Liberty schools face fiscal mess

District treasurer resigns abruptly; state says it’s missing financial records

By Jeanne Starmack

starmack@vindy.com

LIBERTY

The school district is facing the prospect of fiscal-emergency status, and its treasurer has resigned, leaving unanswered questions about why she didn’t give the state records for audits.

Tracey Obermiyer, who was with the district for about seven years, resigned in a letter April 29, said board President Diana DeVito. The resignation was accepted at the board’s May 5 meeting and becomes effective May 31.

In her president’s report for the board’s Monday meeting, DeVito outlined the circumstances that led to the resignation, which she said was a surprise. She also said the board has asked the state to certify the district’s debt to determine if it is more than 15 percent against the budget, indicating the district should be in fiscal emergency.

She told The Vindicator Tuesday that “we believe it’s more than 15 percent, but we just don’t know.” She said the certification process will take time, and the district may know by fall.

She said she does not believe Obermiyer is the cause of the district’s financial distress. The problems were caused by “the current system of funding public education in Ohio” and by the fact that voters turned down levies twice in recent years, she contended.

“Nevertheless, we have been formally notified by correspondence from the state auditor’s office that the district’s books were unable to be audited and that the information requested of our treasurer for over six months had not been provided,” her report states.

In a letter sent Feb. 7, the auditor’s office said it has been unable to obtain bank reconciliations from July 1, 2009, through June 30, 2010; bank statements for July and August 2010; Generally Accepted Accounting Practices financial statements and related footnotes; and budgetary documentation.

The auditor’s office threatened legal action.

The board also received a letter from the Ohio Department of Education that says Obermiyer didn’t provide reports to a department fiscal consultant who’s monitoring the district because of its fiscal-caution status, which it’s been under since January 2010.

ODE’s letter also said Liberty school board “regularly approves financial reports at your monthly meetings that may not have been reconciled with your bank ... other districts exhibiting similar fiduciary practices have found themselves in fiscal-emergency conditions, often without their prior knowledge or with little warning.”

DeVito said the board told the treasurer it would discuss the letters with her at its April meeting, but she didn’t attend the meeting.

DeVito then sent Obermiyer a letter April 26 seeking information about the condition of the district’s accounting and the state’s concerns. She said the letter included a directive that Obermiyer respond to the state’s requests.

Instead of an answer, the board got her resignation letter, DeVito said.

It appointed James Wilson, assistant treasurer of payroll, as interim treasurer.

An independent auditing firm is looking at the district’s records, DeVito said. She referred other questions about Obermiyer to Cleveland law firm Britton, Smith Peters and Kalail.

Atty. John Britton, who said he is the district’s regular legal counsel, reiterated that the district has no reason at this point to believe Obermiyer was engaged in any criminal misconduct. He said there is no criminal investigation going on right now.

The district believes “everything is there. We’re just organizing it and collecting it,” he said.

Obermiyer could not be reached for comment. Britton said her resignation letter indicated she was leaving for “personal reasons.”