MEMO

To:

Members of the CPS Board of Education; Audit Committee; Mary Ronan, Superintendent; Laura
Mitchell, Deputy Superintendent; Gabe Lofton, Assistant Superintendent and Diana Whitt,
Treasurer

From: Chandra Brown, CFE, CIA

Internal Auditor
Date: December 5, 2014
Re:

SCPA Update

I've attached the Action Matrix that has been discussed in the Oversight Committee meetings and has been
updated as of December 5, 2014. Please review it in its entirety because it contains detailed information
about the action items communicated during the initial SCPA Fact Finding in September 2014. Many of
these items call for prompt action by various members of the District and School Administration.
Based on the Special Meeting regarding SCPA, held on October 20, the Superintendent indicated that she
would provide a list of items for SCPA; so, I defer any updates on academic related items to the
Superintendent and her staff; unless there is a direct financial correlation. I have included the academic
related items in a separate section of the Action Matrix for clarity and ease of review, feel free to let me
know if you think modifications are warranted. It would be beneficial for me to be provided
with information on the status of the academic items, to share with the Oversight Committee and LSDMC
to have full circle communications as we move forward in this transition.
It has been requested from the beginning of this process with SCPA that a written agreement be created
that details the terms of the $45K Emergency Loan from CPS to SCPA that includes the repayment plan. I
e-mailed the Treasurer on November 20, requesting a description of the process to manage the $45K
Emergency Loan, I have not received a response. An initial analysis shows that the spending from August
to November MTD is approximately $53K (August = $4,200, September = $11,740, October = $27,494
and November = $10,136) with the $1K allocated for each month removed, the expenditure amount is
at $49K which exceeds the agreed upon amount of $45K by $5K, so far. It also appears that this credit
card loan of $45K has been duplicated by the establishment of two general ledger accounts that are funded
with cash of $45K for seemingly the same purpose of production costs. I inquired of the Treasurer about
the purpose of these accounts on December 1 and have not received a response yet. This along with other
financial analysis conducted has negatively impacted the confidence in the School Administrations
management of funds and financial oversight.
The Arts School Network (ASN) was on-site from November 23-25 to conduct a review of SCPA. ASN
representatives Kristy Callaway, Executive Director and Donn Harris, ASN Member, Executive & Artistic
Director, Oakland School for the Arts provided their preliminary observations on Monday November 24,
with a full Executive Report forthcoming, which will be sent to the Board and the Superintendent with
copies going to the School Administration and the Oversight Committee.
The Friends of SCPA has officially dissolved as of November 27. Internal Auditor met with the
Secretary/Treasurer of the Friends on November 25 to discuss the entitys Final Accounting and ensure that
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the pro-rated portion of the Teacher restricted funds were paid in a check as committed. The check was
written and given to the school cashier to deposit with CPS; however, there is still an outstanding amount
due to SCPA Teachers in the amount of $11K along with other outstanding debts. General Counsel
communicated to the Friends on November 28 that they are to no longer access the SCPA Building and no
longer use the schools address.

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