Joint Finance Committee demands clearer school accounting after audit finds $2 million discrepancy

Karen Pica, a volunteer analyst who presented the committee’s budget review, told the Northumberland County Joint Finance Committee that a forensic audit and her own review of school financial reports showed gaps and inconsistencies that need to be resolved before the county approves the next school budget.

Pica said the county approved about 97% of the school board’s requested appropriation last year but that subsequent line-item changes and a superintendent reallocation raise questions about where money was moved. "That money likely is what should be returned to the county," Pica said of roughly $2,000,000 she found missing from posted revenue reports following a November revision, adding that the school’s posted reports and the school finance system did not match.

The discrepancy and multiple accounting irregularities were discussed by members of the Board of Supervisors on the committee and by other attendees during the meeting, which focused on two agenda items: process transparency and a budget-management quarterly review. Committee members emphasized transparency and timeliness in the budget process and pushed for better documentation before a final budget vote.

Pica outlined three categories of concern from her review: (1) staffing and position documentation, (2) monthly revenue and expenditure reporting, and (3) funds that are running in the red. She told the committee that the superintendent’s post-approval allocations funded a 3% salary increase and roughly a 7.2% insurance increase while the board had cut about $613,000 from the original school request, and she questioned how both outcomes occurred without clearer accounting of available revenue.

Pica described an instance in which a posted revenue report was revised, removing about $2,000,000 and several accounting lines. She said she asked the finance director, who sought additional detail, and that the revision has not yet been reconciled in the public records. Pica said the missing revenue likely represents reimbursements that were recorded in a different fiscal period, but she emphasized the lack of documentation: "There is no documentation to show that would be true," she said.

County staff and supervisors discussed options to increase transparency. Latrell, a county staff member, said the county could post questions and answers on its webpage for the joint committee because the county does not have access to the BoardDocs system used by the Board of Supervisors: "We could post them on our web page, in some fashion because we don't have a board docs," Latrell said. Several participants urged more frequent committee meetings to reduce turnaround time on follow-ups.

Other committee members echoed the audit’s finding that several school funds — described in the meeting as federal funds and possibly cafeteria-related accounts — are currently showing negative balances and may be at risk if anticipated reimbursements are delayed or do not materialize. One participant, Mr. Long, framed his criticism in terms of outcomes for students, saying, "I am attacking the school because the school has consistently had the scores for all the kids have consistently gone down." That remark was part of a broader set of public comments and debate about where budget priorities and oversight should be placed.

Pica recommended the next school budget submission include a by-category listing of filled positions and vacancies (with personally identifiable details redacted), a statement of which employees have complete contracts and HR documentation on file, and full revenue accounting for major line items. After discussing the workload of reconstructing older records, the committee refined one recommendation to request expenditure-to-date figures for the current year compared with the same period last year to give an immediate view of fiscal risk.

Committee members said they have requested corrective action plans from the school system and the treasurer’s office that identify responsible parties and implementation dates for items raised by the forensic audit. The group agreed that corrective steps must be in place and demonstrable before the county finalizes a school budget. The committee set a follow-up meeting for March 5 at 5:30 p.m. to review progress and any responses from the school and treasurer’s office.

The meeting transcript and participants’ remarks show the body focused on assembling documentary evidence and formal responses rather than taking immediate punitive action. Committee members said further steps, including possible state involvement, depend on whether the school system and county treasurer provide timely and adequate corrective plans.