As I review the financial reports of the Mid-Central Educational Cooperative, I find two seeming anomalies.
MCEC includes financial position statements in nearly all of the minutes it has posted online. The currently available data run from May 2011 to August 2015. Only two months lack financial reports: December 2012 (omitted from the January 2013 minutes) and November 2013 (omitted from the December 2013 minutes).
In every available financial report from June 2011 to March 2014, the beginning balance does not match the ending balance reported in the previous month’s financial report. For example, MCEC reported an ending balance in January 2012 of $2,396,755.32. MCEC then reported a beginning balance in February 2012 of $2,297,428.29. Apparently, from January 31 to February 1, $99,327.03… moved. Looking at other financial information on the documents available, I can’t tell where.
The beginning balance increases from the immediately preceding ending balance in just one report, June 2012, a gain of $192,442.56. Every other report from June 2011 to March 2014 shows the beginning balance decreasing from the immediately preceding ending balance. The average decrease is $110,807.75. Two discrepancies exceed $400K, in April 2012 and August 2013. The smallest discrepancy is the last, $300, in March 2014, after which these report-to-report discrepancies disappear.
The 32 discrepancies add up to $3,324,232.50.
Coinciding with these discrepancies are several entries for “Misc Revenue.” From May 2011 through March 2014, monthly entries for “Misc Revenue” range from $6,856.95 (Apr 2012) to $495,236.95 (Oct 2011). Over that 35-month period (again, Dec 2012 and Nov 2013 missing), “Misc Revenue” totals $6,016,154.27, over 23% of the reported revenues of $25,990,049.78.
In 14 of those reported 33 months, “Misc. Revenue” exceeded 30% of reported revenue (the maximum: 56.03% in November 2012). After March 2014 (the same report that showed the last month-to-month discrepancy), “Misc. Revenue” dried up, constituting more than 1% in only three of seventeen months.
I’m a math major, not an accountant, but I find it strange that…
- One month’s ending balance and the next month’s beginning balance would fail to match for 32 months; and,
- 23% of MCEC’s revenue could come from sources that aren’t given their own line item and are simply labeled miscellaneous.
- These anomalies disappear from the financial reports after March 2014 with no indication of a significant change in accounting/reporting methods in the contemporaneous minutes.
I have e-mailed MCEC director Dan Guericke to request an explanation for the balance discrepancies. I’ll let you know what reply Director Guericke or MCEC’s attorney Scott Swier offers.
* * *
By the way, MCEC started May 2011 with a cash balance of $2,405,839.10. At his last board meeting, business manager Scott Westerhuis reported an August 2015 ending balance of $300,301.53.
Update 2016.01.25 09:10 CST: Since receiving financial reports for the missing months, I have calculated the balance misalignments since May 2011 add up to $3,442,649.45.