STERLING – The Wachusett Regional School Committee has gone through some turbulence, and Audit Committee member John Kilcoyne, a member of the Finance Committee and a former Select Board member, updated the Select Board at its Dec. 20 meeting.
The most recent audit is for the fiscal year ending June 30, 2022, and shows some cash management issues, but an improvement over the past year.
Kilcoyne said that when the former superintendent of schools left in June 2022, as well as the business manager and other key officials, there were several problems that resulted, much of which was traced to inadequate staffing and too much work. These include approximately 65 bank accounts the district maintains.
Standards state that the accounts should be reconciled monthly, but that wasn’t done.
“The maintenance, monitoring and reconciling of so many accounts is a tedious and time-consuming process,” according to the management letter.
According to the business manager, in response to a question from the audit committee, the balances have been reconciled through August 2023. He said that the deficiencies in controls are being worked on.
Kilcoyne said that the balance sheet shows a $174 million deficiency, but the majority are OPEB and pension reporting requirements, rather than actual funding.
In addition, Kilcoyne said that the audit shows the budget was underestimated by about $2 million, including payroll, which left the district short handed.
Kilcoyne said that despite his questions of how the district is fixing problems with OBEB and pension reporting, he has not received an answer yet. The district’s OPEB liability is $186 million and pension liability is $26 million, which reflects how much the district could have to pay in the future, not how much it needs to pay now.
He said he hopes to have a better answer at the audit committee’s next quarterly meeting, which should be in February or March.
Kilcoyne said, in his opinion, “if there was fraud, we would have heard about it. It was just mistakes and lack of staffing.”
But Finance Committee member Joe King said he is concerned because there still is no monthly report, as required, “so I question if things are getting under control.”
Kilcoyne, who is an accountant, was known as a Select Board member for his diving into the details of audit reports.
“This audit report is not as ugly as two years ago, but it is still not in great shape,” he said of the lengthy report. The audit for the fiscal year that ended June 2023 is now underway.
