Audit finds ‘undeposited collections’ by FFA Chapter
Nick Johansen & Tess Nelson
The Red Oak Express
The report on a special investigation of the Future Farmers of America (FFA) program within the Red Oak Community School District was released Tuesday, Aug. 17. King, Reinsch, Prosser & Co, L.L.P. provided the audit for the period July 1, 2019 through April 30, 2021, and conducted the investigation.
“The special investigation was conducted as a result of concerns regarding financial transactions related to FFA events that were not properly collected and deposited or expended in accordance with District policies by the District’s former FFA Sponsor,” read the report.
King, Reinsch, Prosser & Co., L.L.P identified a total of $6,264 of undeposited collections during the period examined, comprised of: $2,439 of undeposited collections related to the FFA Annual Toy Sale fundraisers; $2,700 of undeposited collections related to District FFA proceeds that were deposited in non-District accounts; and $1,125 of cash provided to the former FFA Sponsor from non-District FFA organizations that was not deposited with the District.
The firm also reported that analysis of other fundraising activity suggests an additional amount of undeposited collections exists, but it was not possible to accurately quantify that amount due to insufficient records related to those events.
Lastly, $146 of improper disbursements related to FFA events during the period examined were identified.
Additional analysis of other FFA event activity suggests an additional amount of improper disbursements exists, but it was not possible to accurately quantify that amount due to insufficient records related to those events, continued the report.
The report includes recommendations to strengthen the District’s internal controls, compliance with District policies regarding cash receipts and fundraising, and improve overall operations, such as ensuring sufficient supporting documentation is maintained for all fundraising activities.
Copies of this report have been filed with the Iowa Auditor of State and the Montgomery County Attorney’s Office. A copy of the report is available for review in the Office of Auditor of State and on the Auditor of State’s web site at auditor.iowa.gov/reports/audit-reports/.
On Aug. 18, the Red Oak School Board held a special meeting to approve the audit report as presented. Former FFA advisor Alan Spencer spoke during the meeting, and addressed some of the findings of the investigation of the program, and emphasized that it was a program.
“The entire document reads as if I am the sole person responsible for the Red Oak FFA Chapter. That is a false assumption. The Red Oak School District had two Ag Ed Instructors and FFA Advisors from 2018 to 2021. The second person, Tess Mittag, is not listed in the document, said Spencer. “If this is truly an investigation into the “program,” then both FFA Advisors should be listed and investigated. On page five of the report, I am listed as the person “ultimately responsible” for the financial responsibilities of the FFA Chapter. There were two FFA Advisors. I had seniority, but there was never any differentiation for a lead advisor between the two of us.”
Spencer then spoke about the three main topics in the report: funds that were not deposited; checks that were deposited into a different account; and money received from the FFA alumni.
“First, I did have money in my office in a locked file cabinet. I have admitted that. I take responsibility for my actions. However, the school board policies related to that issue were never explained to me during my 10 years at Red Oak,” Spencer explained. “I know that school staff found $1,000 in the desk of a recently retired teacher. The person who told me said that the Central Office staff said they were not going to worry about it because he was retired anyway,” commented Spencer.
He also advised the board that he did spend money on behalf of the FFA to purchase items needed for a variety of FFA activities.
“I did not keep all receipts for those purchases. For that, I am truly sorry. However, the school board policies related to that issue were never explained to me during my 10 years at Red Oak. The FFA Valentine’s Day Package partnership with Fareway in 2020 was mentioned in the report and the findings said there was no record of a deposit,” advised Spencer. “This activity was completed by Ms. Mittag and her Ag Business class. The photo shows Ms. Mittag and a student receiving check number 4979 for $100 from Al Thole, the Meat Manager at Fareway. The check was deposited. It was probably lumped with other funds.”
On the issue of fruit sales, Spencer said he and Mittag kept records in different ways, and he would have gladly assisted, but no one asked.
“I have been trained since I began at Red Oak that all deposit slips were to be completed by the FFA Advisor and then taken to the AD Secretary or AD. I have taught at two other schools and never had to complete this step myself, stated Spencer.”
Spencer also discussed the investigation’s findings regarding the Red Oak FFA Toy Show, which was adopted as an activity by the FFA chapter, and said he was not involved in the most recent event.
“The 2020 Toy Show was not operated by me as I had heart surgery on January 22, 2020, and Ms. Mittag was the lone FFA Advisor at the event. I was not allowed to return to work for five days following surgery. Again, if this is an investigation of the program, that Toy Show was completely operated by her on the days around January 25, 2020, and she is not mentioned,” Spencer said.
The second main topic was related to checks deposited in a savings account operated by the Red Oak FFA Alumni. Spencer also addressed that portion of the audit report.
“Those checks should not have been deposited in that account and should have been put in the FFA Activity account. That money should be sent back to the FFA Activity account. This could have been solved with a conversation, but no one wanted to do that. They only wanted to cause an investigation. Ms. Mittag also received funds from the FFA Alumni, but that is not mentioned in the report,” Spencer stated. “Appendix 4 is cited as a way that the FFA Alumni assisted with meals at the Iowa FFA Leadership Conference on April 18, 2021. I was not at the conference because I was on administrative leave for 19 days at the time. Ms. Mittag was the FFA Advisor who took the students to Des Moines.”
According to Spencer, It was mentioned multiple times in the report that the Alumni asked for FFA Activity account balances repeatedly. Spencer said that was not true, and it would have been easy to make reports as the Central Office sent a monthly balance statement to all teachers.
Spencer also discussed with the board the third main topic of the audit report, which was related to money received from the FFA Alumni for FFA trips.
“When I started in 2011, the FFA Alumni had already established different ways that they provided funding for FFA events and scholarships. I just followed the past practices. In 10 years, no one ever mentioned to me that it was school board policy that money from a booster club had to be immediately deposited in the activity account. No one. I have had three superintendents, three principals, three assistant principals, and numerous activities directors in that time. Yet, here I am being accused of something I did not even think would be wrong,” Spencer said. “I know that money has been given to coaches and sponsors in the past from various booster clubs. I have heard stories. I even had an administrator tell me how he just told a coach that they could not take money from a booster club before going to a state event, which was a practice that had been done for years. They were just told to stop it. That coach was never put on 19 days of administrative leave like me.”
On the issue of the $146 of improper disbursements from a credit card, Spencer said a conversation or reminder could have cleared the subject. He said he commended the board for taking steps to create documents that will better train the staff on how to properly handle activity funds. However, for him, it was too late.
He also expressed disappointment in what he perceived was a lack of communication, that a review of the program did not include both FFA Advisors, and he said he was greatly disappointed that two of the FFA Alumni officers took matters into their own hands and did not inform their membership.
“I truly apologize and have repeatedly apologized both privately and publicly, but I am disappointed in the manner in which I was treated,” Spencer said.
Superintendent Ron Lorenz discussed the details of the audit, and the monetary amounts listed above that were noted in the report.
“The auditor made several useful recommendations, many of which we have already implemented, such as implementing control procedures to ensure all employees collecting money review the policy of the district before they participate in any fundraising activities or collect money,” Lorenz advised. “Those procedures include clearly requiring daily remittance of cash or checks, requiring cash or checks be stored in the building’s safe or vault, requiring fundraising forms that reconcile corrections, deposits or purchases, and other expenses, and requiring all outside organizations and affiliates to obtain prior approval from the district before conducting fundraisers. They also suggested having employees sign an acknowledgement of their understanding of the policies on an annual basis.”
Lorenz said the audit noted the district had already developed and implemented an activity fund manual that addressed all but one of the recommendations, and Lorenz said they were proposing revisions to board policy that would address the fundraising permission requirements that were suggested. The auditors also recommended the district implement procedures to maintain a current listing of approved fundraising events for all student organizations, so the district could verify the fundraising policies were being followed.
“We are proposing an amendment to the policy that we would present to the board at least twice per year, once per semester, every included fundraiser that’s on the books, which will require people to get those things planned out in September. It will also give us an idea of how saturated our fundraising has become, so we don’t go to the well too often. We don’t want to wear people out,” Lorenz commented.
Lorenz also said the audit firm was simply told to audit the books, and that it was independent of the administration. The board accepted the audit report as presented.