Schools Audit Committee Proposed in Maryland

Carroll County Maryland School Superintendend Charles Ecker is proposing to establish an audit committee to help the elected school board oversee the system's finances.

This advisory committee would help the school board with its oversight of the school system's processes for financial reporting, auditing and accounting, as well as reviewing internal controls and financial systems, the proposal said. The group also would help ensure compliance with board policy and other procedures and guidelines and foster regular improvement.

Among their responsibilities, members would review financial reports, help select and meet with external auditors to discuss their findings and create "an open avenue of communication between the external auditors, financial and senior management," according to the proposal.

The committee would consist of two members from the board and three from the community - among them at least one person with a background in accounting or financial management.

The proposal comes as a result of investigations into two embezzlement cases by school financial officers, one who stole over $200,000 and was recently sentenced to 15 months in prison.

This step is simply taking a page from the corproate world. Under federal rules known as Sarbanes-Oxley, public traded companies must establish an audit committee of independent directors, that is directors not employed by the company in another capacity, to review the work of the auditors hired to look into the finances of the company (another requirement).

School finances need to be reguarly reviewed. But simply looking at financial statements will not do in this matter. A key part of a financial review and an audit is to look at procedures and processes.

School board President Gary W. Bauer agreed, noting his interest in such a wide-ranging internal audit, instead of one that solely touches on hot-button issues.

Someone "should be in there looking at departments, looking at programs, looking at everything," Bauer said. "It should be the entire system."

In the wake of this story from earlier in the week, procurement policies, particuarly as related to capital budgets and materials acquisition (like textbooks, computers and such) should be scrutinized in much greater detail. Stories like Baltimore County's are not unique and the efforts of Carroll County should be replicated.