The Charleston County School District will spend $80,005 to conduct a forensic audit of district finances after discovering an $18 million budget shortfall for the fiscal year ending June 30, 2015.
In a service agreement released Wednesday, the district hired the local accounting firm Elliott Davis Decosimo to conduct a forensic audit for Fiscal Years 2013, 2014 and 2015.
Unlike financial reports, which the district completes annually, and procurement audits, which state law requires an auditor to conduct for the district every three years, a forensic audit searches for inaccuracy and wrongdoing.
After the district put out a request for proposals from accounting firms, the school board selected Charleston-based Elliott Davis Decosimo’s proposal at a specially called board meeting the morning of Nov. 16.
The agreement states that the district will pay the firm as a contractor from Nov. 23 through June 30, 2016.
After the board approved the proposal Nov. 16, employees in the district Contracts and Procurement Office negotiated with the firm for a week before sending a finalized agreement to the firm, according to district General Counsel John Emerson. The firm did not sign and return the agreement until after the week of Thanksgiving, and then the district had to wait until school board Chair Cindy Bohn Coats had signed the document before releasing it to the media, according to Emerson.
School board member Todd Garrett, head of the Audit & Finance Committee, said the board chose Elliott Davis Decosimo because it has a reputation as a “top-shelf firm,” it has forensic-audit specialists and it does not have any existing relationships with the district.
“We felt it was important for the board and the public to have confidence that the auditor is a true outside entity going over the books with a fresh set of eyes,” Garrett said.
In addition to the forensic audit, the district in mid-October enlisted the help of two former chief financial officers of South Carolina school districts to conduct an initial analysis of the district’s budget for $3,000 apiece.
Superintendent Gerrita Postlewait released an initial report on Nov. 24 stating that she found “evidence of a lack of accountability, ownership and discipline for staying within budget.”
Postlewait is expected to propose a package of budget cuts and policy changes in response to the shortfall at the next school board meeting on Dec. 14.
Reach Paul Bowers at 843-937-5546 or twitter.com/paul_bowers.