GC school district releases statement regarding Intellex forensic audit, setting public meeting for Sept. 25
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By LeAnn R. Ralph
GLENWOOD CITY — The Glenwood City school district has released a statement outlining steps taken to prevent the kind of fraud perpetrated by former employees, scheduling a meeting September 25 to talk about the forensic audit, and apologizing for the conduct that occurred.
The statement notes that the School District of Glenwood City has released the now-public forensic audit completed by Intellex Forensics that Tim Johnson, former school superintendent, had tried to block by filing for an injunction in St. Croix County Circuit Court.
The forensic audit was concluded on June 4, 2024, and a public meeting scheduled for July 24 to review the results was subsequently cancelled because of Johnson’s filing for an injunction to keep the school district from making the forensic audit results public.
Oral arguments from attorneys representing the school district and Johnson were scheduled in St. Croix County Circuit Court on August 15.
Following an agreement submitted to the court by the attorneys representing the school district and Johnson, a St. Croix County judge cancelled the oral arguments and dismissed the civil case asking for a restraining order against the school district.
According to the agreement, the school district was required to release the results of the audit to Johnson seven days prior to releasing the findings to the public.
Disheartened
The statement goes on to talk about the investigation into Johnson’s financial activities in the school district.
“The School District of Glenwood City was disheartened to learn of the breadth of conduct that occurred, and we have fully cooperated with local, state and federal law enforcement along with other regulatory agencies such as the Wisconsin Department of Public Instruction; Wisconsin Department of Justice — Division of Criminal Investigation; Internal Revenue Service; WRS — Wisconsin Department of Employee Trust Funds; CLA Auditors — CliftonLarsonAllen LLP; and others,” according to the school district’s statement.
The statement continues, “The School District of Glenwood City Board of Education approved this forensic audit in order to ensure that the District had a full accounting of all potential issues that may have occurred over the past several years in order to be good stewards of public funds and the public’s trust. In order to move forward as a District and community, we needed a full accounting of everything that has occurred.”
A meeting of the Glenwood City Board of Education in a work session that is open to the public has been scheduled September 25 at 6 p.m. in the GCSD Commons.
During the work session meeting, Intellex Forensics will present the findings of the forensic audit and will answer any additional questions the Board of Education may have.
Preventive measures
The statement from the school district lists a number of preventive measures that have been taken to ensure that the fraudulent actions of the former employees will not happen again.
Here are the measures that have been taken:
• Create, implement and follow proper policy and procedures with assistance from NEOLA.
NEOLA is a company that provides policies to school districts, and when state or federal law changes, the company provides updated policies so that the appropriate references to state and federal law are included. .
NEOLA also provides new policies that reflect new state and federal laws or new areas that have not been addressed previously, such as the use of social media by students and staff.
A number of school districts in the area use NEOLA for district policies, and as several Boards of Education have noted, it would take school board members hundreds of hours each year to try to keep the policies updated.
• Implement financial accounting audit recommendations from Intellex Forensics and CliftonLarsonAllen.
• Continue to work with attorney Trevor Helmers of Squires, Waldspurger & Mace, P.A. to further assess and correct human resource issues and processes such as proper contract development.
• Work with Baird Financial to balance out Fund 10 and Fund 80 levies for future tax equity.
Fund 10 represents a school district’s general fund for current district financial activities, and Fund 80 is the community service fund.
According to the Wisconsin Department of Public Instruction, “The Community Program and Services (CPS) Fund 80 is used to account for activities such as adult education, community recreation programs (such as evening swimming pool operation and softball leagues), elderly food service programs, non-special education preschool, day care services and other programs which are not elementary and secondary education programs but have the primary function of serving the community.”
• Hired former School District of New Richmond Accountant, Ms. Deborah Newman, with 21 years of school finance experience, as our District Accountant.
• Liquidated inappropriate investment funds.
The Tribune Press Reporter will be explaining more about the inappropriate investment funds in an article addressing the results of the forensic audit.
State law only allows certain investments for school districts, and the superintendent and district accountant put school district money into investments not appropriate for school districts.
• Correct past inappropriate budgeting and payroll practices.
• Use correct budgeting information to plan and formulate future school district budgets.
• Implement appropriate fiscal business practices that are pro-active and best practice.
• Removed all “performance stipends” from School District of Glenwood City current and future budgets.
• Provide timely and meaningful communication to all stake holders along with proper transparency and board governance.
• Working to collect stolen funds through restitution and fraud insurance claims.
Apology
The Glenwood City school district’s statement on releasing the Intellex forensic audit ended with an apology.
“On behalf of the School District of Glenwood City Board of Education and Administration, I would like to apologize for the conduct that has occurred and ensure that these types of actions will not happen again. The School District of Glenwood City TEAM made up of the Board of Education, Administration, and Staff is determined to provide the highest quality of education possible, and we thank you for your continued support and for putting your trust in us as we move forward together.”
The statement is signed “Respectfully, Patrick B. Olson, District Administrator.”
