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McKeel’s defective accounting, its 70K beach junket, and “you’re fired”

November 13th, 2013 7:36 am | by

Back in August, the Florida Auditor General published a report that named the three McKeel schools as among just 25 charter schools in Florida whose audit reports included findings that “were considered by the CPAs to be material weaknesses in internal control.”

The McKeel schools were the only Polk charter schools so cited. That’s right, nobody else. Not Lakeland Montessori. Not Lake Wales Charter. Nobody else.

Material weakness is a specific, technical accounting term. Here’s a shorthand definition from Investopedia:

When one or more of a company’s internal controls, put in place to prevent significant financial statement irregularities, is considered to be ineffective. If a deficiency in an internal control is thought to be of material weakness, this means that it could lead to a material misstatement in a company’s financial statements.

This does not mean there is anything actually wrong or misstated with the financial statements. But it means an auditor might not be able to catch it if there was because of a lack of effective financial reporting controls. Or so I understand. Please, accountants, correct me.

What are the nature of the McKeel schools’ deficiencies of internal control? Why does only McKeel among Polk schools have them? Where is the audit that identifies them? I don’t know. The state report doesn’t specify. But of the 445 charter schools operating in Florida, the McKeel schools are 3 of only 25 in Florida with “material deficiencies” in internal financial reporting controls. Why?

I do not think The Ledger reported this audit finding. In fairness, the reporters were neck deep in LPD world at that time. And this would have been easy to miss. I certainly did. But the Tampa Bay Times did flag it in an Aug. 13 blurb I happened upon today.

The timing is fairly significant because of grievance #1 in the investigative report of McKeel Superintendent Harold Maready, which revolves around a meeting held just a few weeks after the state report was released.

On September 16, 2013, during a meeting of McKeel administrators and potential administrators, Mr. Maready said to [high school assistant principal] Dan Backes that he was “fired” for suggesting that the summer conference be held at the schools to save money.

The summer conference in question, you may remember, is a beach retreat for school personnel. It cost $70K back in 2010 and drew a lot of public flack.

Lest you think Maready was joking about the firing, consider this from the investigation:

After the meeting, someone heard Mr. Maready gruffly tell Mr. Backes not to make any more suggestions about the beach conference. Mr. Backes was very upset about the comment, and felt that the beach conference was an appropriate point to discuss and that Mr. Maready tried to humiliate him in front of his peers…[Maready said] the summer conference has been going on for 10 years, 98 percent of teachers like the conference and it kicks off the start of the new year.

Put aside the grievance for a second and ask a potentially bigger question. Why did Backes think the McKeel schools need to save money? He doesn’t mention public perception of the trip or worry about teacher time away from family. He’s concerned about the cost and its impact on the McKeel budget. Why?

This beach junket is a well-established, decade-long McKeel tradition. Maready’s wrath is well-established. Why would Backes risk what happened to him if he didn’t have a very good reason to suggest saving money?

Did Backes’ question have anything to do with the audit finding? I don’t know. But I bet my peeps at the Ledger could find out.

And at the very least, they might answer this question: How is that a STEMMY school system so obsessed with money that it builds its disciplinary program around a mock banking system has the only three schools in Polk County that can’t balance their checkbooks? Accountability indeed.

Various McKeel defenders like to tut tut about how it runs on less money per pupil than the Polk District. Really, how can you tell? Maybe, just maybe, you ought to ensure your school has a clean audit and meaningful financial controls before you make that assertion.

 

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4 Responses to “McKeel’s defective accounting, its 70K beach junket, and “you’re fired””

  1. Jim Says:

    “Why did Backes think the McKeel schools need to save money?”

    Maybe because every company and organization in America discusses ways to save money? Sit in on an Apple board meeting and you will hear discussions on ways to cut expenses. This is not a new concept.

    “How is that a STEMMY school system so obsessed with money that it builds its disciplinary program around a mock banking system has the only three schools in Polk County that can’t balance their checkbooks?”

    Who said they can’t balance their checkbooks? The audit reported concerns over internal controls, not over the ability to balance the books. This could be something as simple as a chain of command for the handling of cash. Obviously things like that need to be corrected, but it takes a great leap of faith to suggest that they can’t balance the checkbook.

    “Various McKeel defenders like to tut tut about how it runs on less money per pupil than the Polk District. Really, how can you tell?”

    Because it’s a fact that McKeel runs on less money per pupil and it’s a fact that the McKeel system still has its doors open for business. Do you have any evidence suggesting that payroll checks aren’t clearing or that debts can’t be paid? If those kinds of concerns existed, McKeel would have appeared in other sections of the report that you cited. The McKeel financial health is a matter of public record. I’m sure you could find it if you truly wanted the answer to your question.

  2. Kevin Kayden Says:

    Wow, it’s happening again. I wrote about it back in 2009:
    http://www.theledger.com/article/20090901/NEWS/909015004

    At $70K/year, just from 2009 through 2013, that’s over $280,000, and you’re starting to talk about real money, or at least enough to cover another presentment sealing.

    Also, it might be worth remembering that some of those years were a time of financial downturn for the overall Polk County School system, yet they were still “living large” over there at McKeel. Did you mention the open bar? Are they still doing that?

  3. rae jackson Says:

    Someone should look into the funds they are getting for their ESE students.

  4. Jim Says:

    Kevin, that is very hypocritical. While McKeel was allegedly “living large” by spending money that was well within the budget on teacher conferences, the PCSB was in “financial downturn” because of their own stupidity. Like the time they flew a team to the midwest to set up at recruiting fairs while they were cutting teaching positions at the very same time. Or like the absurd amount of money they spend on district administrators who have continued to….”lead”….a failing district.

    McKeel can afford things like the summer conference precisely because they broke away from the PCSB’s archaic way of blowing money on nothing.

    As for the open bar, zero dollars from McKeel’s budget pays for that. You people need to do your homework.

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