Several DLA Board Members Did Not Comply With Reporting and Training Requirements.

Audit recommends that the board's governance committee establish a formal process to ensure members are in compliance with training and filing requirements.

Overview

The governance committee of the DLA board of trustees did not ensure that all board members complied with statutory financial and conflict-of-interest reporting and training requirements for Commonwealth charter school board members. The Commonwealth’s requirements are intended to ensure that charter schools operate in accordance with established laws and regulations. Noncompliance with statutory requirements may result in board members not being aware of their obligations and responsibilities and puts the school at risk of losing its charter.

DESE developed the Web-based Board Member Management System to monitor board members’ compliance with statutory requirements. Charter schools are required to submit documentation to DESE that supports compliance with these requirements. DESE provided us with a report that indicated the compliance status of DLA board members during the audit period. From this report, we identified the following compliance issues related to our judgmental sample of 8 of the 14 people who had been members of DLA’s board of directors during our audit period:

• Only 14 out of the 22 annual financial disclosure forms that should have been filed during our audit period were submitted.
• Only 12 out of the 22 annual written acknowledgements of receipt of the Summary of the Conflict of Interest Law for State Employees that should have been filed during our audit period were submitted.
• Only 2 out of the 8 board members in our sample completed the required Conflict of Interest Law Online Training Program.

Authoritative Guidance

DESE provides guidance on its website regarding the obligations and responsibilities of Massachusetts charter school board members. Regarding financial disclosure, the site states,

Trustees must file a financial disclosure form annually with (1) the State Ethics Commission, (2) the Department of Elementary and Secondary Education, and (3) the city or town clerk wherein the charter school is located. . . .

Trustees must file the disclosure within 30 days of becoming a member of the board of trustees, by September 1 of each year thereafter that the person is a member of the board and by September 1 of the year after the person ceases to be a member of the board.

Regarding the Conflict of Interest Law,⁵ DESE’s website states,

As special state employees, trustees must annually review and provide written acknowledgement of a summary of the Commonwealth’s Conflict of Interest Law.

And regarding Conflict of Interest Law training, DESE’s website states,

Every two years, trustees must complete an online training program on the Commonwealth’s Conflict of Interest Law. . . .

Trustees must complete the training within 30 days of becoming a member of the board and every 2 years thereafter.

Finally, according to Section 5.2.2 of DLA’s bylaws,

The Governance Committee shall oversee the quality of the decisions of the Trustees and Trustees’ self-management. The Governance Committee shall . . . oversee Trustee orientation and education, and conduct periodic evaluations of individual Trustees and the Board as a whole.

Reasons for Noncompliance

The board’s chair could not explain why several board members did not meet all of the training and disclosure requirements. We did note that the board’s governance committee, which should oversee board member education, does not have a formal process of routinely assessing each board member’s compliance with these requirements.

Recommendation

The DLA board’s governance committee should develop a formal process of routinely assessing each board member’s compliance with all training and filing requirements and ensuring that all board members comply with these requirements.

Auditee’s Response

All current Board members are in compliance with mandated financial and conflict-of-interest reporting and training requirements. The Board’s Governance Committee has established annual compliance review for all Board members to ensure that all are current with all statutory reporting and training requirements.

Auditor’s Reply

Based on its response, DLA’s board is taking measures to address our concerns in this area.

5.    Chapter 268A of the General Laws places restrictions on what state employees may do on the job, after hours, and after leaving public service.

Date published:	November 19, 2018