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Holland schools address audit

The Holland School Board approved a corrective action plan for a highly critical state audit by the state comptroller, but some board members felt the action didn't go far enough.

Superintendent Dennis Johnson said the district's response, required by the state comptroller, had been reviewed by the finance committee and addressed all the auditor's concerns, which included overestimating expenses and underestimating revenues, retaining an excessive fund balance and missing state aid opportunities.

But board member Stephen Welk said the corrective action plan should have included language to address capital project funding. He referred to a previous board decision in which it approved a transfer of $2 million in fund balance to a capital project fund after voters rejected the referendum to establish a $2.5 million capital reserve -- a move cited by the auditors for its lack of transparency.

However, board member Michael Liddle was satisfied with the corrective plan.

"That is very subjective on the auditor's part. It's his opinion," Liddle said.

Fred Thurnherr countered, "It's not opinion when you're talking about transferring $2 million to a capital project."

The board approved the corrective action, 4-2, with Welk abstaining.

However, trustees pressed Johnson about quickly enacting one of the plan's key points: an operational checklist to track financial deadlines.

Among the auditor's criticisms was the loss of $400,000 in aid because the district missed a filing deadline.

Johnson said he would compile and provide a checklist for the board prior to the June meeting and would then report to it on that checklist quarterly. That timetable was rejected by the board, which asked for a monthly update instead.

In other matters, the superintendent informed the board that $185,000 will be coming back to the district in a partial restoration of state aid.

However, since the spending plan for 2011-12 has already been approved by the board, Johnson said, the decision about how to use the money will not take place until August, when the tax levy is set.

At that time, the board can decide to use the funds to lower the tax levy, restore programs, or do a combination of both, he said.

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