County commissioners receive bids for Ennis School District audit

A forensic audit of the Ennis School District’s finances for the last seven years would cost between $19,000 and $60,000 based on proposals submitted to the Madison County Commissioners.

“It’s certainly a lot less costly than what was predicted when many of the people who were putting input into the discussion,” said Madison County Commissioner Dave Schulz.

The county commissioners solicited the audit bids after a joint meeting with the Ennis School Board in April. At that meeting the school board members and commissioners decided to solicit bids for two types of audits: a less comprehensive audit would look at expenditures related to the new school building project; a forensic audit would be a detailed look at several funds within the school district’s budget dating back to the 2004-2005 fiscal year.

The school board at the time felt a forensic audit would be too expensive and felt a look at expenditures related to the new school would be adequate. However, the board also expressed to the commissioners that they would cooperate with any kind of audit. The question was who would pay for it.

At the April meeting, Schulz said he felt the school district should pay for the audit and he feels the same today.

However, in April there was some speculation that a forensic audit, like the commissioners were pushing for, may cost more than $200,000. That appears to not be the case as two of the accounting firms that submitted proposals said they could do the forensic audit for about $25,000.

The question of a special audit has been part of the discussion surrounding the controversy with the Ennis School District for the last three years. However, when Montana Attorney General Steve Bullock issued an opinion saying that building a new school building with adult education and transportation funds was illegal, one of the remedies he outlined involved looking at the school district’s books.

At April’s meeting, school board attorney Elizabeth Kaleva said Bullock’s opinion referred to an accounting of the finances, which is less comprehensive than a forensic audit.

However, the county commissioners felt Bullock’s opinion opened the door for a forensic audit and that only an in-depth audit would answer questions still swirling in the community about what the adult education and transportation funds were spent on.

The commissioners approached four accounting firms about submitting bids for each type of audit. However, one firm declined to submit a bid, Schulz said.

“Three of them communicated back with a statement of qualifications and a cost to do both levels of audit and one firm communicated back and said they weren’t interested,” he said.

The commissioners have passed on the bids to Ennis School Board chair Lisa Frye, who is hoping to put discussion of the audit and bids on July’s regular meeting agenda.

“But basically that will be just to set up a joint meeting with the (county) commissioners,” Frye said Tuesday. “That should be the next step.”

The question of doing an audit was central to the recent school board election, with all candidates supporting the idea.

In other school board news, a special meeting is scheduled for this Thursday at 5 p.m. to discuss issues related to the Montana Teachers Retirement System claims against the school district and superintendent Doug Walsh.

Last summer TRS ruled that Walsh hadn’t officially retired back in 2001 and needed to repay retirement benefits received since then, along with contributions to his retirement for his work with the school district since 2001. TRS also ruled the Ennis School District should have paid into Walsh’s retirement as well for the years since 2001. In total, TRS ruled that Walsh owed about $572,000 and the school district owed about $189,000.

Both Walsh and the school district appealed the ruling to the TRS board. A hearing on the appeal was set for August, but that has been postponed.

Thursday’s special meeting was requested by Ennis School District attorney Elizabeth Kaleva, who said she needs the board to decide on a few aspects in regards to the school district’s appeal.

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