Another call for a full forensic audit

forensic-accountingContinuing on our recent theme >>

The numbers just don’t add up. One of our regular contributors has spent more time delving into the DeKalb School District’s projected budgets vs actual budgets and the resulting strange, incongruent reports provided by our current leadership, Superintendent Michael Thurmond and CFO Mr. Bell presented to our board simplistically resulting in practically zero questions.


Each year, the DeKalb County School District’s Board of Education approves a one page document as the budget for the next fiscal year. The FY 2014 budget anticipated $1,023,413,706 in total revenues. The GaDOE reports total revenues for DCSD in FY 2014 were $900,819,910.

The difference between the predicted revenue and actual revenue was $122,593,796 less actual revenue or [12%].

It is amazing that the school district can miss its revenue projection by $122+ million dollars and still put increase its fund balance by approximately $30 million. That is a $152+ million decrease in funds available to run the school district.

This raises questions regarding the competence of the people doing the forecasting.

Was the BOE told of the shortfall in revenue? No.

Revenues are only half of the budget. Expenditures are the other half. The BOE approved total expenditures of $986,474,874 for FY ‘14. However, the GaDOE reports DCSD expenditures of $842,266,250. The difference being $144,208,624, or 14.6%. $144+ million not spent in classrooms.

Was the BOE given any explanation for this reduction in expenditures? No.

These findings raise serious questions regarding the accuracy of what the BOE is told during the monthly financial report.

What is even more disturbing is the fact the BOE didn’t pick up on the differences.

SACS says boards of education have two responsibilities; fiduciary and governance. The DCSD BOE failed to exercise its fiduciary responsibilities. In fact, the BOE continues to approve, without questions, the seemingly inexplicable spending by the administration.

The accrual basis of accounting means that revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.  DeKalb County Schools uses what is called “modified accrual basis of accounting.” When you look at the most recent vendor spends report you see DCSD’s modification is expenses are neither recorded, nor reported, when invoices are received. There are five invoices from Alexander and Associates dated Feb. 24, 2014, which were not entered into the accounts payable system until July 17, 2014. Invoice number 696304 from Sutherland Asbill Brennan LLP is dated November 19, 2013, but was not entered until July 24, 2014. This is not the accrual basis of accounting.

The school district audits done annually by the GaDoe are only process audits. According to, “a process audit is focused on determining process effectiveness and the ability to achieve planned results.”  These audits do not look at the accuracy of the financial reports of school districts.

The school district has never done a full forensic audit. Never. One was partially done by Ernst & Young back in 2004, and promptly buried by then superintendent, Crawford Lewis – as it showed significant over payments to many administrators at the time – including our current board Chair Melvin Johnson, who was said to have been paid approximately $11,000 more than comparable positions in area school districts.

DSW bloggers have long believed the DeKalb County School District needs to have a full, financial audit done which includes all accounts, and funds, for fiscal years 2013 and 2014 [as was promised by Ramona Tyson in 2010 and never produced]. The results of that audit need to be made public. The finance department and the communications department then need to develop a plan to communicate the budget to the BOE, and public, in a way that reflects all accounts and funds on a monthly basis. The taxpayers of DeKalb County have no faith in the school district’s administration and these steps will go a long way towards restoring trust.

Please contact your BOE representative and ask them to request a full forensic financial audit for FY ‘13 & ‘14. Also, ask them if they were aware of these deviations from the budget. If the answer is “no,” ask them why not.


About dekalbschoolwatch

Hosting a dialogue among parents, educators and community members focused on improving our schools and providing a quality, equitable education for each of our nearly 100,000 students. ~ "ipsa scientia potestas est" ~ "Knowledge itself is power"
This entry was posted in Board of Education Meetings, Budget Cuts, Crawford Lewis, Criminal / RICO Trials, DeKalb County [GA] School System Retirees, Michael Thurmond, Ramona Howell Tyson, Superintendent Search and tagged , , . Bookmark the permalink.

18 Responses to Another call for a full forensic audit

  1. Stan Jester says:

    DeKalb Schools defines “General Operating Budget” differently than the State DOE. I briefly touched on those differences during the 3/2/2015 65% Rule Waiver discussion.

    You’ll notice the operating budget as defined by the state is much different than the operating budget as defined by DeKalb Schools. The General Operating Budget for FY2015 as defined by the school is $800M. The General Operating Budget for FY2015 as defined by the state is $959M

  2. Stan can you please explain to us what they actually claim they spent. From this Tidbit of information Bell and Thurmond will spin that they budgeted $150M under budget,

    Of course, the IT department probably went to the Fulton County school of pay vendors. Undercount the number of computers and Licenses, that big business founded by a white guy, doesn’t need to be paid for all the Mircrosoft Licenses. ( I had an IT recommend we do that one, and then especially undercount the Autocad Lisences, which used to be 2,500 a seat. He and I got into a dispute when he tried to say the number of Lisences for software running at a time. I said you have to pay for each employee ( now if you had multiple devices assigned to one employee, say a desktop at work and the. A laptop for travel, the software mfg allowed you to count your business mass licenses by employee. Unless, you had employees that were actually running multiple computers at the same time, which happens in some professions. OTherwise as I agrued to that IT person, I was budgeting a minimum of 1 liscence per person. Except where I had Maintence/ Contruction workers used 4 shared computers). Didn’t Mr. Bell come from Fulton county or City of Atlanta.

    I would be very suspecious of what’s being uncovered in both Atlanta Watershed’s inventory and Fulton’s IT, because Bell came from one of those. There seems to be a back and forth between the two.

    I can only imagine how much Fulton’s IT department will owe Microsoft and the Gates on theft of services, by deliberately undercounting the licenses.

  3. Stan, would you please repost that link? It’s not working. Also, is there any news to share about the superintendent search?

  4. Stan Jester says:

    03/02/2015 – 65% Rule Waiver

    Dr. Bell was the CFO for Vernon Jones at DeKalb County before coming here.

  5. Stan Jester says:

    The last full report of what we spent in FY14 was the June 2014 Financial Report. Page 34 shows the General Operating Budget as calculated by DeKalb Schools. The budget was $764M and the report indicates we spent $752M.

    What did DeKalb Schools actually spend in FY2014? I asked that question at the January Financial Report. The June 2014 Financial Report says we only spent $4.5M on LEGAL FEES. However we actually spent $5.3M. We weren’t 4% under budget as reported, we were actually 10% over budget on LEGAL FEES.

    I await an actuals report on FY2014. Here are a few more data points:

    FY2010 – $6,488,537
    FY2012 – $5,645,834
    FY2014 – $5,294,405

  6. Stan, correct us if we are wrong, but weren’t there more chargebacks in legal fees placed back into the FY2013 (2013-14 school year) budget even as recently as February and March of 2015? For example, the February Vendor Spend report says that $373,001.38 was paid to Alexander & Associates under FY15. There is another column titled “EXPENSED TO PRIOR YEAR” (which is vague in itself – we are assuming that means FY14) that shows an additional $275,545.03 paid to Alexander & Associates. So, the total paid so far in FY2015 to Alexander & Associates totals $648,546.41 – but the administration will speak that as only $373,001.38 spent in FY15 and they never mention that the old FY numbers are now incorrect as new spending has been back-charged. This has happened in many categories. And since the report is a PDF, not an Excel doc, we have no way of totaling the amount charged backwards. Backcharging to closed budgets — It adds to the mystery.

  7. Thanks for posting that 65% conversation Stan.

    Curious — this is Mr. Bell’s comment (which we discussed at that time on our post about that meeting) >>

    There are a number of variables that go into answering that question. You’re concerned about the instructional expenditure levels. Keep in mind, this calculation is formatted by the state with a numerator and a denominator. So when we spend more that hits the numerator, it also increases the denominator. But if the budget produces a numerator holding or increasing and a denominator deduction, the percentage will go up.

    This is misleading. You can certainly increase the numerator without increasing the denominator — just move spending from an expense outside the classroom (admin cut) to an expense inside the classroom (teachers, support and supplies). Bell thinks like a bureaucrat – he assumes you can only increase classroom spending by getting new money in the overall budget and allocating it to the classroom (increasing classroom spending – the numerator as well as the overall operating budget – the denominator). We strongly disagree with his logic.

  8. Then Michael Thurmond responds >>

    Perhaps I can provide some clarity. Consider the investments we made in the fund balance and how that is not counted by the state. The fact that we went broke and had a $14 million deficit, I couldn’t think of anything that has impacted instruction more negatively and academic growth and achievement.

    In order to continue to build upon improving instruction and academic growth in our district, we have to rebuild the fund balance. That is the only thing that allows us to plan on making additional investments where they’re needed to help our teachers and students and parents.

    If the state would allow us to count this $50 million dollars we are using to pay off the deficit and grow the fund balance, then that percentage would look differently.

    Michael Bell concurs >>

    If you just take the incremental growth in the fund balance for FY14, that’s $37 million. We started FY14 with a $3.6 million fund balance. We ended with $40 million. That increment of $37 million … if you go to that state form in the agenda and add that $37 million to classroom expenditures, you’ll end up with 65%.

    So, essentially they are admitting that they took money from classroom spending and put it instead into the funds balance (savings essentially) – which is akin to taking grocery money (core spending – not spending on non-essentials) from your family and putting it away in a savings account and then telling the kids not to complain that there’s not much food to eat.

    On top of that Thurmond also reveals that we had been broke – $14 million in debt – which is actually illegal, correct?

  9. Procopius from Constantinople says:

    I think we a way past due for a Mike Bowers and crew investigation of Dekalb Schools. Smoke, mirrors, obfuscation, sheer incompetence and a very strong feeling that something is just plain wrong. Maybe I’m overreacting, but when I interact with the administration I don’t come away with the feeling that it was a positive experience. I agree that a full forensic audit is needed, my only concern is that those in charge might demand a review of the audit prior to anything being released to the public. Selective editing would commence or as happened in the past with other reviews, it might get “lost”. Interesting how the AJC is sitting this one out.

  10. Stan Jester says:

    You can find PDFs and Xls Spreadsheets of Financial Reports Here.

    End of the fiscal year is June 30. The end of year financial report is generally given on the first Monday of August. The “actuals” end of year report to the state, the DE046, is due September 30. The state audit of the 2013-2014 year will likely occur sometime in the Summer of 2015.

    Open up the Feb 2015 Vendor Spend Report spreadsheet found in the Financial Reports link above. That will give you the flexibility you’re looking for. Roughly 2000 checks were sent to vendors in July and August of 2014 that were expensed back to FY14 but never made it in a monthly financial report to the board (except in the vendor spend report).

  11. Stan >> Thank you very much for maintaining these documents and posting them for the public to review!!

    Essentially, it’s nearly impossible (without a forensic audit) to reconcile these budgets and get a real financial picture with the information supplied by Michael Bell and Michael Thurmond. It’s still very difficult with the documents you shared. The opaqueness of the budget does nothing to build trust with the tax paying community.

  12. @Procopius: While we fully agree with your call for a forensic audit (a very different thing from the standard state audit), we don’t think Mike Bowers is the guy for the job. Remember, he represented Cheryl Atkinson in TextGate –

    Suit pursues DeKalb superintendent’s text messages

    Former Georgia Attorney General Mike Bowers was one of the attorneys Atkinson hired. Bowers said Monday that Atkinson sent no public text messages on her personal phone. He said the device was sent to outside technical experts to confirm that. He also said, however, that it’s a new phone. She returned her old phone to the district when it broke, he said. Bowers said that to his knowledge, her old phone was not analyzed for text messages, but said he knows Atkinson sent no public text messages on it.

    “She’s told me that she didn’t, and I believe her,” Bowers said.

    So Atkinson is hired. She is given a brand new phone by the school district. She gets sued for some text messages sent from that phone. The phone ‘breaks’. She turns it in to Brantley and IT. They replace her phone (as well as several others). Bowers and attorneys then have the new phone analyzed by an outside firm and then state “there are no public messages on Atkinson’s phone” [without really stating that they are not referring to her original phone]. She tells Bowers she didn’t send any on her old phone and he ‘believes her’. However, she loses the lawsuit over those texts on her old phone that don’t exist… but we can’t know about those non-existent texts because the court records are sealed.

    So, no. Not Mike Bowers. We don’t have any faith that he will ‘find’ any corruption in DeKalb county either. He will probably announce that they all say there is no corruption and he believes them all.

  13. The article goes on to reveal that State Senator Ron Ramsey, who is also head of DCSD Internal Affairs got the case settled behind closed doors >>

    The employee lawsuit also contends that Ramsey, the school system’s chief legal officer, made a deal with Oinonen: drop the open records request, and the district will reinstate your client and 11 other laid-off employees. Oinonen wrote that she accepted the deal but that DeKalb then reneged. (She also noted she had only four laid-off clients.)

    Bowers said he doesn’t know what, if anything, Ramsey promised Oinonen. “But Ms. Atkinson hasn’t authorized any such deal,” he said.

  14. And, if you are interested in getting up to speed on the rest of the story read this post >>

    Posted: 4:18 p.m. Thursday, Feb. 7, 2013

    DeKalb Schools to vote on separation agreement with superintendent

    The rest of the story is that Atkinson took an extended leave of absence during all of this hullabaloo to care for her ailing father (her stated reason). She later said her father had died and she needed more time.* She never actually returned to work and instead sent her attorney (not sure if this was Bowers as well), to negotiate an exit package. We had no superintendent officially at the helm for several weeks – during which SACS had lowered our accreditation and was looking for a list of stated improvements, while the state board recommended that the Governor remove all nine members of the board. He removed six – just days after the BOE majority voted to hire Michael Thurmond – in secret executive sessions – in a desperate attempt to appear stable. [Governor Lets-Make-A-Deal did not fire the recently elected board members Marshall Orson, Jim McMahan and Melvin Johnson – a mistake in our opinion, as they were called out in the SACS report for having meddled after their election but before officially taking their seats. They were the ONLY board members called out in the SACS report. Nancy Jester was not and could not have been called out as she was the board member who brought DeKalb County Schools’ financial issues to the public eye. Orson, McMahan and Johnson also participated in this secret hiring of an ‘interim’ superintendent – who later became permanent. Nancy Jester also strongly objected to the secret meeting.]

    *DSW searched diligently for an obituary for Atkinson’s father, but never found one.

  15. The Mike Bowers/Lee May “investigation” WILL PREVENT PROSECUTION…… see Kathleen Baydala Joyner’s March 24, 2015 article “Dekalb DA Wants Corruption Probe Stopped, Shifted to His Office” in the Daily Report:

    An excerpt:

    James was out of state last week when interim county CEO Lee May announced he had hired former state attorney general Mike Bowers and others from Balch & Bingham as special investigators to conduct the probe. James said he met with May on Monday to express his concerns.
    “My No. 1 concern at this point is that someone could come right in and confess a crime to them and, based on the way the executive order is written, it would bring all kinds of protections to those statements,” James said. “I don’t think that it’s a wise thing to do.”
    James is referring to rights identified in a 1967 U.S. Supreme Court decision, Garrity v. New Jersey, 385 U.S. 493. In that case, the court found that the Fourteenth Amendment prohibits government agencies from using the threat of termination to compel its employees to give potentially incriminating statements to investigators and then using their statements to support subsequent criminal prosecution.
    May’s March 18 executive order states that any county official or employee under the direction of the CEO must answer the special investigators’ questions. Refusal to do so “may be cause for disciplinary action, up to and including removal from office or employment or other appropriate penalty,” the order states.
    So if Bowers’ investigation were to uncover criminal activity, the district attorney’s office would be precluded from using any compelled statements or evidence gleaned from those statements to prosecute those employees responsible, James said.

  16. concerned citizen says:

    In spite of all the extremely serious corruption I read about across this country, I don’t think there’s a more entrenched corrupt, bunch of losers than in DeKalb County Schools. It is virtually impossible to find one good man in positions from principal on up. As long as the citizens tolerate and pander to Melvin Johnson, Thurmond, Bell, Atkinson, Ramsey, on and on, there is NO hope for the teachers and the teachers. It’s too bad; it’s very hurtful to see such blatant and wildly unhinged behavior from the likes of all this incestuous F & Fers. We can talk about the budget, instruction,It, all day, but nothing changes. Maybe the only hope is that the AJC will finally get involved and pursue all of this mess. Most of the work has been done for them. All they need to do is follow this path of DeKalb School Watch over too many years.

  17. kirklunde says:


    I think you are a little low with your FY ’14 total for legal expenses. I went through the spreadsheet and got $5,890,405. I found $1,399,943 “expensed to the prior year” but paid in FY ’15.

    Is there any reason why the BOE can not require the finance department to adopt the GaDOE definitions and chart of accounts? The only reason not to do so is to obscure the information.

  18. Stan Jester says:

    Are you saying that even though the administration told me LEGAL FEES were $5.3 million, it looks like they are more like $5.9 million? I’ll work on reconciling those numbers.

    Chart of Accounts

    That is the discussion between Nancy and the state auditor about the chart of accounts.

Comments are closed.