A consulting firm studied the financial health and practices of the Petersburg City Public Schools and said the district has made progress since the hiring of a new superintendent
- A financial performance assessment of Petersburg City Public Schools revealed inadequate documentation of policies, a lack of formal training, and limited adherence to procedures.
- The school district has made progress since Superintendent Yolanda Brown took office, including hiring a Chief Financial Officer and implementing improved practices.
- Recommendations for improvement include formalizing protocols, improving communication, prioritizing staffing in key finance roles and implementing electronic systems for time management, expense tracking, and payroll.
Consulting firm Alvarez & Marsal delivered a presentation on Jan. 21 regarding the financial health of Petersburg City Public Schools after conducting a financial performance assessment of the school system. The firm clarified that this was not an audit of the district’s financial statements but an examination of its financial practices.
The assessment, which was funded through the Virginia Department of Education, identified several deficiencies in PCPS’ financial practices. These included inadequate documentation of policies, a lack of formal training and limited adherence to procedures. It also outlined key recommendations for improvement, such as formalizing protocols, improving communication and prioritizing staffing in key finance roles.
However, the report also noted that the district has made notable progress since Superintendent Yolanda Brown took office, including hiring a Chief Financial Officer for the first time and implementing improved practices.
“We are proud to have worked collaboratively with and supported Superintendent Yolonda Brown’s leadership in initiating and implementing this critical review, and we remain committed to working alongside her, the Virginia Department of Education, and our dedicated finance team to implement necessary improvements,” Ward 3 school board representative Kenneth Pritchett told The Progress-Index by email on behalf of the school board.
“The strides made over the past six months demonstrate our commitment to addressing challenges and strengthening our financial systems,” Pritchett added.
Progress under new leadership
Brown initiated plans for a financial controls assessment of PCPS in June after she was first appointed as then-interim superintendent.
The consulting firm conducted a preliminary assessment of PCPS’ finances in August and September, interviewing leadership, reviewing key financial processes, and analyzing policies, documents and data. It presented its initial findings to PCPS leadership for feedback in October and delivered the final report — including a summary of key findings, recommendations and updates on ongoing initiatives — to the PCPS School Board in January.
Key findings: Inadequate policies and procedures
A&M identified several deficiencies in the financial practices, which the firm categorized into five key areas:
- Policy: Policies and procedures are not adequately documented, leaving room for interpretation and error. Because policies and procedures are rarely documented below the “board policy” level, PCPS has an under-developed control environment and inconsistent methods to process transactions.
- Training: PCPS personnel are not trained on policies and procedures. No process owners interviewed by A&M recall ever receiving training on their role, responsibilities, and procedural expectations, which can lead to mistakes, inconsistencies, and a lack of coordination between departments.
- Adherence: Even when policies and procedures are known, key personnel at times opt not to adhere to requirements. Process owners have not been consistently empowered to require compliance, and leaders within PCPS have at times intentionally circumvented processes.
- Planning: PCPS has an inadequate budget planning process and limited fiscal monitoring. The current budgeting process is not clear or specific, and PCPS does not have a long-term financial forecast, making budgetary compliance and accountability more challenging.
- Leadership: The finance department has historically lacked leadership and experienced high turnover. This has contributed to lack of training and monitoring of adherence to policies and procedures.
Recommendations for Petersburg City Public Schools
Despite these deficiencies, the firm emphasized that PCPS has already started to take notable strides toward achieving better financial health under Brown’s leadership.
This includes the hiring of the CFO and budget analyst, the development of a cash flow forecast and other initiatives.
A&M also outlined several recommendations to help address existing deficiencies, all of which the division is planning to implement, Pritchett told The Progress-Index, and some of which they have already started implementing.
“We are aware that many of the recommendations related to hiring personnel, adding technology solutions, etc. will have cost. But, these are key investments in the future of our division and students,” Pritchett said. “At this time, the PCPS finance team is in the process of costing this out and once that ongoing process is complete, we will incorporate them into the budget process as well as consider additional policy and staffing changes and additions.”
A&M’s recommendations were listed as follows:
- PCPS-wide: Formalize and document protocols, improve communications and training, enact accountability practices to support compliance, and prioritize staffing in key finance roles.
- Accounts payable: Develop and implement accounts payable procedures documenting roles, responsibilities, process requirements and control thresholds.
- Employee expenses: Update outdated expense policy with clear thresholds and approval requirements, and implement electronic tracking and approval to replace manual, paper-based process.
- Payroll: Implement electronic time management system to track work hours and leave for all employees, and develop and implement payroll validation process.
- Human resources: Formalize human resources procedures, establish position control, and implement electronic record-keeping to replace paper-based process.
- Treasury: Assign personnel to designated cash management role to establish two-step authentication and develop and implement appropriate bank reconciliation procedures.
- Federal Funds: Formalize and implement standards and processes for reimbursement and claiming, institute evidence-based planning, and empower federal funds compliance function to hold departments accountable to standards and processes.
- Financial forecasting: Formalize the budget development process, re-institute a formal staffing model, and develop multi-year forecasting capabilities to support planning and manage risk.
- Procurement: Update and approve the Procurement Manual, increase staff awareness of requirements, and strengthen governance and accountability.
