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Press Release Ohio Auditor of State

Arts Academy Reveals More Inadequate Record-Keeping

Tuesday, January 10, 2012

Columbus – Incomplete and inaccurate records led to nearly $14,000 in findings for recovery and numerous citations in the 2010 audit of The Arts Academy released today by Auditor of State Dave Yost.

“This is why the reforms contained in the budget bill are so important,” Auditor Yost said. “Under the new law, more frequent oversight by a school’s sponsor should prevent records from deteriorating to this level.”

Three checks were issued to LED Consulting throughout the 2010 fiscal year in the total amount of $19,900.  Of this amount, the academy could provide supporting documentation for $8,000 of the expenditures, leaving $11,900 unable to be supported.

In addition, during the fiscal year, The Arts Academy maintained a contract with LED Consulting for treasury services for $48,000.  LED Consulting was paid a total of $50,000, and the academy could not support the additional payment of $2,000.  A finding for recovery was issued against Treasurer Edward Dudley in the amount of $13,900, in favor of The Arts Academy.

The academy received a number of additional citations related to poor record-keeping.  For example, time sheets for employees were not provided, and a statement of cash flows was not presented consistently nor did it agree with underlying financial statement data, among others.  State Foundation payments totaling $1,442,123 in FY 2010 were unsubstantiated because the academy was unable to provide documents showing how many students attended, how many hours the school was in session, student attendance sheets or documentation over enrollment/withdrawal dates of students.

The Arts Academy did not have an adequate internal control system in place to prevent misallocation or misstatement of academy funds, expenditures of funds contrary to the directives of the board and non-compliance with federal or state laws and regulations.

The academy, formerly sponsored by the Ashe Culture Center, was closed on June 30, 2011 by the Ohio Department of Education due to the inability to find a new sponsor.  The Arts Academy was placed on the Auditor of State’s “unauditable” list on March 22, 2011 because the fiscal year 2010 financial records were not adequate to complete the audit.  The completion of this audit effectively removes the academy from this list.

A full copy of this audit may be found online.

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The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,600 state and local government agencies.  Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.

Contact:
Carrie Bartunek
Press Secretary
614-644-1111