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Monday Update: Accounting firm clears Hart’s transfers

Moving of $6.6M in Measure V money questioned

Posted: October 5, 2008 7:38 p.m.
Updated: December 7, 2008 5:00 a.m.

More than two years after the Hart district transferred $6.6 million in Measure V funds between accounts without proper documentation, an accounting firm found all bond expenditures from the fiscal year 2005-06 were appropriate.

The William S. Hart Union High School District hired Vicenti, Lloyd & Stutzman to examine the transfers after another accounting firm found that the district could not provide proof of complete compliance with Measure V and Proposition 39 funding sources.

“We feel very comfortable that all bond expenditures were appropriate,” Gema Ptasinski, a partner at the firm, told board members on Wednesday.

Phil Ellis, chairman of the Measure V Oversight Committee and a former Hart district governing board member, said he is satisfied with the new findings.

“The fact that it’s not an audit is worrisome, but the fact that they examined every single invoice — which they don’t do in an audit — is very positive,” Ellis said. “My recommendation to the committee will be to issue a report that these auditors indicated that the funds were spent properly.”

King, who originally recommended having another firm look into the ambiguity of the 2005-06 audit, said the new report gives the Hart district a “clean slate” in regards to Measure V spending.

“This gives us complete vindication of our spending of Measure V funds,” King said. “That’s why we brought someone else in, to prove that those expenditures were appropriate.”

A performance audit of the district’s fiscal year 2005-06 completed by Moss Adams in 2007 found the district “lacks documented proof” that the $6.6 million in Measure V funds transferred from the Bond Building Fund to the Capital Facilities Fund were used appropriately.

While the audit determined that transferred funds needed better documentation, Moss Adams did not go as far as to accuse the district of any wrongdoing. The firm recommended the district use resource codes when money is transferred. The district implemented those changes.

Moss Adams started the district’s 2006-07 performance audit when the 2005-06 results were presented to the board. Nevertheless, the firm was asked to stop its research and the board decided to put the job out to bid and search for a new auditor.

The Hart district hired Vicenti, Lloyd & Stutzman to conduct the 2006-07 performance audit and take a second look at that $6.6 million in transfers from 2005-06.

“We hired someone to go back and re-audit because the prior auditors, Moss Adams, were unable to give a positive declaration that all expenditures were appropriate,” said Board Member Dennis King, who is an accountant.

The new firm reported in May the Hart district was in compliance with the requirements of the Proposition 39 and Measure V requirements during fiscal year 2006-07. They also reviewed the $6.6 million In Measure V funds transferred during the 2005-06 fiscal year to determine that expenditures were made for authorized bond projects and were not expended for salaries of school administrators or other operating expenditures.

“This is not an audit,” Ptasinski said Wednesday. “We were employed to look at certain transfers in 2005-06.”

The firm examined 738 invoices comprising the $6,618,507 in expenditures which were in question from that fiscal year.

“Our observation was that they were all appropriate in accordance with Measure V standards,” Ptasinski said.


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