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District 113A Administrators, Board Members Clash Over Alleged Fund Transfers

Board President Mike Aurelio and Board Member Al Malley claim unauthorized transfers occurred last month—a charge Superintendent Tim Ricker and former treasurer Jay Tovian deny.

Two board members in Lemont-Bromberek Combined School District 113A accused district administrators this week of making unauthorized fund transfers—a charge denied by both the superintendent and former treasurer.

During their monthly business meeting Tuesday night, District 113A board members were presented a tentative budget for fiscal year 2012, which showed a negative beginning cash balance of $329,568 in the Education Fund. Per Illinois State Board of Education guidelines, school district budgets must show a zero or positive balance at the end or beginning of any fiscal year.

In order to “zero out” the cash balance, two resolutions for interfund transfers were presented to the board by former District 113A Treasurer Jay Tovian, who is still serving the district as a consultant to new business manager Barbara Germany.

One resolution was to move $225,568 from the Operations and Maintenance Fund to the Education Fund, while the other was to move $104,000 from the Transportation Fund to the Education Fund.

During the discussion, however, confusion arose over the date on both resolutions. According to the documents, the transfers would be effective June 29, 2011, leading board members to question whether funds had already been transferred without their authorization.

“We transferred money without a board resolution, which is a law,” Board President Mike Aurelio said during the meeting. Pointing out the June 29 date on the resolutions, he said he wanted to know the legality of transferring funds without board authorization.

Per the request of District 113A Supt. Tim Ricker, the board tabled the discussion Tuesday to seek the advice of legal counsel and ISBE officials.

On Thursday afternoon, Aurelio said he believed administrators violated Illinois School Code by making an interfund transfer in June without proper resolutions.

Board Member Al Malley said he believes the situation was caused by "shoddy bookkeeping."  

"All you have to do is look at that negative cash balance to see that they spent money they weren't supposed to," he said. "I can't say it's illegal, but it was done without [the board's] knowledge."

Both Malley and Aurelio said they are awaiting the opinion of ISBE and legal counsel to determine the next step.

In phone interviews with Patch both Wednesday and Thursday, Ricker denied that any transfers had occurred. The resolutions were offered, he said, as a way to reconcile the negative cash balance at the end of the 2011 fiscal year.

“Jay Tovian asked [during Tuesday’s meeting] to make the transfer retroactively, but the board did not take action,” Ricker said. “There is no documentation in any ledger that indicates an illegal transfer was made.”

Transferring funds was one of a number of ways the board could have addressed the negative cash balance, Ricker said. The resolutions, which were drafted by district attorneys, were just options, he said.

Due to the allegations made Tuesday, as well as pending litigation for similar allegations, Ricker said he thought it would be best to table the discussion.

A draft of the 2011-2012 budget must be on display for 30 days prior to a public hearing and board vote, which is required by the end of September. The tentative budget will likely be presented to the board again at its Aug. 16 meeting with another scenario for reconciling the negative balance in the Education Fund, Ricker said.

"We still have a balanced budget," he said. "We just need to make sure we dot all of our I's and cross the T's."

In follow-up interviews Thursday evening, Aurelio and Malley maintained their positions that funds were moved without board approval.

"This is what got the district into trouble before," Malley said. "This happened on my watch, so I want to make sure we correct it."

In a phone interview with Patch on Thursday, Board Secretary Cindy Kelly said she did not believe administrators did anything illegal.

“Based on the information I’ve been given, I don’t think anything illegal has taken place,” she said. “The district will be consulting with ISBE and our attorneys to be sure all the appropriate steps are taken moving forward.”

Board Vice President Dave Molitor also said he had not seen any evidence of illegal transfers.

“I’m disappointed by the way this has played out in the public,” he said. “As far as I know, no transfers have been made.”

Board members Lisa Wright, Kevin Doherty and Karen Siston were not available for comment as of Thursday night.

Deb Vespa, ISBE division administrator for business services, said Thursday that she has spoken with administrators regarding the negative cash balance, and is not aware of any fund transfers.

"From what has been reported, nothing has occurred yet," she said. "I don't believe they will end up transferring any funds at this point," she said.

Vespa said she is currently working with the district on other strategies to address the negative cash balance. One option, she said, is the modified accrual method.

Under the modified accrual basis of accounting, both paid and unpaid expenditures are recognized when incurred against the account, but revenues are not recordable until they become measurable and are able to finance expenditures, according to the ISBE website.

"Checks will sit in funds and will show up as payable, but won't be sent out until money is in the funds," said ISBE spokesperson Mary Fergus.

After consulting with attorneys and ISBE officials over the next week, Ricker said the district would put together more information on addressing the negative cash balance.

Amanda Luevano (Editor) July 22, 2011 at 12:56 PM
What conversations? I had these conversations on the phone between Wednesday and Thursday. I can only report what I'm told be each individual, and as it stands the administration still denies any transfers and Malley/Aurelio content that money was moved without board approval. During an interview yesterday, Deb Vespa said she was told there were no transfers. By the way, I'm updating the article to include some other details. Mostly just to make it as balanced as possible. The context has not and will not be changed.
Amanda Luevano (Editor) July 22, 2011 at 01:02 PM
She was at the same meeting I was.
Lee Ristow July 22, 2011 at 01:02 PM
No transfers were made? But the money has been spent? And no checks will bounce? No overdrafts will occur? Hmmm, seems kind of contradictory to me. The money spent had to come from somewhere.
Christine Balaty July 22, 2011 at 01:26 PM
Money is still in the account; it will just be the next fiscal year on paper. The fiscal school year ends June 30. It's like starting a new check register for a new year; you start with a beginning balance carried over from your previous register. However, with schools the previous fiscal year has to "zero out" on paper so that the balance can be carried to the next fiscal year. I am not an expert, but this was my understanding of the discussion at the meeting Tuesday.
Mike Whatley July 22, 2011 at 01:26 PM
Amanda, I'll try to be more clear. I'm referring to the conversations that took place during the board meetings in regards to the discussion above. Did you attend the meeting and do you know if Janice Hoppe from Suburban Life attended as well?
Amanda Luevano (Editor) July 22, 2011 at 01:43 PM
We sat next to each other. We were both there. I spoke with Dr. Ricker on Wednesday afternoon to ask whether funds had actually been transferred illegally, as asserted by Aurelio and Malley during the board meeting. He said "no." After I spoke to Aurelio/Malley on Thursday morning, I spoke to Dr. Ricker and Jay Tovian, and both denied transfers took place.
Amanda Luevano (Editor) July 22, 2011 at 01:51 PM
Christine, this is the way it was explained to me as well.
Lee Ristow July 22, 2011 at 02:50 PM
Mr/Ms Johnson, (don't know since you don't use first name per Patch "rules"). I was at the board meeting and as I understand it, the ed fund is currently in negative numbers due to monies being already spent from other funds. The district tried to send the budget in with a negative ed fund balance but the state, (Deb Vespa) rejected that. So the administration came to the board with a request for a "back dated" resolution to cover transfers to the ed fund for money that had already been spent,obviously from other funds, hence the backdated resolution. I think there are some serious issues here, with accurate record keeping at the least and Mr. Malley and Mr. Aurelio seem to understand that while the others do not. AND that is why I voted for them!
Amanda Luevano (Editor) July 22, 2011 at 03:17 PM
Lee, just a clarification: The budget is only a draft, currently, so it would not have been sent to the state. It's ISBE policy that budgets be sent in with a zero or positive cash balance. Knowing that, the administration said they need to find a way to achieve that prior to submitting the budget, otherwise it would be rejected. That's my understanding, at least.
Mark Huegelmann July 22, 2011 at 03:31 PM
The dynamics of the new board are not confidence inspiring. We are already getting into a "he said, she said" situation with the money transfer issue. How many new arguments will ensue over the coming months? Why cannot this board work together for the benefit of our children? Why cannot they put their egos on the shelf during the board meetings? Or at least why can't we have some good news come out of a meeting? Maybe some of the interested citizens of Lemont should look into recall procedures, if there are any, for school board members. Maybe somebody left a paper clip off a document.........
pat hooper July 22, 2011 at 03:40 PM
@ mr/mrs "johnson", If that were the case, why didn't the board just go ahead and approve the request by Mr. Tovian. It appears they would have had the votes by the comments they have since made. Quoting the Patch... " Jay Tovian asked [during Tuesday’s meeting] to make the transfer retroactively...."RIcker said." I think it was prudent for board members to question the appropriateness of approving retroactive transfers and not rush into something that would be questioned later. If you read the article in the Lemont Reporter, it stated, " When asked why the board was presented with a resolution approving the transactions backdating to June 29, neither Ricker nor Tovian provided a direct answer." I would think administrators, with the experience these individuals have, should be able to explain, in detail, what, how and why bookkeeping methods are handled like they were. If you were at the meeting, you must have noticed, as I did, that Ricker was very, very quiet during the whole conversation.
pat hooper July 22, 2011 at 03:41 PM
Also, you would have heard that the whole problem started when Mr. Tovian was given the "wrong list" that he used to figure how much he needed to pay for salaries and hence needed more than he originally asked for. It did not include staff that had been released but still needed to receive some payments. Mr. Ricker is right about one thing, it is time to pay attention to the I's and the T's... I believe the board members were elected because the community needs and wants someone who will pay attention to just those details. If the web was not previously tangled they would have never gotten elected.
Mike Whatley July 22, 2011 at 04:03 PM
Amanda, I posted two responses last night that included links to the Reporter article and now they seem to be deleted. Can you tell me why and who would have done so? I think its only fair that the folks on Patch are aware of the articles from the reporter as they do have different information then you. I've attached the links once again for those that may have missed them. I would prefer folks get to see my commnets as well. http://www.mysuburbanlife.com/lemont/features/x1259736584/Unauthorized-loans-may-delay-staff-paychecks http://www.mysuburbanlife.com/lemont/archive/x121488625/D113A-Board-Fund-transfers-made-without-board-approval
Amanda Luevano (Editor) July 22, 2011 at 04:24 PM
Mike, the only comments that are removed are those that are flagged as inappropriate. I am aware of articles in the Reporter. And I actually don't know that the information is that different in some respects. We both reported what Aurelio and Malley said. Additionally, we both reported what Ricker said. As for ISBE, I stand by what I was told. I was given some information about the paychecks supposedly being delayed--it's not true, according to the district and state officials. I encourage debate and discussion on this very important issue, but I really would prefer not to comment or speculate on what the Reporter-Met printed. We do our own reporting at Patch, so I stand by that.
Amanda Luevano (Editor) July 22, 2011 at 04:41 PM
Mike, I did not delete any comments. I never even saw them. If they were removed (if you remember, this happened prior to the election), it's because they were flagged a certain number of times by other readers--the community. I'm all for holding people accountable. That's my job. However, I reported exactly what everyone said. It would be wrong to print an inaccurate headline when there is nothing proving misconduct. Right now, all I can do is report what Malley and Aurelio said, and what Ricker/ISBE said in response. The community needs to decide. I have worked very hard to stay on top of the school district, and will continue to do so. If I have evidence something occurred that shouldn't have, I will of course report that.
Amanda Luevano (Editor) July 22, 2011 at 04:46 PM
I would respectfully like to add that I have done my very best to respond to all of your comments, but I can't guarantee I'll be on here responding to things all day. It seems you are intent on holding me accountable for something, so if you have more concerns about Patch or the story, I think it would be best to give me a call (630-886-7917) or email me (amanda@patch.com). Feel free to comment--like I said, I encourage it--but if your concerns are more directed at me than the story, feel free to give me a ring. Thanks!
Lee Ristow July 22, 2011 at 04:51 PM
It was my understanding that they "ran it by" Deb Vespa, did not actually submit it.
Amanda Luevano (Editor) July 22, 2011 at 04:51 PM
Mike, I was only able to find one comment in the queue with a link. I restored it, so it should show up. If I find the other, I can put it back.
Amanda Luevano (Editor) July 22, 2011 at 05:23 PM
That's correct, Lee. Ricker and Tovian said they are in constant contact with Deb Vespa regarding the budget and finances. Not defending them at all, I just didn't want people to misunderstand what I wrote. From what I was told, the administration knew before talking to Deb Vespa that they would have the negative cash balance.
Mike Whatley July 22, 2011 at 05:46 PM
Amanda, maybe I’m misinterpreting your tone, but it seems you think me or others insinuated you reported something incorrectly. All I said was the article from the Reporter seem to have a different slant and a few different facts. An example would be where you call out Mr. Aureilo and Mr. Malley of accusing Mr. Ricker & Mr. Tovian of making unauthorized fund transfers. The Reporter said "Board members expressed concern after they were presented a resolution that would have essentially approved the transactions three weeks after they were made. Where as you said "Two board members in Lemont-Bromberek Combined School District 113A accused district administrators this week of making unauthorized fund transfers. It appears Mr.Aureilo later changed is comments to be a bit softer, but I never saw where Mr. Malley actually accused anybody. He did say he believes the situation was caused by "shoddy bookkeeping." He is free to voice his opinion. I was under the impression Mr. Malley was just asking a lot of questions. Based on the recent past I would hope folks would appreciate the questions being asked to insure Mr. Ricker and his staff are moving money around WITH the approval of the board. Doing so would only build on the many problems we are still dealing with from previous bad decisions.
Mike Whatley July 22, 2011 at 06:37 PM
Amanda, I must be hitting a nerve with somebody that has something to hide. My comments have been deleted once again. So who is it and whom are the trying to protect by deleting my comments with the links to the Reporter stories. Don't you have a way to stop this silliness. Why would the Patch allow such actions from the community if in fact it is the community doing this. Once again, adults acting like children. It's a real shame the only way they have to defend what they are doing is to try to hide the truth. Why would I be surprised.
pat hooper July 22, 2011 at 07:48 PM
I don't see where the deleted post was reinstated. Am I missing something?
Lee Ristow July 23, 2011 at 01:06 AM
Not only is Mike's original one gone, so is the repost of the links to the Met-Reporter. Apparently "some" people don't want anyone here to be able to easily find and read those articles. Not saying you did it Amanda, but maybe some settings need to be changed to prevent a small group from causing post deletions, if,as you say they are removed after being flagged by the "community". I wonder how long this one will last, especially since there is nothing "inappropriate" in it.
James L. Rooney July 23, 2011 at 01:16 AM
You do not back date a resolution to transfer funds from one line item to another. If you are short in an account,who established the amount of money that is held in that line item? If you need to transfer funds you do it at a school board meeting with all to hear why enough funds were not in that line item. What happens when the line item you take the funds from needs tjhe funds and that line item is short money because some of it was transfered? Who is doing the budget that provides for funds to be in each line item?
Amanda Luevano (Editor) July 23, 2011 at 03:37 AM
Lee, I have no power over our commenting system, unfortunately. I appreciate you not saying I did it because that would be false. I do my best to keep up with things, but local editors have a lot of responsibilities—keeping up with the comments is just one. If you can remember, we had this issue back in March before the election. Just to reiterate, per Patch policy, I have never removed comments unless they contained profanity. The best thing to do (especially on a weekend when I won't be on the site 24/7) is to email me if you think your comment has been removed. I will do my best to go back and look in a timely fashion. I can always reinstate comments that have been flagged without merit, but a lot of the time I don't even know the comment was there in the first place. Sorry for any confusion with the comment board. I know it's frustrating when things disappear, but just know that it's completely out of my control how the website is designed. Thanks and have a great weekend!
Amanda Luevano (Editor) July 23, 2011 at 03:40 AM
I've noticed comments have been flagged from readers on both sides of this issue. I would like to remind everyone to review our Terms of Use so you understand what is or is not inappropriate.
Susan Antonoff July 23, 2011 at 11:43 AM
Good job, Amanda.
Susan Antonoff July 23, 2011 at 12:21 PM
Mike, the Blog is was it is. Why don't you just repost a piece if you feel it needs to be.
Quizzical July 27, 2011 at 03:15 AM
Hurray!!!! Thank you Mike Aurelio and Al Malley for doing what you were elected to do.-watching over the finances of this district and supervise the employees of the district. Keep up the good work. I applaud your desire to see my hard eanred tax dollars go where they belong . Mr. Rickert and the former treasurer Tovian have no business telling the board what to do-they work for the board. If this were corporate America a few people whould have lost their jobs a long time ago- even if it was speculation that funds were being transferred. This is taxpayer money- we should have honest leaders holding the purse strings.Keep up the good work guys
Tim August 07, 2011 at 04:34 PM
Welcome to politics. Look at what our government is doing to the federal budget, and the general public is what suffers. Time for the sh#$ to roll up hill.

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