The Cape Coral Charter School Authority Internal Funds audit has been sent to the Cape Coral Police Department for its review.
In followup to concerns raised by Councilmember John Cariosica at the April 3 Cape Coral City Council meeting, City Manager John Szerlag said he turned the audit and related findings over to Police Chief David Newlan.
"With reference to the internal funds audit of the Charter Schools, I turned the matter over to Chief Newlan to investigate," Szerlag said in an email copied to all members of Council this week. "And based on his findings, he has the authority to turn this matter over to the State Attorney's Office."
Cariosica, whose career was spent in law enforcement, said Thursday it's simply a matter of due diligence; Council would be remiss if a closer look was not called for given some of the audit findings.
"If there's no foul play, OK," he said in a telephone interview. "If so, we go on from there.
"Hopefully, once we get done, we can move on and the charter schools will be in a better place," he added.
Mayor Marni Sawicki, who also has called for a deeper look, took a similar view.
"For me, I would like to make sure we get a comfort level on how money possibly came in and how much was accounted for," she said.
Councilmember Richard Leon, who asked Szerlag for the status update this week, said he is in wait-and-see mode.
"I patiently wait for what the chief finds out," said Leon, who has criticized the "politicized" approach of some on Council.
The report, performed by the City Auditor's office, was released in February.
According to the report's executive summary, the audit looked for "compliance with established policies and procedures, code of ordinances, administrative regulations and applicable labor law and legal requirements" as well as "effective internal controls and best practices over the use of internal funds for: A. Collections B. Disbursement C. Good governance."
The audit resulted in 18 "findings," or deficiencies, as well as three "reportable conditions," or serious issues. The findings fell into three categories - collection and receipt of internal funds, (six findings); disbursement of internal funds, (four findings); and governance and administration of internal funds, (eight findings.)
"We concluded that the internal controls safeguarding the Cape Coral Charter Schools Authority internal funds were inadequate and needed to be strengthened," the executive summary states. "The results of this audit indicated significant weaknesses in the design and/or implementation of the internal controls, and as a result, the Authority was unable to effectively manage risks related to its internal fund operations."
The audit included recommendations for each finding and reportable condition as well as a management response from the municipal charter school system comprised of four schools that educate more than 3,000 public school students from pre-kindergarten through high school.
The report states that school personnel were receptive to the recommendations made.
"During the course of this audit, Charter School personnel are to be commended on their proactive response to each finding as it was presented," the audit cover letter states.
Discussion concerning the municipal school system has been on-going since December.
It began following an exchange between Sawicki and the system's then- Superintendent Nelson Stephenson.
Stephenson accused the mayor of attempting to overstep her authority concerning the non-renewal of a teacher's contract. Sawicki said the issue was his approach to parent and teacher concerns, which had been ignored.
An analysis of the system's financial projections conducted by city staff in January then raised questions about the system's long-term fiscal health, showing losses five years out if funding remains level.
As were the earlier allegations, those projections were disputed by the Charter School Authority, the system's governing board, which is chaired by a member of City Council - now split on how to proceed in the wake of the controversy, the audit, and the subsequent resignations of two top members of the system's administration, including Stephenson, who left the system with a letter of recommendation and four months severance as per his contract.
Meanwhile, the audit made its way first to the city's Audit Review Committee, then to Council at its meeting last week.
After Cariosica called for a review by the State Attorney's office, Councilmember Jessica Cosden, chair of the Authority and council's liaison to the charter schools, pointed out that there are no findings of staff fraud in the audit report.
"This is what happens when you let a school system grow for 12 years and never perform an internal audit," Cosden said, adding that the governing board intends to address the audit committee's recommendations at its next meeting on April 21.
Also pending is a "best practices" report from Burton & Associates, which was commissioned by Szerlag.