REVOLVING DOOR AT FULL SPECTRUM MANAGEMENT RESPONSIBLE FOR BUDGET DISCREPANCY “THAT SURPRISED ALL OF US AT THE BOARD MEETING”? CHECK YOUR WORK!
In the approved minutes from its March 3, 2017 “Special Meeting” (published last week), the Grand Traverse Academy's board of directors revealed it was “pleased with the report made by FSM” and minimized the significance of Full Spectrum Management's budget-busting self-reported overspending (unforced) error back in February. (With a CPA and an attorney on the board, how is it they are buying this fluff?)
Noss, whose Full Spectrum Management, LLC will pull in nearly $850,000 in management fees this current fiscal year, essentially revealed he neglected to do what every 8-year-old attending the Grand Traverse Academy already knows to do: he didn't check his work.
Noss in as much admitted it in a March 2, 2017 letter addressed to the board and published last week on the Grand Traverse Academy's website:
“After considerable investigation by a number of individuals, we have gotten to the bottom of the budget vs. actual discrepancy that surprised all of us at the board meeting. To explain, we budgeted the principle and interest payments originally by spreading them over the entire year. Subsequently, we entered them again as they should normally be recognized at the time they were expensed. So the result was a duplication of expense putting us over budget.”
The letter (shown above) continues:
We are also transitioning from the traditional modified accrual or governmental accounting with 9 State Aid payments to 11 equal revenue payments. The first phase of this process was recognizing two additional months of State revenue that were brought into play in December, 2016.
This was done after the Board approved our latest budget revision reflecting the modified accrual method.
In other words, our current approved budget does not align with our new revenue recognition.
That being said, with actuals to date for January, we can forecast what we have left to spend to stay on budget by fiscal year end.
We have trimmed the budget slightly to stay relatively close to our original net income for the year.
The most significant changes are listed below:
In local, we are anticipating $24k from LSSU and $19k from the TBAISD.
Board of Education legal fees were reduced by $12k.
Advertising was reduced by $4k.
Office Supplies were reduced by $4k.
Operations and Maintenance was reduced by $11k.
Data Processing was reduced $6k.
Payroll has not yet been reallocated but the totals remain relatively unchanged.
In summary, by eliminating the duplicate expense and being prudent with our other expenses, we continue to be in good position financially moving forward.
In late February, Grand Traverse Academy board president Lesley Werth, who's warmed a board seat since the charter school opened its doors in the fall of 2000, said accountants for Full Spectrum Management (and its head, Mark Noss) reported the school would not close the fiscal year ending June 30, 2017 $185,000 in the black as budgeted.
“We need to reduce spending by $400,000 in order to meet that projection,” she told a local newspaper.
“As it sits right now, FSM is our management company in the immediate but we’re exploring our options,” Werth told the fishwrapper.
Word drifted out that the Grand Traverse Academy board was discussing a management company RFP, but the approved minutes from the board's February 22, 2017 meeting indicated Werth herself did a little wink-wink-nudge-nudge when discussing the pending coerced transition of Mark Noss and his Full Spectrum Management.
Taking the sting out of Noss being culled from the herd, Werth was quoted as stating “that the purpose in developing an RFP is not to replace Mark, but just to explore options.”
(Kind of like your husband telling you he loves you, but he just wants to date other women!)
In late February, Noss trotted out his initial preposterous excuse, then attributing the overage to spending on new curriculum, specifically a science, technology, engineering and technology program called Project Lead the Way.
Noss said the curricular spending ate into professional development funds.
He said the issue wouldn't affect plans to construct the science building.
Well, we know how that turned out!
On March 10, 2017, the Grand Traverse Academy board voted to end the non-binding agreement it had with Tortoise Credit Strategies. (Something tells me the termination was mutual, with Tortoise walking away from the deal due to the Academy's apparent lack of creditworthiness.)
It appears that Full Spectrum's accounting revolving door is still spinning: in early March, Grand Traverse Academy board treasurer Samer Bourdkani told a local fishwrapper the FSM accountants responsible for the mistake were replaced.
But Mark Noss said his in-house accounting staff left on their own accord and declined to elaborate about the big-league financial screw up.
“The errors were errors,” Noss said.
Within the last 12 months, Noss has burned through at least three staff accountants: a whistleblower who departed in March 2016 after revealing the ongoing business relationship and years long hush-money payments from Noss to convicted felon Steven J. Ingersoll, the former manager of the Grand Traverse Academy; a woman perennially plagued by five-figure federal tax liens; and another who left in January after less than six months on the job.
You'll notice as you read the March 2 letter that Noss, who had two explanations in as many weeks for this budget issue, made no changes to his own $850,000 pay package.
And there's apparently still no resolution to Noss' request for reimbursement of roughly $125,000 in “dead deal” expenses incurred by his private property development entity, MDN Development, LLC, during its fruitless two-year effort to construct a 29,000 square foot math and science building on the Grand Traverse Academy's grounds.
Wouldn't you love to know who his partners are?