Board Members Question Auditors, Business and Tax Office Personnel on Tax Office Rent

By Christopher Miller

BALD EAGLE TOWNSHIP – John Compton and Adam Hartzel, Auditors with Baker Tilly, were invited by Nick Grimes and Joni McIntyre to answer questions brought forth by the school board.

“We have heard through Joni and Nick that there were rental questions from prior years from the district tax office and some supplies involved there as well, so we are here to answer any questions that you have for those items.”

Board Member Chris Scaff then began the line of questioning.

“I wanted to know why we were paying bills for ’21 through ’23. We were advised that checks were bounced from the TCC to the school,” Scaff asked. “I want to know how that could have happened and what year were the checks bounced in?”

Grimes then addressed the board.

“To be clear, it was the tax office, not the TCC,” Nick Grimes said. “It was one check, and one year where the check was bounced and that was March of ’22 during my first week here. The tax office was always invoiced for rent at $1,000 a week and $2,000 for supplies a year. The General Fund invoices the tax office for rent and supplies.”

“How did we bounce a check,” Scaff asked, reaching out to McIntyre.

“I was not here, there was a previous business manager and tax office supervisor at that time, I was here in June 2021, left in March ’22 and came back in November ’22. I was not here at the time when the check was cut. I believe they probably thought there were funds in the account to cover the expenses, and apparently there wasn’t. It was from the tax office to the school district, two separate funds, and the auditors can probably speak on that,” Joni said.

“How can we as school board members approve bills to pay from years ago but there is no invoice to match the bill,” board member Elisabeth Lynch asked.

“In the accounting world there is this concept of exchange transactions,” Compton of Baker Tilly said. “I don’t believe a formal lease existed between the district or tax office so if it wasn’t billed, you wouldn’t have something to approve because there was no bill there. Sitting here today and being asked to approve payment for something done in prior years, should I do it or not, we would look to the fact that the tax office used the space during the time frame, you following this exchange transaction concept of accounting, there was a service or a space provided and even though it is several years after the fact, the fact the district would be pursuing this I think it is valid payable from the tax office to the district. I don’t think there wouldnt be anything improper about these payments being approved at this point in time. We would not question it as auditors.”

Lynch then asked if substitute aides are used in their line of work and if it is standard operating practice.

“We’ve never used other personnel on KCSD accounts,” Compton said. “We are the 10th largest accounting firm in the United States, bigger cities have substitute personnel, but we have not done that with Keystone Central.”

No other questions were asked of Baker Tilly.