MILLSTONE – A corrective action plan has been approved by the Millstone K-8 School District Board of Education in response to a recommendation contained in the district’s 2016-17 audit.
Board members approved the corrective action plan for the comprehensive annual financial report (audit) on Dec. 11 and directed Business Administrator Bernard Biesiada to take action to implement the plan.
In accordance with state law, the governing body of every municipality and school district must have an annual audit of its books, accounts and financial transactions. The school district’s audit was conducted by the firm of Holman Frenia Allison, P.C.
In a presentation before board members, Certified Public Accountant Rodney Haines, representing the firm, explained that the comment from the auditor was the result of legal fees arising from litigation between the Millstone school district and the Upper Freehold Regional School District.
“The school district (Millstone) over-expended multiple line item accounts in their support services general administration expenses by a net amount of $310,188,” Haines said, reading from the audit.
“The over-expenditures were caused by legal fees associated with an unexpected lawsuit during the year, ending June 30, 2017. The school district requested approval to transfer money to cover the expenditures, but the request was denied by the executive county school business official.
“The executive county school business official denied the request due to the budget transfers exceeding 10 percent of the advertised general administration appropriation accounts,” Haines said.
Haines told board members the district’s expenditures for legal fees for 2016-17 were about $270,000 higher than they had been in previous years, which is why his firm had a comment. He said the firm’s recommendation was to continue to follow procedures.
“We needed to make a comment only because there are over-expenditures that were not properly offset with appropriations and it’s just because (the county school official) denied allowing those transfers,” he said. “Not telling you (Millstone) that you did anything wrong because (in a lawsuit) you have to continue to pay your professionals to continue to work.”
He added that the firm had no other findings in the school district’s audit.
“That’s the only comment we had and it is only because of a compliance issue,” Haines said. “As far as your day-to-day operations go, everything is running smoothly.”
Regarding the litigation, Millstone and Upper Freehold Regional have a long-standing relationship in which students of high school age who live in Millstone Township can attend Allentown High School in the Upper Freehold Regional district.
Upper Freehold Regional filed legal action against Millstone in 2016 concerning the Millstone board paying tuition for Millstone residents who enroll in specialized programs at Red Bank Regional High School, Little Silver.
Upper Freehold Regional claims the payment of that tuition is unlawful and is requesting Millstone to no longer send and Red Bank Regional to no longer receive students whose tuition is paid for by Millstone. The litigation is ongoing.
