Part one of a two-part series.
Madison County Commissioners voted unanimously late last month to approve an external audit of the Ennis School District, that vote coming after a request by Shelly Burke, Madison County Treasurer and County Superintendent of Schools.
Burke requested the audit after encountering what she calls deceitful financial practices by the Ennis School Board and its superintendent Doug Walsh surrounding the construction of a new school building costing upwards of $10,000,000.
Burke says that the Ennis School District is taking funds from Adult Education and Transportation funds - levied monies explicitly reserved for instruction and home-to-school transportation, respectively, and moving them into the school's flexibility fund to build the school.
"It's very deceitful because taxpayers don't know what's going on," said Burke. "I don't know any school in the state that's been built without a vote. And that's just what they're doing. They shouldn't have moved that money."
Taxpayers did vote in favor of creating a building reserve fund in 2010. That passed, and now each year for the next five years $270,000 in Madison County property taxes goes into that fund.
That still leaves a significant shortfall in funding the $10,000,000 school construction project.
Big Sky area homeowners' property taxes - totaling $3,389,546.88 in 2010 - go into all of the school funds in Ennis. Almost 80 percent of Madison County school district income comes from Big Sky area property tax payers.
Madison County Commissioner Jim Hart said that the Board of Commissioners approved the audit request in hopes of clearing up some of Burke's questions.
"Personally, I questioned the Board of Commissioners authority to request an audit, specifically questioning the separation of duties/authority between Boards of Commission and School Boards," said Hart. "I also raised a question regarding the willingness of residents outside the Ennis School District to pay for such an audit. The Office of Public Instruction has found no wrong-doing in the Ennis School District's accounting practices; while that is the case, there are some who still question; the Board of Commissioners is in hopes that ANY questions may be laid to rest."
According to Burke, typically, when a school district wants to build a new school, they hire an architect. They procure distinct plans for the construction. Then the project goes to a vote. The new school being built in Dillon, a class-A district, cost $9,000,000. A blue print was drawn up, it was voted on, and approved.
But that's not how things happened in class-C Ennis, Burke said,
"The county recently voted down a $10,000,000 bond to build an new Law and Justice Center and expand the courthouse," said Burke, sitting at her office in the 125-year-old Virginia City Courthouse. "So why would they go ahead and build a $10,000,000 school? If the community wanted to build a school with a pool in each class, that's their business, if they voted for it. But these people didn't vote for this new school. The whole thing is mind boggling. Everyone thinks I have a vendetta, but that's not the case. I don't have a problem with the new school, I just have a problem with how we're getting it."
Multiple attempts to contact Walsh for his perspective on the issue were unsuccessful.
The Ennis School District used to keep their funds at the Madison County treasurer's office, but in July, 2010 they moved it into a private account. School construction began immediately after the transfer.
"There's nothing illegal about this," said Burke, "But it takes all the transparency out of the deal."
The Ennis adult education fund was brought to the attention of the Office of Public Instruction in 2009. The OPI sent a letter to superintendent Walsh on March 31, 2009, communicating their concerns about the fund based on the district's Trustees Financial Summary and budget reports since the fund was initiated in 2005. In 2005 6.99 mills going into the Adult Education fund totaled $171,678. By 2009 there were 36.37 mills bringing in an income of $1,777,252. The budget for the program was $1,811,979 in '08 - 1.4 percent of which was spent.
Most schools in Montana have one or two mills for adult education, Burke said. There's a little over 200 people signed up for the classes that are being taught in the old school building.
For the past 16 years the only person who has looked at the Ennis books was independent auditor Ross Stalup. Now Madison County Commissioners are lining up possible candidates to externally audit the district, and the hope is that they'll have the audit completed quickly - by the end of the month ideally.
In part two, a lawsuit filed by a Madison County resident questions the validity of contracts related to Ennis School Board superintendent Doug Walsh.