Friday, May 10, 2002

School ordered to pay

Auditor questions Harmony finances

By Jennifer Mrozowski,
The Cincinnati Enquirer

        The state auditor's office has ordered a Price Hill charter school to pay back more than $11,000 from a failed entrepreneurial venture for students.

        The state audit released Thursday also called into question the financial viability of the nearly 500-student Harmony Community School.

        “They have a tremendous financial challenge ahead,” said Kim Norris, spokeswoman for the Ohio auditor's office.

Overpayment kept

        The audit was for the fiscal year ending June 30, 2001. All school districts and community schools in Ohio are audited annually.

        Among the allegations:

        • Harmony was overpaid $174,660 in fiscal year 1999 by the Ohio Department of Education for enrollment. The amount was withheld the next year. Because the school filed suit against the state to recoup the money, the school listed the amount as revenue in financial statements. However, the dispute has not been settled and the school's earnings have been overstated.

        • The school had a significant operating loss of $308,725 for the year ending June 30, 2001.

        • More than $8,300 in missing inventory and $380 in student cell-phone use and other expenditures could not be accounted for. Car rental amounting to $543 was authorized by people not affiliated with the school. Those and other illegal uses of public money arose from the start-up and failure of a clothing store. The store was to be part of the school's entrepreneurial class. The total to be repaid to the school is $11,900.98.

Unopened boxes

        Robert Witt, the school's part-time treasurer since April 2000, said the audit doesn't tell the whole story.

        Inventory from the clothing store may be sitting in the many unopened boxes stored in the school after its move from the Swifton Commons shopping center last fall, he said. After students' interest in the store waned, the store was closed, he said. Courtis Fuller, spokesman for the school, said they are working to catalog and retrieve the items.

        The school will pay back what should be repaid, he said. Some issues, however, continue to be disputed, including the $174,660 from overpayment that was later deducted by the Ohio Department of Education. Arguments were heard in the Ohio Court of Claims but a ruling has not been made.

Formula perceived

        Regarding the $308,725 operating deficit, Mr. Witt said the school was calculating part of its budget based on a perceived formula of state funding for students who require special education.

        The school learned of the formula only after filing a lawsuit with the Ohio Department of Education, Mr. Witt said.

        “Knowing what we know now, our expenditures are matching our revenue,” Mr. Witt said.

        Among the remedies: reduction in payroll expenses.


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