Tuesday, September 28, 2010

Updated: The Ethics of Oversight

The Central School Board has a problem. From their perspective, it may seem small at the moment. Having to deal with a few complaining citizens has probably always been part of the job. But they may not realize that the substance of the complaints is no longer about programs and policies. It’s really not even about education. It’s about ethics and honesty. It’s about money, and it’s about oversight.

Here are some examples of flagrant waste that concern me:

Vacation time reimbursed without authorization

Personal expense budget exceeded without authorization and personal recreational activities paid for by school district funds

Non-bond funding used for items in the original bond description.

Specified and contracted items in the bond not delivered

Concerns are growing amongst staff, teachers and now citizens about district office expenditures as well as the bond fund. And right alongside those questions we are asking where does the buck stop in the Central School District? The board should be the supreme authority, but they don’t seem to be asking questions, pushing back, or demanding accountability from the superintendant.

When the public sees evidence of wrongdoing and mismanagement in the district, and hears that the school board has let this behavior pass, we wonder how many other things have happened that we are not aware of. We wonder how the school board can not be aware. Or, assuming they might be aware, we wonder if they are complicit and approving of wasteful and harmful behavior.

Let me tell you a story. This is a story told by my ethics professor at a business college, many moons ago. It’s a true story about a local manager of a large non-profit organization and his treasurer, and it goes like this: The manager traveled much for his work, and so he got in the habit of signing checks in advance, so that the treasurer could take care of routine business when the manager was out of town.

The treasurer’s family was dealing with some major medical issues. Once when the manager was out of town, a large bill came due to the treasurer. This non-profit organization collects donations for people with medical issues or other needs. The managers have control of the dispersal of this money. So the treasurer, justifying himself by saying that the manager would probably give him the money if he were to apply for it, wrote himself a check for several thousand dollars and paid his bill.

When the manager returned, the treasurer felt a little too shy to explain what he had done, so he didn’t bring it up. The manager continued to sign blank checks as usual, and was eventually gone out of town again. At the treasurer’s home, another bill came due, and he again took money from the organization without asking by using the signed checks. This happened several times. Eventually, guilt compelled him to confess to the manager what he had done. But by then this poor treasurer had stolen many thousands of dollars.

I don’t know how this story ended for the treasurer. The professor’s point in telling it was to highlight the manager’s unethical behavior. Yes, that’s right. The manager behaved unethically by placing the control of so much money into the hands of one man, without requiring accountability. The checks actually required two signatures, to facilitate accountability, but the manager defeated that system by signing blank checks. The treasurer was guilty of theft, to be sure, but the manager was responsible for creating the environment where theft could easily occur. And an otherwise honest man found the temptation too much to bear.

Is Central School Board, like the manager of this non-profit aid group, signing blank checks? If they are not performing their duty of oversight, they are guilty of creating an environment where a person might begin to think of district funds – given by taxpayers for the purpose of educating students – as completely under his own discretion and answerable to no one else.

The Central School Board’s own policy states that the board “assigns and holds the superintendent responsible for all the administrative functions of the district” (Policy Code BCD). “Holding responsible” means verifying that a task was completed according to the agreement (for example, a budget), and when it wasn’t, requiring the problem to be corrected as soon as possible. Holding responsible can also mean reprimanding, coaching, or terminating a relationship.

To salvage its reputation, the school board should take seriously the concerns that have been brought up, and take immediate and fully-corrective action.


Anonymous said...

Good questions. I want to know the answer too!

Anonymous said...

To support your points, see this article.

In addition, financial transparency (and accountability) is something done in many places.