“…………….the audit also was to have included BISD’s self-funded employee health plan, which generates about $40 million a year in claims. After negotiations with the firm, it was determined that insurance expenditures would not be included in the audit’s scope.”
Brownsville Independent School District trustees agreed Tuesday night to spend $250,000 for a forensic audit of the district’s bonded debt and E-Rate expenditures during the last three years.
By a 7-0 vote, trustees agreed to hire the Dallas forensic auditing firm of Defenbaugh & Associates to complete the audit within 120 days. The audit is to cover the 2008-2009, 2009-2010 and 2010-2011 school years.
In July, trustees directed BISD administration to negotiate with Defenbaugh to determine a fee for the services. At that time, the audit also was to have included BISD’s self-funded employee health plan, which generates about $40 million a year in claims. After negotiations with the firm, it was determined that insurance expenditures would not be included in the audit’s scope.
The audit will include the other two areas originally envisioned:
äSchool construction financed by a $136 million bond issue in 2006, as well as about $40 million in recent projects paid for through federal stimulus funds and qualified school construction bonds.
äBISD’s participation in the federal government’s E-Rate program to finance construction of computer networks and other information technology applications across the district.
At the July meeting when trustees authorized the audit, board president Catalina Presas-Garcia characterized it as an investment and said BISD could recoup funds.
The website investopedia.com, defines forensic audit as “an examination and evaluation of a firm’s or individual’s financial information for use as evidence in court. A forensic audit can be conducted in order to prosecute a party for fraud, embezzlement or other financial claims.”
Editor’s Note: The BISD Board of Trustees has a fiduciary responsibility as trustees of the BISD self-funded employee welfare plan to insure the financial integrety of the Plan. The BISD self-funded health plan represents approximately 10% of the entire BISD annual budget. In our opinion, there is enough evidence to support the need for a forensic audit. Since 2009, we have produced documents obtained through Open Records requests that show apparent descrepancies between contracts, billing statements, and consultant’s work product. Failure to address these issues is a failure in fiduciary responsibility in our opinion.