Draft Of Independent School Report On Hold For Possible Adjustments

By John Voket

Question: When is an audit not an audit?

When it is reclassified as a “Procedures Engagement Report.”

When it is provided in draft form to the individual or agency being targeted, so it can be reviewed.

When said agency and/or individual has an opportunity to fix or “clarify” items of concern.

If you answered “all of the above,” you would correctly sum up the status of the current, independent audit, or “report,” being finalized for the Board of Education. And it appears that at least some of the original concerns pointed out by a Waterbury accounting firm in the $13,000 reporting process may never be revealed to the taxpayers who paid for it.

That is because, according to the school superintendent and a school board member who called for the study, the document is still a “work in progress,” or in “draft” form. And the company preparing it was told to give school officials an opportunity to review it and provide any redress or clarifications that might be available so those concerns might be retracted before the final product is delivered.

Because of its current “draft” classification, the information within that draft can be denied to the press and public under current Freedom of Information statutes.

And while a Freedom of Information spokesperson said that “draft and memo” clause in the law is frequently and inappropriately invoked, a representative from the auditing firm confirmed that at press time, some further “adjustments” might still be forthcoming from the school district that would affect the final report.

Following requests and inquiries about the pending study made during the Board of Finance budget deliberations, Board of Education member Paul Mangiafico said the document was still being prepared by the Waterbury-based firm of Konowitz, Kahn & Co. Mr Mangiafico told the finance board on two occasions in recent weeks that a representative of the accounting firm verbally reported information from his preliminary findings, but the final report was not yet available.

On March 7, The Newtown Bee filed a written FOI request at the Board of Education offices to receive or review a copy of the report as soon as it was delivered. After several follow-up inquiries, The Bee was told earlier this week that a draft of the audit was on-hand at the school offices.

Upon requesting a copy, or to review the findings in person, the newspaper was told initially by a administrative assistant that the draft would not be made available, and that the district had sought a legal ruling on the matter and was under no obligation to release or reveal the “draft.” In a subsequent phone message, Superintendent of Schools Evan Pitkoff told The Bee that the report was a “work in progress,” and that the public was not entitled to hear about findings in the report until it was finalized.

“That is why it is a working draft. It is being asked for clarification by the [school board] members,” Dr Pitkoff said.

The superintendent said he would make himself available to discuss the audit, “after it is finalized.” But David Grindell, a representative from Konowitz, Kahn & Co. working on the project, said the audit had been reclassified.

“It’s not really an audit, it’s actually being called a Procedures Engagement Report,” Mr Grindell said after being contacted last Tuesday. The accountant said that after an initial call from the newspaper, he was contacted by a Newtown school official, and was authorized to tell the press that the study was still in draft form.

“There may or may not be further adjustments,” Mr Grindell said. “My partner on the job had already made adjustments [to the original findings].”

When contacted about the issue, First Selectman Herb Rosenthal said the process of allowing an audited agency or official to review a draft and possibly influence changes or clarifications was “unusual.”

“I can’t say much when the organization that produces a report says it’s a draft,” Mr Rosenthal said.

In September 2005, Mr Mangiafico convinced his peers to spend $13,000 for the independent audit of district accounting, business practices, and procedures in the wake of two specific local incidents, as well as several other high profile regional incidents involving the theft or alleged theft of funds from school systems and municipalities.

Mr Mangiafico subsequently confirmed the local incidents included an allegation of misappropriations of funds by a former drama and chorus teacher in the high school, and another incident of theft at the town landfill. He also referenced two multimillion-dollar fraud cases involving school district officials recently on Long Island.

Despite the fact that the school district already budgeted almost $17,000 to another auditing firm already on retainer for both the district and the town, Mr Mangiafico said the district and Newtown taxpayers deserve a “second opinion,” from an “independent and unaffiliated source...to ensure that we are managing [school] financial practices in a responsible way.”

Mr Mangiafico, said at the time that he felt justified in making the request for the audit because he believes to date, “policies regarding the submission of original receipts with [reimbursement] requests from special events and activity accounts are not being followed.”

Mr Mangiafico said at the time of his request, and repeated as recently as this week, that he wanted an unaffiliated and “uninterested” opinion on district procedures, and was not necessarily interested in utilizing the district’s auditing firm of Kostin, Ruffkess & Co., LLC that is already on retainer at $16,896. The Waterbury firm producing the independent study, he said, has never worked for the town and, in fact, has never audited a school district before.

“We wanted a firm not connected with the town or school district to come in and take an unbiased look at our internal bookkeeping procedures, checks and balances to highlight any weaknesses, to ensure we have the proper controls in place, and that they are being implemented successfully,” Mr Mangiafico said. “[The school board is] spending 72 cents of every tax dollar and as a taxpayer, I want to be able to have a higher level of confidence that the system is working. It’s our fiduciary responsibility to every taxpayer.”

Mr Mangiafico said the independent firm had already been paid $6,500 for work already performed, and that he was going to inquire about when to expect the final report, which he assured would be provided for review and discussed among the Board of Education members, and other interested boards in town.

The school board member said the adjustments that were made so far, likely involved preliminary findings that were reviewed by Dr Pitkoff and school Finance Director Ron Bienkowski.

“Ron asked for time to be able to understand what [the report] was saying, and wanted an opportunity to produce missing information,” Mr Mangiafico said. “[The board] encouraged Ron and Evan and our employees to give the auditing firm any assistance they required.”