BOARD COMPLIANT...OR COMPLICIT?
Regular readers know this "brick shitting" Mark Noss email excerpt (referenced in Jennifer Dixon's February 8, 2015 Detroit Free Press article) is one of my faves.
I believe I can now answer this scandal's most burning questions: when exactly did that multi-million dollar gravy train leave the station, and how long did it run?
After a thorough examination of the Grand Traverse Academy's annual fiscal statements (twelve years: from 2002 through 2014), I have the answers—the 2006-2007 fiscal year, and six years.
Prior to its 2007 financial report, the Grand Traverse Academy's "accounts receivable" category consisted mainly of state school aid due from “governmental units”.
However, beginning with the audit report issued in October 2007, the Academy began listing separately amounts due from governmental units and other accounts receivable. In addition, my analysis reveals that "prepaid expenses" began making a significant impact that year.
The chart below, developed using data generated from my review, indicates that Steven Ingersoll began racking up unpaid "accounts receivable" amounts from the Grand Traverse Academy during the fiscal year that ended June 30, 2007.
* Formerly a related-party receivable; reclassified in 2013 as "prepaid expense"
** Written off as a "bad debt"
The "pre-pay that has sat on the books", as Noss so inelegantly termed it, ballooned to over $3.5 million dollars by the end of the 2012 fiscal year—after sitting (in varying seven-figure amounts) on those GTA "books" for over six years.
On June 13, 2013, Grand Traverse Academy attorney Doug Bishop sent Ingersoll a "demand letter", seeking the immediate repayment of $3,548,319.
Although the Academy's 2013 financial report doesn't include details of any actual repayment by Steven Ingersoll, when its report was finally issued in late October the Academy's $3,548,319.00 2012 Steven Ingersoll "related party receivable" had been reclassified as a "prepaid expense" and cut to $2,338,980 ― a $1,209,339 reduction.
The Academy's finances often required Ingersoll to make year-end adjustments, with fee rebate amounts booked as receivables.
But Ingersoll never completely repaid his receivables, continuing a circular pattern of fee overpayment/rebate booking/unpaid receivables for nearly six years!
And then, after dicking around for months, the Grand Traverse Academy board let Ingersoll off the hook last year, writing off nearly $1.7 million dollars he still owed as a "bad debt".
Was a gravy train, or is it a runaway train?