Outside review of information refutes allegations against school board

Jeffrey Peters, a certified public accountant with Williams & Company, in Le Mars, presented his findings to the board after receiving the information from the state auditor's office.

Williams & Company conducts the yearly audit for the school district.

Peters addressed the eight allegations from the audit standpoint in a letter to board president Mark Stelzer and presented it at the board meeting.

In the letter to Stelzer, Peters wrote, "Recently we received a letter from the Office of the Auditor of State for the State of Iowa, a copy is attached, outlining a list of allegations sent to them by a concerned citizen of the Le Mars Community School District. The letter did not name the individual who voiced the concerns, nor would the office share the name of the individual with me. They did indicate it was a single individual that had sent the allegations, however. At the request of Dr. Todd Wendt, we were asked to respond to the allegations."

The allegations and his responses are as follows:

* Allegation: Spending $4.8 million of cash reserves without explanation in two years.

* Response: In reviewing audit reports for June 30, 2005 through June 30, 2008 the total cash balance decreased $569,000 on the Government Wide Statement of Net Assets. The General Fund balance for that same period of time decreased approximately $1,560,000, and total governmental type activities fund balances decreased $107,000.

* Allegation: Purchasing the old Wells' Corporate office and paying for it out of the General Fund because the district was out of SILO money. This purchase was never made public knowledge by the board of education until after the fact.

* Response: The purchase of the old Wells' Corporate office occurred during fiscal year 2008 with the purchase price being paid for with SILO funds. At June 30, 2008 the SILO fund had an ending fund balance of approximately $1,682,000 after paying for the purchase and remodeling of the new administrative offices. The purchase of this real estate followed appropriate Iowa Code, including proper disclosures when required.

* Allegation: The Board refuses to publish the full salary of Todd Wendt, wages and all benefits.

* Response: Wendt's salary is published along with all staff of the district as required by Iowa Code. In addition, a complete copy of Wendt's contract with the district was approved on May 12, 2008 and was included as public information in the board meeting packet sent to the board of education, the local media and made available at the Board meeting.

* Allegation: Tax exempt organizations paid for political campaigns (SILO and two ISL elections). These were identified as Athletic Boosters, Music Boosters and the Le Mars Education Foundation.

* Response: As none of these organizations meet the requirements to be included in the audit of the school district financial statements, we are unable to respond to this allegation.

* Allegation: The board refuses to heed repeated warnings of overspending by Williams & Company.

* Response: Each year, when Williams & Company presents the annual audit to the board of education, we discuss the current financial condition and the results of operations from the previous year. It is our belief that this information is valuable and is used by the administration and the board of education to plan the future year's budgets.

* Allegation: The board and superintendent are playing the "interest game" with teachers' raises from the state. Money is issued at a later date and in a separate check.

* Response: The state does not give raises to local teachers. The state, in 2008, did authorize an additional amount of Educator Quality funds that go directly to the teachers. The district has a written agreement with the local Teachers Association as to how and when those funds are paid. The agreement calls for separate checks to be issued and only four times a year.

* Allegation: The board refuses to release the remodeling cost of the Wells' Corporate building. These numbers are hidden as increased energy costs.

* Response: The costs of remodeling were all paid for through SILO funds as allowed by law and are a matter of public record. Based upon our audit, no remodeling costs were noted as being coded as energy costs.

* Allegation: On June 9, 2008, the board went into executive session to discuss the purchasing of real estate. It agreed to make a verbal agreement to purchase 40 acres at a cost of $25,000 per acre for a total cost of $1 million. Subsequently, the superintendent and board members denied there was any agreement to purchase land from Charlie Hahn. Craig Bauerly, the school attorney, represented the board of education and also Charlie Hahn, the landowner. They allegedly agreed to keep the agreement verbal to avoid having to record any type of option.

* Response: In reviewing the minutes of the June 9, 2008 board of education minutes, the board properly documented their approval to go into executive session to discuss the purchase of real estate. The board properly exited executive session and no formal action was taken. It is our understanding that the real estate in question has not been purchased by the district.

During the meeting Dec. 8, Wendt addressed the issue of the Athletic and Music Booster Clubs and the LCS Foundation, as tax exempt organizations paid for political campaigns (SILO and two ISL elections).

He indicated the treasurer for The Citizens for Educational Excellence Committee had inquired about such contributions with the Iowa Campaign Ethics and Disclosure Board, asking whether or not it was improper for booster clubs or foundations to contribute those types of things. According to Wendt, the Iowa Campaign Ethics and Disclosure Board indicated it was not a violation of any of their rules or any ethics.

In their letter to Peters, the state auditor's office also asked that any findings of misappropriation and/or fraudulent activity be communicated to that office.