After the loss: Iowa School district back on its feet

FROM THE CLINTONHERALD.COM -

Despite being hit with two substantial financial hardships in the past three years, the Clinton School District is working its way to becoming financially sound.




First, the district was rattled in 2009 by a $1.2 million embezzlement carried out by the district’s assistant business manager, Denisa Babcock. The district’s business manager, Gayle Isaac, left the district as the investigation was beginning to take a position at a school district closer to Des Moines. A report released by the state auditor’s office showed Isaac had not practiced proper oversight of his office, allowing Babcock — now convicted — to embezzle funds for her personal benefit. While the district received $1 million in insurance payments for the embezzlement, it is waiting for another $240,000. The remaining money will all go back into the general fund to be used for education.



For current business manager Jan Culbertson, who started working for the Clinton schools one month after the embezzlement investigation started in early 2010, everyday is about moving the district farther away from the conditions that allowed the embezzlement to go on undetected.



“We still have a long way to go, but we’re a lot further than we were two years ago,” Culbertson said.



According to Culbertson, when she arrived in February 2010 to start her job as the business manager she found no balances for accounts, no bank reconciliations and a barrage of other problems. After some work, she found five out of the 14 funds the district maintained were negative.



Now, only two of those funds have negative balances, the print shop and the activity fund. While Culbertson recognizes the $600,000 negative balance for the activity fund, she is also working to correct it through detail, documentation and holding those in charge accountable, she said.



Rather than presenting the activity fund with one budget, Culbertson breaks the numbers down by individual sport and all expenditures are tracked.



Also, whenever legally possible and financially feasible, expenditures from the activity fund are transferred to the general fund at the end of the year to help cut down the activity fund deficit.



The activity fund work is one of the numerous programs Culbertson has implemented since joining the district. She also meets quarterly with building secretaries throughout the district to go over budgets and other information.



“Those people are very important to the district. If they know what’s going on, they can monitor what’s going on in their own building,” Culbertson said.



Culbertson said in addition to the work she’s doing for district financials, she’s also training her full-time four-person staff to do as much as possible so tasks are not handled by one person from start to finish.



“Before I came, none of the office personnel were allowed to do much,” Culbertson said. “Now, if I’m gone to a meeting or something and there’s a question, I’m not the only one who can answer it.”



Other steps include publicly acknowledging donations of $100 or more, giving monthly updates to the school board, tracking all school fundraisers and creating a separate bank account for the district’s self-funded health insurance fund. Culbertson received some outside perspective on her progress during the school board meeting on Tuesday when a representative from Winkel, Parker and Foster delivered the school audit from the 2010-2011 school year.



The auditor pointed out a number of changes that could be made including those to bank reconciliations relating to cash balances and internal controls.



“There were several things I had to clean up on, which I knew,” Culbertson said.



Of the information delivered in the audit, Culbertson said she is most proud of the general fund news.



“The general fund increased its fund balance by $1.95 million. I’m feeling very comfortable with that,” Culbertson said.



The district faced a second financial ding as it was still reeling from the embezzlement when the ADM co-generation plant was given an exemption from property taxes in 2011. The exemption was also retroactive for the previous year.



Because the school district was in limbo on what would happen when the ADM matter went to court, the district published the certified budget in March based on the least amount of assessed value, with plans to possibly reduce it. This budget called for a $16.86 per $1,000 of assessed value levy. After doing research and asking lots of questions, Culbertson said the district discovered a little known section of the code of Iowa that allows schools districts that have had unexpected changes in tax base through no fault of their own to receive some funds from the state. Through this, the school district will receive a little more than $244,000. Other state legislation and cost-per-pupil rates allowed the district to lower the tax levy rate by 15 cents to $16.63 per $1,000 of assessed value for the 2012-2013 school year.



“I’m very happy with the 15-cent decrease,” Culbertson said.



Overall, Culbertson said, the district still has work to do, but she’s proud of the progress that’s been made so far. She said she’ll feel even better after the district sends all of its account information to the state for review in September.



“We had a lot of work to do. We made a lot of headway,” she said, “When I came in, I had a lot of cleanup to do. I didn’t do it alone. My office has been great,” she said.