Showing posts with label Gloucester County Public Schools. Show all posts
Showing posts with label Gloucester County Public Schools. Show all posts

Friday, January 29, 2021

Gloucester County, Virginia's Real Estate Tax Deception

In January 2020, the latest of Gloucester’s real estate reassessments became effective. The overall value of Gloucester real estate changed from $4,391,807,486.00 to $4,659,865,396.00, resulting in an increase of $268,057,910.00 in overall value. At the current tax rate with the new assessment, the County gets an increase in real estate tax revenue (Money going into the County’s coffers) of approximately $2 Million.  
Shortly after this reassessment, the County and Board of Supervisors began budget deliberation for the FY 2021 budget, which covers the period of July 1, 2020 thru June 30, 2021. The County built this budget based on the increase in overall real estate tax revenue even though they did not hold a Public Hearing or vote on it until December 1, 2020, over seven months after the budget was approved.

During the budget deliberations and after, there was a big push to increase the local retail sales tax to provide money for various School System Capital projects. (Building new buildings parking lots, ball fields, renovating, replacement, repair, and such type projects.) The pushed narrative that increasing the retail sales tax would prevent real estate taxes from going up and would spread some of the Capital expense burden to people outside Gloucester who use Gloucester businesses and services sounded like a pretty darn good idea but for one thing, real estate taxes did increase, and they knew it the whole time they were spreading the deception. The biggest factor that allowed them to get away with this was the lack of Conservative Gloucester citizens who follow and engage in what is going on with our local government.

The County had the option of lowering the real estate tax rate to set it in line with the Real estate tax revenue it took in the year before. If they had, it would have resulted in the real estate tax rate being lowered from $0.695 per $100 in value to $0.659 per $100 in value. A $0.36 per $100 of value decrease in the rate. On December 1, 2020, five of our illustrious Supervisors voted to keep the $2 Million instead of lowering the rate. The two Supervisors who voted against this deception were Mike Winebarger of the Petsworth District and Phillip Bazzani of the York District.

On top of the real estate tax deception, five Supervisors voted to allow the School System to borrow nearly $6 Million to fund some of its Capital projects they were also claiming, at the same time, would be funded by the retail sales tax increase. Again, Winebarger and Bazzani voted against borrowing the money. The retail sales tax increase was passed by the voters in the November 3, 2020 election. This will give the School System another $5 Million, plus or minus, annually. The increase goes into effect July 1, 2021.

Below are links to where you can see and hear this information for yourself. I encourage everyone to visit these links.

Kenny Hogge, Sr. 

December 1, 2020 Public Hearing on the real estate tax Deception:

$6 Million Dollar loan public hearing:

2019 Land Book:

2020 Land Book:

Thursday, January 28, 2021

Gloucester County and GCPS Employee Lodging Costs

The following SlideShare Presentation shows lodging costs for Gloucester County and Gloucester Schools employees for the period of July 2018 thru May 2019. 

Monday, October 5, 2020

How Gloucester County, Virginia Taxpayers' Money Is Spent/Wasted. This can't go on.............

Not long ago I published an article demonstrating how some of our local tax dollars are spent/wasted. (Click here for article.) Even before publishing that article, we began looking at the County’s and School System’s use of Purchase Cards. Purchase Cards are commonly referred to as Credit Cards and in the instance of our local government, they are known as P-Cards.

Currently we are in possession of copies of P-Card statements from June 2019 thru June 2020 that the County charged me over $200 to obtain through a very deceptive, time-consuming, and frustrating Freedom of Information Act (FOIA) process. Nevertheless, we have been able to conduct a general review of the statements and are well on our way to building spreadsheets that will enable us to take a much closer look at how our tax dollars are being spent. We also intend to ask our local government to allow us to review and copy some of the supporting document files for some of the charges. I say some of the supporting document files because it would literally take us weeks if not months and several hundred dollars or more in FOIA fees to the County to scrutinize such a magnitude of files. Transparency is expensive in Gloucester County.

What do we know about Gloucester’s P-Cards in general? We know a P-Card was used by the person convicted of stealing from the School System’s bus garage. (To read two related stories, Click here and click here.) We know thousands of purchases are made every month. We know some of the charges are payments for goods and services procured through a competitive bidding process. An example of such procurements is pizza from Domino’s for school lunches once a month. We know P-Cards are used to make purchases in other countries like Germany, Canada, The United Kingdom and Ireland. We know P-Cards are used to travel all over Virginia and to Florida, Georgia, Louisiana, Texas, Arizona, California, Pennsylvania and other states. We know there are employees who use the P-Cards appropriately and we know there are ones who abuse them. We know we have more to learn and we are doing so.

I guess it’s time to tell you how much money we are talking about. From June 1, 2019 until June 30, 2020, they charged and paid off $4,437,897.19. Thus far, we have determined those charges were made by over 100 different P-Card holders but will not know the exact total until more work is done. Let’s look at some other things we have learned so far.

The following are the amounts spent per month for three consecutive months and the total spent each month on just a few Merchant Categories (MCC) of goods and services. (Purchases rounded to nearest $100)

$442,337.33 was charged during June 2019.

Airlines – $1,300

Lodging – $10,500

Meals – $1,500

Cox Communications – $40,300

Verizon – $11,800

Amazon – $21,500

Local Walmart, Food Lion & Kroger – $2,600

Organization Memberships – $955.10

Coffee Service – $300

Computer Software - $11,500

$695,379.49 was charged during July 2019.

Airlines – $2,400

Lodging – $10,700

Meals – $3,100

Cox Communications – $38,200

Verizon – $2,500

Amazon – $22,400

Local Walmart, Food Lion & Harris Teeter – $3,400

Organization Memberships – $4,900

Mulch and Lawncare – $700

Coffee Service - $200

Computer Software - $5,700

$293,198.46 was charged during August 2019.

Airlines – $4,900

Lodging – $3,700

Meals – $2,000

Cox Communications – $38,100

Verizon – $4,500

Amazon – $23,300

Local Walmart and Food Lion – $4,200

Organization Memberships – $10,000

Mulch and Lawn Care - $33,000

Coffee Services - $200

Computer Software - $600

There was a heck of a lot of money spent each month on air travel, lodging and meals. The examples above do not include reimbursements for cash receipts and do not reflect parking fees, tolls, fuel costs, car rentals, taxi fares, bus rentals, etc. related to travel. There were multiple people traveling every month throughout the 13-month period we are studying.

We pay Cox Communications a lot every month as well. The amount does not seem justified considering the number of people in the County who get no benefit from their service. I believe the same can be said about Verizon.

As for Amazon, Walmart, Food Lion, Kroger, Harris Teeter and a huge number of other suppliers, we will have no idea what all of that money was spent on until we get a look at the supporting document files for the charges. Rest assured, I will share whatever we find, good and bad. You can see more suppliers in the copies of P-Card statements I have provided in the SlideShare presentations below.

Organizations and memberships is another tax dollar eating category. Most of these organizations bring no direct benefit to Gloucester taxpayers and in some instances, they work against the citizenry and are downright Socialist and or divisive in nature. Examples of such entities are: Virginia School Board Association, Virginia Association of School Superintendents, Society For Human Resources,  National Alliance of Black Educators, National School Board Association, Virginia Association of Elementary School Teachers, Virginia Parks and Recreation Association, Realtor Association, Association of International Certified Professional Accountants, Virginia Association of Governmental Purchasing and too many more to list here. You can click on each organization listed to visit their website. I encourage you to take a look at each of them.

The amount of tax dollars spent on Mulch and Lawncare services is, in my humble opinion, absolutely ludicrous. There seems to be plenty money to spend on luxury and unbeneficial things, but not enough to keep our schools maintained.

The County and School System have initiated an all out campaign to entice Gloucester residents to vote in favor of raising the local retail sales and use tax. They are disseminating flyers on social media that are full of deception. The words “may”, “potentially” and “probably” are words of uncertainty and lack of commitment and are used throughout their flier. If this tax increase is enacted it will not only provide the School System with a blank check for as much as $100 Million, it will also pave the way for a meals tax increase. Did you know Gloucester has already increased the lodging tax to raise more tax dollars for Recreation and Tourism? It’s true.

It is time for our School System and County to be forced into becoming fiscally responsible. We The People of Gloucester were ignored during the recent Public Hearing on the School System borrowing nearly $6 Million. This can never be allowed to happen again. The whole Public Hearing was nothing more than a sham and is not how government in the USA is supposed to work. Not one Public Comment speaker spoke in favor of the borrowing, yet every Supervisor except Mr. Winebarger and Mr. Bazzani voted yes to approve it. Mr. Winebarger and Mr. Bazzani voted no. This time they cannot ignore our voice. Let’s send them a clear message this year by voting “NO” on the tax increase and send another message next year by voting several School Board and Board of Supervisors members out of office.

Written By: Kenny Hogge Sr

Gloucester Point, Virginia

A few interesting transactions that we intend to look at further.

06/06   74208474X00072Q9D      JIMDO HAMBURG                                $240.00

06/06   74208474X00072Q9D      FOREIGN TRANSACTION FEE              $2.40

JIMDO Hamburg     Website and webstore hosting from Hamburg, Germany.

07/22   24755426O3HM5N9Y2     FERG CENTER FOR THE ARTS           $600.50

07/23   24040836QS66JG33B        SWIFT CREEK MILL THEATER           $442.00

Ferguson Center for The Arts

Swift Creek Mill Theater

08/27   24692167F2XDZV3Z6         SAN DIEGO ZOO WEB STORE           $725.00

San Diego Zoo We Store


Saturday, May 27, 2017

UPDATE: Rumors Turn Into Guilty Plea (Rumors Of Theft In Gloucester County Public School System)


Last May we published an update to the story below about “rumors” of theft within the Gloucester County Public School System (GCPS); in which we reported information contained in the May 17, 2018 edition of the Gloucester Mathews Gazette Journal.

According to the Gazette’s local court case information, “Larry Clark Lawson, 56, 668 Fickle Fen Road, Mathews, was indicted on two felony counts of wrongfully and fraudulently use, dispose of, conceal, or embezzle property having a value of $200 or more, belonging to Gloucester County, March23-April 19, 2017”

The property has been reported to be two welders owned by GCPS and the theft appears to have been initially covered up by Mr. Lawson’s supervisor who retired shortly after the indictments.

We have just learned from public records that Larry C. Lawson pleaded guilty to one of two counts of embezzlement on January 4, 2019. The public records indicate the next hearing is set for April 23, 2019 for Presentence Report. Once someone is convicted of a felony in Virginia, the judge will order a Presentence Report. Presentence Reports are prepared by a probation officer and include various family, background and employment information about the defendant. Sentencing should follow soon thereafter.

Unfortunately, it appears Mr. Lawson and his supervisor will continue to receive Virginia retirement pay and benefits. Shouldn’t Mr. Lawson have been fired when the thefts were discovered instead of being told to bring the property back and directed to retire? Shouldn’t he and his supervisor forfeit all pay and benefits and be forever barred from any form of government service? We think so.

We will continue to follow this story and keep you updated. As always, feel free to contact us with instances of public corruption in our local government and public-school system.

Kenny Hogge, Sr.

One year ago we published the story below about “rumors” of theft within the Gloucester County Public School System (GCPS). According to the May 17th edition of the Gloucester Mathews Gazette Journal; “Larry Clark Lawson, 56, 668 Fickle Fen Road, Mathews, was indicted on two felony counts of wrongfully and fraudulently use, dispose of, conceal, or embezzle property having a value of $200 or more, belonging to Gloucester County, March23-April 19, 2017”

In the same edition of the Gazette Journal there is an article about the retirement of Mr. Lawson’s supervisor, who according to the “rumors”, told Mr. Lawson to return the property and submit his resignation/retirement. If this part of the rumors is true, shouldn’t the supervisor be indicted also?

We will continue to follow this story and keep you updated.

Rumors Of Theft In Gloucester County Public School System
Several days ago we heard a “rumor” about a welder being stolen from the Gloucester County Public School (GCPS) Bus Garage. According to the “rumor”; someone working for our public school system stole a plasma welder from the bus garage and once the theft became known, the thief was told by administration to bring the welder back, submit their resignation and no charges would be filed. The “rumor” further alleges that the employee has enough time in local government service to retire and the “resignation” has actually turned into retirement for the thief.

That is a very ugly rumor and appears, “if” true, to be another prime example of our laws being applied selectively. If you or I walked into the bus garage and walked out with a screwdriver, law enforcement would be called; we would be arrested and prosecuted. End of Story. The same should happen to this thief if the “rumor” is true and they should forfeit their retirement benefits. Search warrants should also be executed on all of the thief’s properties to make sure they haven’t stolen other property owned by us. 

We sent an email to GCPS Superintendent, Dr. Walter Clemons, asking if he could confirm whether or not the “rumor” is true. Dr. Clemons replied, “I am unable to comment or provide information regarding employee personnel matters.  However, please know that any matter that we discover or are made aware of involving employee misconduct is investigated by our Department of Human Resources and reviewed by our school board with actions taken as deemed appropriate.  We also notify law enforcement on certain matters when necessary.” 

I guess his answer speaks for itself; they are not going to tell us anything under the cloak of employee privacy. I wonder what determines when they, “notify law enforcement on certain matters when necessary.” Do you think you or I would be investigated by human resources and our case reviewed by the school board before they notified law enforcement? I don’t think so. If this “rumor” is true and the thief remains uncharged and is not prosecuted, it will also be another clear example of how disengaged from reality and lawfulness the administrators of our public school system and our school board really are.
As bad as it sounds, this is not the ugliest “rumor” about our public school system that we have been following. In April 2014 and after considerable research that was ultimately stonewalled by the school system, we sent an email to the School Board in which we addressed a rumor spreading through the community about the theft of gate admission money at school sporting events. We also provided the findings of our research to the school board and offered suggestions to correct each identified shortcoming. It was not received well at all; imagine that.

Our public school system activity funds usually involve almost $1.5 million per year and are not monies from the school system's annual budget. Activity fund money comes from student parking fees, sporting and other event admission fees, club fees, money from fund raising, some scholarships, etc.

We will soon provide everything we know about the activity fund investigation. In the meantime, take a few minutes to share the rumor about the welding machine thief with others in our community and while you’re at it send a quick email to the school board and board of supervisors letting them know we know about the “rumor”. Here are their email addresses.

Board of Supervisors' email address: 
School Board email address: 

Click here to read more stories about our wonderful Gloucester County government, public school system and other topics:

Friday, March 17, 2017

Gloucester County, Virginia: The Consolidation Deception

Gloucester VA Links and News: The Waterline At Page Middle School:  Disaster Wai...

Gloucester County, Virginia: The Consolidation Deception.

When we elect and hire people to manage our tax dollars, we do so with the expectation that those folks will take care of our money just like, if not better than, they manage their own financial affairs. We expect them to use our money to provide necessary services, build and maintain our infrastructure, educate our kids and take care of the employees they hire.

Several years ago I and other Gloucester County, Virginia residents began suggesting that our school system and county government consolidate services as a way of reducing costs and getting more bang for our tax dollars. The way things are now, we are paying for two finance, vehicle maintenance, buildings and grounds, information technology and human resource departments. So far we have heard a lot of promises and witnessed lost opportunities. Not so long ago the school system’s finance and human resource directors resigned. Instead of capturing the opportunity to consolidate finance departments and human resource departments with the county, the school system promoted one of their finance employees to director, increased her pay and hired a new human resource director.

The Board of Supervisors (BOS) and School Board recently spent tens of thousands of dollars to have a study done on where and how much it will cost to build a consolidated vehicle maintenance and utility yard facility. When the county and school system left public works, buildings and grounds and all other industrial type functions out of the equation, it was the first signal that they had no intentions of consolidating anything; that is until the consultant publicized pictures of the county garage. Now it appears they are forced to consolidate vehicle maintenance or to at least act like they intend to do so. At this point it also looks like they are trying to cut corners by wanting to reduce the amount of bus parking space and number of maintenance bays that were recommended in the study.

Once the study was completed and presented to the school board, they sent the consultant back to the drawing board to create a scenario in which the utility department’s yard was left out of the consolidation plan. When the BOS and school board met together to discuss the transportation study, it was quickly evident there were members of both boards who were not pleased with the consultants findings because they have other intentions for the old Page and bus garage land. As the meeting progressed, both boards pushed the utility department yard right out of the picture. In fact, Supervisor Ashley Chriscoe said the utility department can make due with what they have now. I find that completely absurd. The utility department needs new facilities just as bad as the school system needs a new bus facility and the county needs a new vehicle maintenance facility. Take a look at the pictures in the slideshare presentation at the end of this article to see a glimpse of how neglected these areas of our infrastructure are. Gloucester resident Howard Mowry told the BOS during a recent public comment period that hazmat and the fire marshal need to condemn the county garage that is located at the intersection of Providence Road and Route 17. Look at the slideshare pictures and you will understand why he said it. Better yet, take some time to visit these public facilities. You will quickly realize the pictures do not show the whole view. 

The utility department not only needs a new yard, they also need a new office. The office they currently occupy on Carriage Street in the Courthouse area has a basement that is full of black mold due to moisture problems. The building was formally the health department building until they were moved because of the mold issues. I know I would not want to spend eight or more hours a day in a building with such mold issues; would you?

When I suggested consolidating all industrial type functions, I suggested doing so on the old Page Middle School and bus garage properties. I also suggested building a strip mall type office building on part of the front portion of the land to provide office space for the consolidated departments. I suggested dedicating a portion of the land for a future fire and rescue facility. Neither board seems to care for my suggestions just like they didn’t seem to care for the results of the study they spent our tax dollars on. The funny thing about the study was; even though the two boards limited the amount of land on the old Page property that could be utilized for the proposed facilities, the consultant made the facilities fit and demonstrated that it would be several million dollars cheaper to build on the old Page and bus garage properties than on the new Page property. The two boards have now added what they are calling safe ingress and egress requirements by claiming the T.C. Walker and Route 17 intersection must be turned into a four way intersection and land must be bought from Harry Corr before a consolidated facility can be located at the old Page site. Well, these so called “requirements” are not requirements at all. It is just their way of running up the cost to build on that site up so they can justify moving the bus garage off the property.

It would seem there are members of both boards who want the school board to give the old Page and bus garage land to the county to be part of some “so called” economic development plan that they have not shared anything about with the general public. Is it just a coincidence that a local developer and school board member is leading the effort to completely abandon the land? I don’t know about you, but I don’t believe in coincidences. I do believe fulfilling our infrastructure needs and providing safe decent workplaces for our employees is far more important than filling a couple of greedy people’s pockets.      

Our local government and school system could easily eliminate between five and seven department heads if they would create and implement a comprehensive consolidation plan and eliminate other unnecessary departments and positions. Tax dollar savings from these reductions alone would be in the neighborhood of $1 million annually.

It is time to reduce the size of our local government and school system administration and reinvest in our infrastructure. If we don’t, real estate and other local taxes will continue to rise and areas of our infrastructure will fail; resulting in more wasted tax dollars.

Be sure to check out the slideshare presentation and after that you will find a video of the BOS and School Board discussion on the transportation facility.

We encourage all Gloucester residents, landowners and business owners to actively follow our elected and employed local government representatives and administrators, and hold them accountable for their actions. Remember, all levels of government work for We The People.

Let us know what you think and share your Gloucester government related stories by emailing us at or by posting remarks on the Facebook post that led you here.

Kenneth E. Hogge, Sr.
Gloucester Point, Virginia
Helping To Drain The Swamp

Sunday, September 14, 2014

Gloucester, Virginia School Activities Funds Accounting Nightmares

Greetings Doctor Clemons and School Board Members,

About a year ago rumors began to circulate about the possible misuse or theft of Gloucester County Public Schools’ (GCPS) athletic event entrance fees.  After hearing the rumors persist for a few months I and other Gloucester citizens began to take a look at how Activities Funds are handled.

On April 29, 2014 concerns pertaining to GCPS Activities Funds were presented to the School Board via email.  During the May 13, 2014 School Board meeting it was announced that a presentation and review of activities and athletics, audits, etc. would be scheduled for the July or August meeting of the School Board. The presentation actually occurred at the September 9, 2014 School Board meeting.

From the presentation it looks like some positive steps are being made to enhance accountability of Activities Funds.  However, the biggest deficiency seems to be those responsible for oversight (The School Board)being disengaged.  Based on the questions various board members asked, it is clearly evident they have not gone to the schools and witnessed first hand how Activities Funds are handled.  Another issue that should be explored is the School System’s reason for having its audit combined with the County’s.  Ms. Wright stated it was because of inconsistencies in reports that were received from the previous Auditors the school system procured independently.  What were the inconsistencies?  Were the other Auditors seeing shortcomings not normally pointed out by the currently used Auditor who has also been the sole Auditor for the County for several years?

(Excerpt from Audit Report)
Basis of Accounting
We draw attention to Note 1 of the financial statements, which describes the basis of accounting.This financial statement is prepared on the cash basis of accounting, which is a basis of accounting other than accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to that matter.
Accounting for over $1.4million annually using accounting procedures not generally accepted in theUnited States of America does not seem very responsible.  Are there “best practices” accounting procedures that could be implemented?
(Excerpt from Audit Report)
In accordance with Government Auditing Standards, we have also issued our report dated August 15, 2014 , on our consideration of County of Gloucester , Virginia School Activity Funds’ internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering County of Gloucester , Virginia School Activity Funds’ internal control over financial reporting and compliance.
In this excerpt the Auditor speaks to the scope of testing.  What is the test ratio used to determine how much of what is looked at during the audit?  The Auditor makes it clear that the audit is not a comprehensive analysis of internal control over financial reporting or on compliance. Who does a comprehensive analysis and how often?  Maybe a committee made up of students, teachers, School Board members,  bookkeepers and parents should be created to provide monthly oversight.

(Excerpt from Audit Report)
Internal Control over Financial Reporting
In planning and performing our audit of the financial statement, we considered County of Gloucester, Virginia School Activity Funds’ internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statement, but not for the purpose of expressing an opinion on the effectiveness of County of Gloucester, Virginia School Activity Funds’ internal control. Accordingly, we do not express an opinion on the effectiveness of County of GloucesterVirginia School Activity Funds’ internal control.
In this excerpt the Auditor makes it clear that the audit does not measure how effective or ineffective internal accountability procedures are.  If the annual audit does not measure compliance or effectiveness of internal accountability then who or what does? A monthly review committee could also provide oversight in this area.
(Excerpt from Audit Report)
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies.Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
In the excerpt the Auditor makes it clear that the Audit is not in depth enough to identify all instances of theft or misuse and acknowledges that theft or misuse may exist.  Amounts of money in question in the Audit Report should not be considered when deciding whether or not accountability procedures are being followed.  Only procedures followed in comparison to policy, the number of noted shortcomings in comparison to the sample ratio, shortcomings from previous years and any mitigating circumstances surrounding the shortcomings should be considered when determining if a further look is necessary.  An overall compliance determination cannot be made using only the Annual Audit Report. For all the Auditor or anyone else knows, there could be discrepancies involving tens or hundreds of thousands of dollars because oversight by the School Board is nonexistent.  Again, a monthly review committee could effectively provide that oversight.
(Excerpt from Audit Report)
Significant Accounting Policy:
The accounts and records of the school activity funds are maintained on a cash basis reflecting only cash received and disbursed. Therefore, receivables and payables, inventories, accrued income and expenses, equipment, and depreciation, which are material in amount are not reflected, and these statements do not present the overall financial position or results of operations. Minor additions and replacements of furniture and equipment intended to be paid for out of normally recurring income are included in costs and expenses in lieu of depreciation on the statements of cash receipts, disbursements, and balances.
In this excerpt the Auditor is stating that the School System’s Activities Funds Financial Statement is incomplete. It lacks quantified material values which are necessary to properly account for equipment, supplies, etc.  Are there policies and methods in place to account for the Activities Fund’s material inventory?
(Excerpt from Audit Report)
All Schools
Due to the nature of school activity funds, there is an inherent risk of misappropriation of assets associated with the lack of segregation of duties over the accounts, records, and financial reporting. Although this risk exists, the costs of segregating these duties would likely outweigh the benefits. We recommend those charged with governance and management implement review procedures and other monitoring activities to mitigate the risks associated with the lack of segregation of duties.
The above statement has been included in at least the last five years audit reports.  The following was provided in the presentation and is not included in the actual Audit Report contained in the online Agenda Packet.
(Excerpt from Presentation Slide)
School activity funds across the Commonwealth of Virginia have an inherent risk associated with the lack of segregation of duties over their accounts, records and financial reporting. An inherent risk is in the environment due [to] the lack of an accounting department in a school. By default, the fiscal responsibilities are typically handled by the school bookkeeper and reviewed by the individual school principals and certain school board staff and members. This review and oversight by management and those charged with governance mitigates the risk associated with this lack of segregation of duties. This inherent risk is present in every school activity fund across the Commonwealth of Virginia . This statement does not “suggest that there has been a continuing history of non-existent procedures and monitoring activities” It serves to report to management and those charged with governance about the importance of their involvement in the fiscal matters of the school activity funds to provide oversight and review activities. Ann Wall, Robinson, Farmer, Cox Associates
None of the audits performed by the Auditor within the last five years contained a scope directing or requiring an analysis to identify reoccurring or continuing shortcomings, trends, etc.  Each and every report for the last five years contains the following pointed statement:

(Excerpt from Audit Report)
We recommend those charged with governance and management implement review procedures and other monitoring activities to mitigate the risks associated with the lack of segregation of duties.
The above statement explicitly recommends the” implementation” of review procedures and monitoring activities. The Auditors have continually used the word “implement”, not other words like improve, enhance or continue.  Of course such a statement in a single report does not suggest a continuing history, but five years worth of reports containing the same statement certainly does exemplify that appearance.

Thank you for responding to the concerns previously presented.  In closing I would like to recommend the following link to Fairfax County’s policy pertaining to activities funds.  FairfaxRichmond and numerous other localities have comprehensive policies that could be used as models in developing policies here in Gloucester County.

Kenny Hogge, Sr.
Gloucester Point

Wednesday, April 30, 2014

Gloucester, VA Potential Issues With School Activity Funds

Certain allegations of misappropriation and theft of school activities funds prompted me to take a look at how activities funds are managed and accounted for within Gloucester County Public Schools.  Accounting information and annual audit reports for school years 2009-2010, 2010-2011, 2011-2012, and 2012-2013 were reviewed; Reconciliation Reports for school years 2008-2009, 2009-2010, 2010-2011, 2011-2012, and 2012-2013 were reviewed and a question and answer meeting between Ms. Wright, Howard Mowery and I was conducted.  Study findings are as follows:
The “Report of Audit Findings and Recommendations” section of all four yearly activities funds audit reports contained the following recommendation statement:
“Due to the nature of school activity funds, there is an inherent risk of misappropriation of assets associated with the lack of segregation of duties over the accounts, records, and financial reporting. Although this risk exists, the costs of segregating these duties would likely outweigh the benefits. We recommend those charged with governance and management implement review procedures and other monitoring activities to mitigate the risks associated with the lack of segregation of duties.”
This statement seems to suggest there has been a continuing history of non-existent review procedures and monitoring activities.  The audit reports reflect that GCPS handles over 1.5 million dollars annually; making the above yearly statement unacceptable by any stretch of imagination.  The following is from the Virginia Administrative Code:
8VAC20-240-40. Audits; monthly and annual reports.
School activity funds (internal accounts) shall be audited at least once a year by a duly qualified accountant or accounting firm approved by the local school board and a copy of the audit report shall be filed in the office of the division superintendent. Monthly reports of such funds shall be prepared and filed in the principal's office, and annual reports shall be filed in the office of the principal or division superintendent. The cost of such an audit is a proper charge against the school operating fund or school activity funds.
Statutory Authority
§§ 22.1-16 and 22.1-17 of the Code of Virginia.  
Over the four year period studied, the auditor identified various discrepancies in the areas of admission ticket sales, cash money and check turn in requirements, identifying Certificates of Deposit as “public deposits”, signature requirements for checks, activity account sponsor procedures and transfer voucher requirements.  Considering the sample rate used by the auditor; these compiled discrepancies should have prompted a closer look at the management and accountability of activities funds much sooner.
GCPS’ current policies and guidelines pertaining to managing and accounting for activities funds are inadequate and leave numerous doors open for theft and misappropriation.  Policies should be reviewed and updated post-haste to reinforce the accountability and security of the large amount of money involved.
The current accounting system used by GCPS is antiquated, cumbersome, unreliable and should be replaced post-haste.  An attempt to FOIA complete accounting records for a period of five years resulted in a reply that estimated it would take eight hours at $20.00 an hour to compile each year’s information. The cost of obtaining this information prevented obtaining it, therefore it should be understood that a complete study could not be accomplished.  Software upgrades should be performed post-haste to reinforce accountability and security of funds.  There are several software companies that focus on K-12 activity funds management and accounting. The KEVgroup and Active Network/Blue Bear are two such companies.
The current method of managing and accounting for ticket sales is antiquated and unreliable.  Abandoning the roll of tickets that can be purchased by anyone at Wal-Mart method and implementing an online/bar code system will enhance accountability significantly.  Many of these systems can be integrated into management and accounting software. There are several online ticket sales software companies that address K-12 needs.  Blackbaud and ThunderTix are two such companies.
All four year’s activities funds audits were conducted by the same accounting firm.  Using different firms to conduct annual audits may enhance security and accounting.  Procurement of such services should be limited to periods of no greater than two years at a time.
There appears to be no system in place to verify whether or not funds are spent on their intended purpose, especially at GHS.  An example of such are; funds generated from the sale of parking decals.  Below are the numbers for the parking decals at GHS for the four years studied and the school systems response to what the money is used for.
 Left                                                                                         Remaining
From                              Receipts         Disbursement           at End of Year
2008 = 24,292.57……..22,145.00………903.80…………2009 = 45,533.77
2009 = 45,533.77……..21,450.00…….45,992.02……......2010 = 20,991.75
2010 = 20,991.75……..17,112.00………703.20…………2011 = 37,400.55
2011 = 37,400.55……..18,674.00……..7,785.00…..…….2012 = 48,289.55
From Ms. Wright:
The parking fees collected from students are used for parking lot improvements at the high school when accumulated funds are sufficient and to purchase the decals.  The fees are approved by the school board annually.
As you can see; GHS takes in an average of around $20,000 per year from parking decal sales.  The average cost for the decals is around $800.00 per year.  In five years GHS can potentially accumulate as much as $96,000.00 in parking decal revenue.  If the money is only spent on decals and parking lot improvements it should be one jewel of a parking lot.  Why is this money being spent on what should be a capital needs item?
GCPS’ systems for managing and accounting for activities funds appears to be flawed to the point that it would likely take a forensic audit to achieve clarity of what has and is occurring with respect to accountability and management of the funds.  Such an audit should be performed for all years allowed by the Code of Virginia and the Records Retention Act.  Conducting such an audit will determine the validity of activities funds theft and misappropriation claims and will provide a means to recoup some, if not all of what was lost should said claims turn out to be valid.  The potential for theft or misappropriation of funds not only exists, it is probable.
Companies provided as examples in this report are not recommendations or endorsements by me and are only provided for demonstrative purposes.
Kenneth E. Hogge, Sr.
Gloucester Point

Randy (George) Burak, Gloucester School Board Responds;

Mr. Hogge,
Can you provide me when and where the “allegations of misappropriation and theft of school activities funds” occurred? I have been on the board for many years and have never heard of a question or issue associated with these funds  regarding the issues noted. I am not saying things could not be improved, since that is our constant goal to always improve the ways we do things, but to state that there are outstanding allegations associated with inappropriate behavior and misappropriation of funds is a larger step. I am willing to meet with anyone that suspects such activity to discuss and review any evidence that supports such allegations.
Thank You
Randy Burak  

Our Notes:  What Mr Burak clearly fails to realize here is that Mr Hogge never made any allegations.  He was simply following up on allegations that he had heard through the grapevine.  This should seem very clear to anyone having read the Mr Hogge's letter above.  It is very interesting that Mr Burak should take such offense or is it that Mr Burak is trying to cover or hide something?  Only a question.  

Further Response from Mr Burak.

Mr. Hogge,

I asked since these are serious allegations and want to clarify them  and  understand if these allegations have any backing why they were not shared earlier. I am confident that there has not been or is any misappropriation of funds regarding this issue or anywhere else within the school system  which is monitored and validated annually and in the open. Because of the seriousness of these allegations I am surprised that they would be shared with members of the community in lieu of the board so appropriate investigations can be performed in a timely manner.

It is unfortunate that these allegations are made without the opportunity to clarify them or their origin, putting good hard working people who work and support our community and our children each and every day in a negative light for no good reason(s) .

Have a good evening
Randy Burak

Our Notes:  We have to ask, exactly where is it even relevant about the allegations?  If there are issues in the way that a substantial amount of money may be open to theft, then it would seem warranted to try and do something about it right away.  And again, Mr Hogge has made no allegations of any kind.  He clearly stated that based on allegations heard, not something Mr Hogge made, so he was prompted to research school activity funds and how they are presently handled.  Yet Mr Burak is stuck on allegations made and not something that was heard that prompted Mr Hogge to investigate.

  It is issues like this that should make one very concerned with those in charge of our school system.  It is this kind of dangerous thinking or lack thereof that flows downhill and into the classrooms and corrupts the minds of the children and we wonder why little Johnny and Linda can not think for themselves?

  Everyone may find it very interesting to note that Mr Hogge's work is based on information that came from within the county itself through FOIA.
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