IW supervisors propose audit committee

Isle of Wight supervisors are proposing to form a new committee tasked with keeping a closer eye on the county’s finances.

Supervisor William McCarty discussed the idea at the supervisors’ June 6 meeting, citing a January audit by the accounting firm Robertson Farmer Cox that found discrepancies in the county’s school system’s books.

The audit showed Isle of Wight County Schools having overspent its budgeted expenses for the 2022-23 fiscal year by more than $700,000, a larger deficit than the $603,163 IWCS Superintendent Theo Cramer had acknowledged to the School Board in August.

“Last couple of years we’ve had the unfortunate opportunity to go through some issues with audits on the school side,” McCarty said.

Robertson Farmer Cox, in the current audit and one performed in 2023 for the 2021-22 fiscal year, each time issued the county a clean opinion declaring the county’s financial statements “can be relied upon” for accuracy, but this year contended that while the division’s books are accurate now, they weren’t when IWCS first turned over the financial data auditors requested.

The past two years’ audits each chided IWCS, which has seen four chief financial officers come and go since 2022, for difficulties they blamed on high turnover in the division’s finance department, though only the 2022-23 audit found errors deemed to rise to the level of a “material weakness,” the most serious classification of bookkeeping error.

Cramer, in February, presented the School Board with a plan for resolving the deficit by implementing a spending freeze through June 30. The division, as of early May, was on track to avoid a repeat of last year’s financial crisis according to Jim Roberts, whom the division had hired as its interim CFO in March and who was succeeded by Liesl DeVary in May.

McCarty’s proposal calls for a seven- or nine-member body co-chaired by two supervisors that would also include three unelected county residents with finance backgrounds, County Administrator Randy Keaton and County CFO Stephanie Wells. DeVary and Cramer would be the potential eighth and ninth members.

Among the group’s listed tasks would be receiving and reviewing the county’s periodic finance reports and providing recommendations on corrective actions.

McCarty said appointees “should have a basic understanding of financial reporting and accounting principles and the ability to read financial statements” and “a reputation for integrity and ethical conduct.” Prior experience in accounting, law or business management is also desirable, as is experience in public sector accounting.

Board of Supervisors Chairman Joel Acree said state law allows counties the option of forming an audit committee though Isle of Wight hasn’t done so to date.

“I really think that this is a step in the right direction,” McCarty said.

Supervisors Renee Rountree and Rudolph Jefferson disagreed over whether to invite Cramer or just DeVary to represent the school division on the body. Rountree proposed an eight-member body without Cramer, citing that Cramer has in past presentations to the supervisors deferred to his CFO for accounting details, though Jefferson called it a “common courtesy” to include both.

Rountree said she believed the audit committee would “help continue these conversations throughout the year” so that come next spring when the supervisors begin discussing its local funding allocation to IWCS, there’s “not a rush” or “hard feelings.”

Rountree joined with her fellow supervisors in a unanimous May 17 vote to adopt a $107.6 million budget for the county’s 2024-25 fiscal year that allocates $32.9 million in operating costs and an additional $9.5 million in capital funds for costly one-time expenses to its school division. School Board Chairman Jason Maresh has criticized the amount, though a $2.7 million or 8% increase over the division’s current local funding, as insufficient to cover all the division’s needs and wants. Maresh, in a May 8 email to supervisors, contended the funding would cover the local share of state-mandated 3% raises for school employees but not the additional increases teachers receive under the division’s 35-step pay scale, among other costs.

“I think you can go looking and find whatever narrative you want to fit your scenario and your opinion, and mine remains that I value our teachers; I value our educational system,” Rountree said. “I know everybody sitting up here does and if we could give them the world, if I could give them absolutely everything they wanted this year in the budget I would … but it would cost an additional 20 to 28 cents per $100 on the (real estate tax) rate.”