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Santa Rosa school officials expressed dismay Thursday over the embezzlement at a charter school created to serve children in crisis, but said financial audits in recent years showed no indication of a large-scale theft.

Doug Bower, associate superintendent of Santa Rosa City Schools, said he learned of the arrest of Sheila Accornero, finance manager of the Kid Street Learning Center Charter School, just before Wednesday's school board meeting.

"Disbelief," he said. "I hate to hear this is happening. Particularly to Kid Street, which we've long regarded as a very valuable and very viable organization and one of our best charter school operations. At the same time, we know this stuff happens."

The small school is an independent charter in the Santa Rosa district. It has its own board, does its own hiring and operates at arm's length from the school district, which oversees its charter.

Some board members have expressed concern in the past that the school receives a significant amount of private grant money independent of state funding, amounting to as much as one-third of its yearly $600,000 budget.

<NO1><NO>Accornero, who started with the school in 2005, is suspected of taking nearly $400,000 through hundreds of checks, many involving forged signatures, written over at least three years.

"The numbers are pretty astounding," said Kim Agrella, executive director of fiscal services for Santa Rosa City Schools.

She said there was nothing that gave an indication "something like this is going on."

Bower said that while he didn't think anything was done wrong at the district level, he hoped lessons will come out of it for the future.

"It's a learning experience. It's a wake-up call," he said.

He defended the district's oversight efforts, saying, "We go above and beyond in what's required by law."

City school officials and the school board will determine if any district policies and procedures need to be altered in light of the investigation, he said.

All five charter schools in the district are audited annually by an independent, state-approved company.

Asked how the allegations of embezzling involving so many checks could be missed, Bower said an audit doesn't go over every financial transaction of a school. Samplings are done with the audit company requesting a variety of checks and financial information, he said.

The district business office then reviews each audit as well as other money-related information from the school, relying on the independent effort to tell officials if the school's finances appear to be on the up and up.

Bower said it was unclear to him if allegations involving Accornero included if she was designated to write checks, as well as balance the district's checkbook.

"It's a dangerous scenario," he said. "That's not good internal control," while acknowledging that small companies and schools often don't have the staff to create the separation required.

Internal control issues have come up in prior audits.

In the 2006-07 audit of Kid Street, "there was an internal control finding that addressed some issues they thought should be cleaned up, but nothing like this," Agrella said.

That finding showed the same person was approving purchases and signing the checks. The independent auditor said to protect cash assets a second person needed to be involved in the process.

District finance officials met with school officials to make sure that was fixed.

"It was fully implemented according to the next audit," Agrella said.

"It was a problem with the process and that problem was corrected," she said. "They were working on it, taking it seriously."

<NO1><NO>Other Kid Street audit findings were considered fairly minor and weren't financial, Agrella said. One involved payroll checks not being reported in a timely manner because they were being done by hand instead of online.

That also subsequently was fixed.

"There were no red flags in these really," she said. "These findings aren't necessarily uncommon especially for a small organization like that."

The school's finances for the last school year are due in September and an audit is expected to be available in December.

Bower expressed confidence in Principal Linda Conklin's ability to put the school back on a solid financial footing. "Linda is very resourceful and dedicated. She'll find a way to make it work, even if there's financial pain for awhile," he said.

The kids that attend the school sometimes are victims of family problems and to become victims of a school employee even was more unfair, he said.

"It's a sad story."

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