Examiners cite Birmingham schools for financial problems

<p>A state audit of the Birmingham Board of Education found numerous financial problems, including multimillion dollar errors, salary overpayments, and improper tax deductions.</p><p>The report, issued Friday by the state Department of Examiners of Public Accounts, found some records so incomplete that the states chief examiner, Ron Jones, said, We were unable to determine the accuracy of the amounts reported as transfers in and transfers out of the General Fund and the aggregate remaining funds.</p><p>Normally at the end of an audit, the examiners list all missing or misspent funds and which officials should be responsible for repaying the money, but Jones said that part of the audit is still being completed.</p><p>In response to the auditors report, Interim Superintendent Waymon Shiver Jr. said the states third-largest school system has made many changes in its accounting procedures to make sure records are now correct.</p><p>Please be assured that the Birmingham City Board of Education will continue to make every effort in complying with the rules, regulations and laws set forth by the State of Alabama, Shiver said in a statement.</p><p>The examiners audit covered Oct. 1, 2001 to Sept. 30, 2002 _ a tumultuous period when Birmingham changed from an appointed school board to an elected school board, when the school system experienced serious financial problems, and when Superintendent Johnny Brown left to become superintendent in DeKalb County, Ga. Shiver has served since May 2002.</p><p>Browns Georgia office was closed Friday for the holidays, and he could not be reached for comment. When the examiners began their audit last year, Brown complained that the new school board was trying to make him a scapegoat.</p><p>The examiners found:</p><p>_The school boards accounts receivable was overstated by $191,347. The amount due from other governments was overstated by $4.3 million, and other receivables were overstated by $1 million.</p><p>_At least $93,203 in salary overpayments were made to employees whose records were not properly maintained. The biggest example was a terminated employee who continued to receive paychecks for nearly a year, collecting $32,009.</p><p>_In addition to the individual overpayments, school system records indicate that board employees were paid twice for Aug. 7-30, 2000. The examiners did not specify the amount.</p><p>_Payroll records for the 2001 calendar year did not agree with federal tax records. Employees from the state Department of Education worked with the school system to provide correct records for the 2002 calendar year.</p><p>_Payroll records couldnt be reconciled with retirement system records, with a difference of $2.5 million.</p><p>_The former superintendent was paid a $500 monthly travel allowance from January 1998 until August 2000, although his contract didnt provide for it.</p><p>_The former acting senior accountant raised his salary by $1,986 per month without authorization, but later repaid the money.</p><p>_Personnel files in some cases did not contain the employees contracts, date of hire, or payroll information.</p><p>_Payroll department employees were allowed to enter their own payroll data. Withholdings for retirement benefits were not withheld properly for four department employees, totaling $21,986.</p><p>_Numerous employees were enrolled in the state health insurance program for education workers but were not contributing the proper amount of premiums. Examiners said the records were so incomplete that a reconciliation was not performed between amounts withheld and amounts billed.</p><p>_State and federal income taxes were not withheld properly from some employees. Some payroll and personnel department employees claimed to be exempt from federal and state taxes. One financial official who earned more than $100,000 annually and another making more than $60,000 annually claimed to be exempt.</p><p>_A lack of records made it impossible to substantiate travel expenses by some employees.</p><p>_The school system made loans to individuals totaling $275,453, even though state law prohibits it. Of that amount, $2,711 was not repaid as of Sept. 30, 2002.</p><p>_The school systems central office and some schools made numerous purchases of unallowable items, including greeting cards, gifts for retirees, flowers for the mayor and City Council, and membership dues for non-educational civic organizations. The examiners did not list a total amount.</p>

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