left with the firm was not returned

ISN'T THIS THE SAME AUDIT FIRM THE MIDDLETOWN SCHOOLS USE? WOULD IT BE WISE TO LOOK AT THEM AGAIN, CONSIDERING MONROE JUST FIRED THEM FOR OVERLOOKING SOME MAJOR TRANSFERS? LOOKS LIKE BETWEEN MOON AND THORPE NOT DOING THEIR JOBS CORRECTLY, HAS PLACED THE MONROE SCHOOLS IN SOME MAJOR DEBT. I WOULDN'T BE SO FAST IN ENDORSING THORPE JUST YET MIDDLETOWN. YOU MAY HAVE TO TRY AGAIN, AFTER THE INVESTIGATION, TO LOOK FOR A COMPETENT TREASURER.

GS, I doubt they are in a hurry to run back to MCSD and the ongoing issues there.

Marcia Andrew wrote: The audit for the Middletown City School District was conducted by Balestra, Harr & Scherer, CPAs. (This is not the CPA firm that audited Monroe). The CAFR (Comprehensive Annual Financial Report) for the district for the last fiscal year, ended June 30, 2011, is available on the district website, www.middletowncityschools.com -- To get to it, on the district home page, click on Board Docs, then on Library, then on Treasurer's Office. The 5-year forecast for the district is also posted in that library. Marcia Andrew

Correct me if I'm wrong Ms. Andrew. Didn't the Middletown schools use the fired Monroe audit firm at one time or was it the city who used them? Might be confusing school auditors with the city. Thank you in advance.

Viet Vet, I only have knowledge to answer as to the last 12 years. The Middletown City School District has not used Clark, Schaeffer & Hackett for at least the 6 years I have been on the school board. For at least the 6 years immediately before that, I know they didn't use that firm, because one of the Middletown board members was a partner at Clark Schaeffer and so the board was prohibited from hiring his firm.  I don't know which firm the City uses or used. Marcia Andrew

Vet its beyond words as to why the school board would still let this woman work any where near Middletown Schools or their financial well being.

Vet and Bocephus, MCSD hired Kelley Thorpe last summer and her first day with MCSD was August 1, 2012.  We vetted her as we do any candidate for treasurer or superintendent (the only positions hired by the board). We talked to quite a few people in the Monroe schools and they all gave her very strong recommendations.  Monroe did not discover its current problems until after Ms. Thorpe left her position with Monroe. The state has not finished its investigation, and has not charged Ms. Thorpe with any wrongdoing. To my knowledge, no one from Monroe or the state has even contacted Ms. Thorpe to ask for her side of the story.

Before the Middletown BOE hired the treasurer, her reputation was in question. Go back into the archives of the Middletown Journal. You will want to know why they hired her in the first place.