Board Financial Accountibility
By Charles K. Trainor
The recession has been punishing for school districts. Falling housing prices, rising foreclosures, historic unemployment, disappearing federal government stimulus programs, increasing health costs, and shortfalls in municipal tax revenue have all conspired to endanger public school programs.
In addition, governors and state legislators are imposing tax caps, reducing aid, and delaying or reneging on previously approved payments. On top of all of this, state and federal officials are mandating improved academic performance and increased pension contributions from beleaguered districts. Education funding is now one of the most discussed topics in the nation.
According to the Center on Budget and Policy Priorities, 48 states have experienced shortfalls in their budgets, totaling $200 billion -- the largest state budget gaps ever recorded. But that record won’t stand for long: Budget gaps for 2011-12 are estimated to reach $260 billion.
What can you do in the face of this unprecedented pressure to provide quality education? Consider forming an audit committee. An active, well-organized audit committee can save money, reduce opportunities for fraud, and ensure that available resources are used efficiently. In addition, this committee demonstrates that the district is dedicated to transparency and fiscal accountability. Although ultimate oversight responsibility rests with the board, the audit committee is an invaluable asset that will make sure internal controls are monitored.
What does an audit committee do? Although most board members readily adapt to developing policy and evaluating district leadership, providing fiscal oversight and risk management is beyond the expertise of many. An audit committee can help because it is a group of financially astute individuals drawn from the board itself and the community at large. Reporting to the board, the committee assists by reviewing financial reports and internal control measures as well as identifying risks and monitoring investments. By including knowledgeable community members, the board can access the requisite financial expertise without giving up any authority.
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