Audit team composition is debated

Leader of schools wants staff serving on evaluation panel

`To simply define scope'

Krebs fears `conflict of interest,' calls for board member role

August 01, 1999|By David L. Greene | David L. Greene,SUN STAFF

Setting the stage for a prickly debate over how to conduct a performance audit of Carroll County schools, Superintendent William H. Hyde will recommend that four of his staff -- and no school board members -- draft the audit proposal.

The superintendent's recommendations are a setback for board member Susan Krebs, who has insisted that she and other board members, as opposed to Hyde and top-level administrators, play a big role in the development of the audit.

It is standard practice in the corporate sector, Krebs has argued, for boards of directors to decide which offices and issues will be examined.

"I want to make this thing independent," Krebs said. "The governing body is responsible for this. We should be appointing this committee. We should be serving on this committee. We should be responsible for it. And we're handing it all over to the staff."

Hyde defended his decision to include school administrators.

"The role of the staff members is to simply define the scope -- what management systems will be reviewed, in what order," Hyde said.

Krebs and the public will have an opportunity to comment on the proposal Aug. 11, when the school board and county commissioners meet to approve the team.

The 10-member panel will consist of five members nominated by the school system and fivefrom the county.

The team will come up with an audit proposal that must be approved by the commis- sioners and school board.

Neither board has released its recommended appointments.

The county commissioners couldn't be reached for comment Friday.

But Hyde said last week that he will recommend one member of the business community and four school staff members.

Hyde said he assumes a school staff member will be a co-chairman of the audit team along with a co-chairman appointed by the county.

That staffer, Hyde said, will help an audit firm schedule interviews with employees and gain access to school offices.

Krebs said she fears a "conflict of interest" if staff members -- who are being audited -- have too large a say.

Those familiar with performance audits say there is no single method used to conduct them.

Although financial audits of businesses or government agencies are fairly straightforward, performance audits -- which look more at management than money -- are often tailored to the entity being examined and the types of issues being investigated.

Tom Lee, assistant superintendent for business services in the state Department of Education, said Prince George's County assembled an informal team of school administrators and advisers from the state level to write a plan for a big performance audit in 1997.

That group presented the plan to the school board, which approved it.

Lee said questions about whether school employees would influence the audit never came up.

He also said that no board members served on the audit team but that nothing precluded it if one wanted to serve.

Tom Hood, executive director of the Maryland Association of Certified Public Accountants, said board members and top-level employees frequently serve on performance audit teams at corporations.

The key, Hood said, is perception.

Because a committee can influence how an audit plan is drafted before the firm takes over, it is important not to let it appear that a certain employee or faction is steering the process, he said.

One Carroll County parent agreed.

Susan Ulrich, a co-chairwoman of a parent advocacy group called Citizens for Schools, said that although she sees no problem with staff serving on a team, it may appear more fair to the community if the entire team -- rather than a co-chairman from the school system -- remain involved in the process after the auditing firm begins its work.

"That's what will get them credibility," Ulrich said. "There's so much mistrust out there."

The school board and county commissioners agreed July 14 to move ahead with the audit, which has soured their relationship.

The county is withholding $1 million in school money until the audit has begun.

At that meeting, Krebs -- who has 20 years of experience as an accountant -- asked that she be appointed to the committee.

She favors a team of board members and community members.

Fellow board member C. Scott Stone was cool to the idea of a board member serving.

But the issue was left unresolved.

Since then, Krebs has complained that the decision about who would serve on the team may be taking place out of the public eye.

She said the board should have engaged in an open debate.

"The public needs to know what's going on," Krebs said.

Although no vote was taken, Hyde and school board President Gary Bauer said they had the impression no other board members supported the idea of having Krebs or another board member on the committee.

Joseph D. Mish Jr., another board member, said Friday he had no strong feeling about whether or not a board member should serve, but added that it should not be Krebs.

He said Krebs has been an outspoken critic of some of the departments to be audited.

Mish also said there are some staff members he will oppose if they are recommended by Hyde, but he declined to identify them.

Other board members couldn't be reached to comment Friday.

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