Press Release  Audit Calls for Improved Accounting Practices at South Shore Educational Collaborative

Boston — State Auditor Suzanne M. Bump today released an audit which identified a series of poor accounting practices that violate state guidelines at the South Shore Educational Collaborative (SSEC).

The regional special education center is located in Hingham and provides education and services for students and adults from its 10 area member school districts and various other non-member districts. State law requires that the Treasurer of each city and town be solely responsible for paying municipal bills. The audit instead found that SSEC maintained accounts for nine of its member districts where it deposited and withdrew money on their behalf.  In two fiscal years SSEC processed more than half a million dollars in transactions from these accounts without proper local oversight, including $6,872 in erroneous overbillings, double billings, and other inaccurate charges. 

In addition, the audit found SSEC had arbitrarily allocated its administrative costs to its member districts and had misclassified approximately $2 million in expenses and revenues.

Other findings included:

• SSEC allowed a retiree to circumvent state limits on post-retirement earning limits by deferring more than $7,000 in compensation to the following year. 
• SSEC failed to collect $79,309 in retiree contributions for health insurance. 
• SSEC overbilled the Massachusetts Commission for the Blind $1,053.

Auditor Bump called on SSEC to amend its financial records, develop improved accounting practices, discontinue the use of all member accounts, and determine a plan to return held funds to school districts. SSEC has responded positively toward audit findings and stated that it is implementing the recommendations.

Today’s report comes as part of a series of audits of Massachusetts education collaboratives that collectively have detailed widespread problems with the collaborative system. In 2011, Auditor Bump issued a set of policy recommendations to enhance financial accountability and to improve oversight of collaboratives by state and local authorities. These recommendations were the foundation for major reform legislation signed into law last year by Governor Deval Patrick. 

The Office of the State Auditor conducts technical and performance assessments of state government’s programs, departments, agencies, authorities, contracts, and vendors. With its reports, the OSA issues recommendations to improve accountability, efficiency, and transparency.

Read the audit of South Shore Educational Collaborative here. 

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