Pre-conference ASBO May 13, 2014 Richard Boothby, Esq.
The Education Law Group Primary Attorneys Adjunct Attorneys Bob Bays - Eminent Domain Greg Bailey - Morgantown Joe Caltrider – Personal Injury Defense Rick Boothby - Parkersburg Mark D’Antoni - Real Estate Howard Seufer - Charleston Mark Dellinger - Human Rights Rebecca Tinder - Charleston Kit Francis - Creditors Rights Jill Hall - Employee Benefits Kim Croyle - Morgantown Justin Harrison - Employee Leave Issues Bob Kent - Personal Injury Defense Ellen Maxwell-Hoffman - Ethics Legal Assistants Marion Ray - Workers Compensation Sarah Plantz - Charleston Cam Siegrist - Finance Dianne Wolfe - Parkersburg Ken Webb - Construction Litigation
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Overview of today’s presentation 1. Appointment /bonding of treasurer/approval of bank accounts 2. Policy 1224.1 Basics 3. Unauthorized Expenditures 4. The Ethics Act & The Pecuniary Interest Statute 5. Sale of surplus school property Staying on top of the Board’s Money
Appointing a treasurer • on or before the first Monday in May every year • s uperintendent’s recommendation required • One- year term only for “treasurer of the board of education” Bonding of treasurer • requires board approval • amount of bond cannot exceed the amount of school funds which it is estimated the treasurer will handle within any period of two months. • board must pay the premium Approval of bank accounts & authority to invest/security for funds invested WV Code 18-9-6
He (or r she) Who Holds th the Key y . . . . Whose is responsible for the use of school funds ?
The Short Answer Treasurer The buck stops with these three. Other school employees also have significant duties and responsibilities under Principal School Board the law.
Policy 1224.1: Accounting Procedures Manual & Policy 8200: Purchasing Policies and Procedures Manual Policy Effectiv fective e date te August t 13, , 2012
1224.1 has the force of law “It is a policy, not a suggestion” Policy 1224.1
Applies to every public school and multi-county vocational center (1) Policy 1224.1
Establishes minimum school accounting requirements (1) Policy 1224.1
Mandates, recommends, urges, prohibits . . . Policy 1224.1
3 Primary Points of Responsibility Policy 1224.1
The Principal • “The school principal is responsible for the financial management of the school. The principal must ensure that – all provisions of this manual and local board policies and procedures are complied with, – all accounting records are maintained accurately, and – all financial reports are prepared and submitted in a timely manner.” (4) Policy 1224.1
The Chief School Business Official • Signature authority on all accounts (6) • Recipient of financial statements (26) • Recipient of reports (8, 11) • Role in annual examinations? (27) • Other? Policy 1224.1
The County Board of Education • Mandated policies – 4, 8, 13, 14 • Optional policies – Should: 8, 23 – May: 14, 16, 18, 27, 30, 33, 37 • “Procedures”: 11, 20, 21, 33 Policy 1224.1
Some major provisions: • Separate entity (1-3) • The principal’s responsibility (1 -4) • Bank deposits (1-16) • Unauthorized expenditures (1-18, App C) • Purchase orders (1-19) • Payments for personal services (1-22, App D) • Petty cash, starting cash (1-26, 1-30) • Reconciliation of bank statements (1-28) Policy 1224.1
Some major provisions: • SSAC tournaments (1-31) • Uniforms (1-32) • Fund raisers (1-34) • Faculty senate funds (1-37) • Consumer sales tax (1-38, 1-39, App B) • Support organizations (2) Policy 1224.1
HANDOUT (Courtesy of the WV Department of Education) Significant Revisions Between the “Old” and “New” 1224.1 Policy 1224.1
Top Ten Things to advise your principals and others responsible for handling public or quasi-public funds Policy 1224.1
1. Scrupulously follow all the requirements of the State Board policy and related county policies. Review them once a year. Share them with each PTO, booster club, and support group. Policy 1224.1
2. Never pay in cash. Always pay by check. - surprising how many schools are allowing cash payments to continue Policy 1224.1
3. Except for athletic officials, pay for all personal services through the central office payroll process unless you are CERTAIN that the provider is an independent contractor, then always pay by check. Policy 1224.1
4. NEVER make a purchase before the purchase order is approved Policy 1224.1
5. Be sure that invoices contain the necessary information Policy 1224.1
6. Don’t hold money. Deposit it in a timely fashion. Policy 1224.1
7. Require PTOs, booster clubs, and support organizations to follow all the rules and make all the reports Policy 1224.1
8. Be sure that the principal approves all fundraisers by these groups and requires and receives a P&L for each Policy 1224.1
9. Require groups collecting funds in the school’s name to receive prior approval of the Board before fund raising. Policy 1224.1
10. Pay attention to the reports you receive and don’t receive. Where there is smoke, there could be fire. Report suspected irregularities, breaches of policy, and suspicious circumstances. Policy 1224.1
Unauthorized Expenditures: violations have real consequences - WV Code §11-8-25 (funds expended only for purposes for which raised) - WV Code §11-8-26 (unlawful expenditures by local fiscal body) - WV Code §11-8-29 (personal liability of official participating in unlawful expenditure) - WV Code §11-8-30 (recovery of unlawful expenditure from participating official by action) - WV Code §11-8-30 (criminal liability of official violating provisions of article; proceeding for removal) Policy 1224.1
West Virginia Governmental Ethics Act And conflicts of interest A Refresher
Developing an appreciate the interrelationship between the standards of the Ethics Act (West Virginia Code § 6B-2-5) and the Pecuniary Interest Statute (West Virginia Code § 61-10-15)
Pecuniary Interest Ethics Act Statute Dates back to 1879 First enacted in 1989 Applies only to: Applies across-the-board to - county school boards, - public officials and employees throughout state, county and - superintendents, principals, municipal government supervisors, and teachers; - members or officers of county commissions and other county or district boards When the Ethics Act prohibits When the Pecuniary Interest Statute something, it doesn’t matter if the prohibits something, it doesn’t matter Pecuniary Interest Statute appears to if the Ethics Act appears to allow it. It allow it. It is illegal to do it. is illegal to do it.
Pecuniary Interest Ethics Act Statute Often it is harsher than the Ethics Act Sometimes it does not absolutely by absolutely prohibiting a county prohibit a county board or school board or school official from doing official from doing something. something Instead, the Act contains exceptions Example: When a county board is Example: Sometimes a forbidden forbidden to enter into a contract or transaction is permitted when the transaction, it usually does not make board member or school official who a difference if the board member or has the conflict of interest “recuses” school official who has the conflict of himself or herself interest “recuses” himself or herself
Persons Subject to the Ethics Act West Virginia Code 6B-2-5(a) All elected and appointed public officials and public employees, whether full time or part time Their respective boards, including county school boards
Minimum Ethical Standards meant to “maintain confidence in the integrity and impartiality of the governmental process in the state of West Virginia and its political subdivisions” -- W. Va. Code § 6B-1-2
Selected Standards from the Act 1. Use of public office for private gain 2. Interests in public contracts 3. Employment by regulated persons & vendors 4. Limitations on voting
-1- Use of public office for private gain West Virginia Code § 6B-2-5(b)
A public official or public employee may not knowingly and intentionally use his or her office or the prestige of his or her office for his or her own private gain or that of another person
Incidental use of equipment or resources available to a public official or public employee by virtue of his or her position for personal or business purposes resulting in de minimis private gain Exemption #1
The performance of usual and customary duties associated with the office or position or the advancement of public policy goals or constituent services, without compensation Exemption #2
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