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Ohio auditor places Liberty schools in fiscal watch


Published: Fri, May 27, 2011 @ 12:05 a.m.

photo

Dave Yost

Seven school districts in Ohio are under fiscal emergency, and six are under fiscal watch. Fiscal emergency is the most severe stage of a district’s financial solvency problems. A fiscal watch is declared when a district’s financial condition threaten its solvency. Mahoning Valley districts and duration as of Thursday under the designations:

Fiscal emergency

McDonald Local Schools, 1.6 years

Beaver Local Schools, 1.3 years

Fiscal watch

Niles City Schools, 8.2 years

Brookfield Local Schools, 5.2 years

Liberty Local Schools, one day

Source: Ohio Auditor Dave Yost

By Jeanne Starmack

starmack@vindy.com

LIBERTY

The state has placed the school district in fiscal watch, which is one step away from fiscal emergency.

State Auditor Dave Yost said the watch status became effective Thursday.

Failure to submit a recovery plan that eliminates a $2.5-million deficit projected for fiscal year 2012 and incomplete financial records prompted the action, the auditor’s office said.

The district now has 60 days to prepare and submit its plan to eliminate the deficit, which is projected in the district’s most recent five-year forecast.

Otherwise, the district will be placed in fiscal emergency and be subject to state financial oversight.

But preparing that plan isn’t going to be easy right now, said the district’s interim treasurer, James Wilson. He took over the post May 5 after the sudden resignation of treasurer Tracey Obermiyer.

Under Obermiyer’s watch, the district’s financial books became “unauditable,” according to the state auditor’s office, and the office couldn’t get records it needed for routine audits.

An independent auditing firm is reviewing the district’s financial records right now. The district can’t prepare a plan until the firm’s work is finished, Wilson said. He estimated that may be in another month.

The auditor’s announcement comes after school board president Diana DeVito reported at Monday’s board meeting that the board asked the state to certify the district’s debt to determine if it should be placed in fiscal emergency.

Districts fall under emergency status if their debt exceeds their revenues by more than 15 percent, Wilson said.

The Ohio Department of Education, in a letter to the board dated March 31, said the projected 2012 deficit represents 16.1 percent of the previous year’s revenue. The ODE wanted a recovery plan submitted by May 16, or it would recommend to the state auditor the district be placed in fiscal watch or emergency, the letter said.

The auditor’s office said it received a letter from the ODE May 17 that asked the auditor to place Liberty in fiscal watch.

Obermiyer resigned in a letter to the board April 29 after the board became aware she hadn’t provided the state auditor’s office with the needed records.

The auditor’s office notified the board Feb. 7 that it wasn’t receiving records that included bank reconciliations and bank statements, and it also said the district’s books were unauditable. The letter gave the district 90 days to correct the problem or face legal action that could include a suit filed by the state attorney general.

The district doesn’t believe at this point that there was any criminal misconduct on Obermiyer’s part, said John Britton, an attorney for the district. Her letter of resignation cited “personal reasons” for her departure. The Vindicator has been unable to reach her for comment.


Comments

1sewingnut(33 comments)posted 2 years, 10 months ago

How long will it be before Liberty asks for an "emergency levy"? How many "emergency levies" do we currently have on the books that we keep renewing?

In my opinion an emergency levy should be a 1 time deal. Steps should be taken in the mean time to fix the problems. Any request for additional money after an "emergency levy" is due to expire should be termed "permanent". I do not vote for "emergency" renewals.

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2Informant4U(7 comments)posted 2 years, 10 months ago

Redeye -- you should get your facts straight. I was a former employee of Liberty schools.

The employees have been taking pay cuts for at least 8 years. Pay cuts in education refer to wage freezes. They also have been paying more for their benefits each and every year since 2006. Teachers get steps that are built in and are just like bonuses in the private sector. They are very small increments and have very little effect on the overall finances of the school district. All schools have them and uninformed "public education naysayers" like yourself should get your facts straight.

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3SAVEOURCOUNTRY(464 comments)posted 2 years, 10 months ago

The state will make them put a levy on the ballet. Liberty will be the the first of many more state wide to go into fiscal watch and then emergency with or without SB5. Funding was ruled unconstitutional. The solution is simple. Cut the property tax out as a way to fund schools and go to a flat 2% income tax ( and it should include welfare checks). Schools would then have more than enough money to operate for the next 75 years.

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