After you read it, ask yourself why they'd do that — and then tell me your answer.
Q. Would you describe Steven Ingersoll's relationship to the Grand Traverse Academy board over the 15 years that you observed it.
A. I think it was a close relationship. Often there were more than one person on the board who was a close friend of Steve's. I think it was an informal relationship. It was a trusting relationship. The board members were given the reports from Steve or the budget to approve or to amend, and I think for the most part they -- we all totally believed the sheets in front of us.
Q. Today did those sheets in front of you tell you the whole story?
A. I don't believe so. I think one of the issues is that there were never supporting documents presented. In other school districts where I've worked, when the board would take budget action, I mean, there would be the utility bills and there would be the check register of specifically what was paid and where the money had gone.
Q. And was that absent in the 15 years that you were associated with the Grand Traverse Academy in observing the board interacting with Steven Ingersoll?
A. Yes. The only documents were those QuickBooks or various printouts provided by Steve.
Q. Did the accountant that was retained by the board, that is Mr. Henning -- do you know how it was he became the accountant for the board in the first instance?
A. Steve recommended him to the board.
Q. And did he ever, that is Mr. Henning, excuse me on the pronoun there, did Mr. Henning ever discuss with you the lack of invoices and checkbook registers for the performance of his duties?
A. Not until after the investigation had started and I was questioning him, and also he was presenting some recommendations for the board and the school to follow in order to protect themselves from any financial mishaps, and so one of the recommendations made was that personnel costs, all costs should be paid only based upon invoices from Smart Schools, and he said that he had never been able to receive any invoices from Steve.
Q. Well, once the investigation became known, the board received recommendations from a variety of sources?
Q. And what were those sources?
A. Well, one would be Doug Bishop, one of the attorneys on retainer. Another would be Kari Costanza and Meg Hackett who were other attorneys from Thrun that was on retainer. Tony Henning as the accountant at the time and also Dennis Gartland & Niergarth, who was the accounting firm that was hired by the board to kind of take a fresh look at everything and help the board figure out what had happened.
[NOTE: As the June 2013 Thrun Law Firm invoice above reveals, legal advice from the firm cost the Grand Traverse Academy nearly $15,000 in less than two months. That advice was ignored, with the board instead opting to support the image and reputation of Steven Ingersoll.
Q. Were you aware of any recommendations being made by either Lake Superior State University or the Michigan Department of Education?
A. I don't know of recommendations from the Michigan Department of Education. Lake Superior State University was recommending an open bidding for management contracts with a delineation of services. They were also recommending that no money be given to Smart Schools from Grand Traverse Academy until the prepaid had been solved or paid back.
Q. Either worked off or actually paid off?
Q. Did the GTA board follow that advice?
THE COURT: Those are two different things.
MS. PARKER: Yes.
THE COURT: Very different things. If we could find out what the witness's specific understanding was.
BY ASSISTANT U. S. ATTORNEY JANET PARKER:
Q. Can you answer that.
A. I'm not sure if this is what you're asking. One of the recommendations that was made by Lake Superior State University, Doug Bishop, the attorneys from Thrun, Tony Henning and DGN, the accounting firm, a unanimous recommendation from all of them was that no money be given from Grand Traverse Academy to Smart Schools until the prepaid had been paid off in some fashion.
Q. How was it to be paid off?
A. By Smart Schools Management continuing to manage Grand Traverse Academy without taking the 12 percent management fee or any portion of it.
Q. And did Smart Schools Management work off the entire obligation --
Q. -- or do you know?
A. When I was still there, it had not yet been worked off. The board, at a November, 2013 meeting, when they heard the recommendations of the DGN accounting firm, they went through those and then they went through Steve's management response to the audit and within that management response to the audit was a request for -- I don't know the exact amount, I would say $160,000 to be given to Smart Schools in cash in addition to allowing the working off of the prepaid amount.
[NOTE: Mentley's recollection is contradicted by documents, most exclusive to Miss Fortune.
In preparation for this report, Miss Fortune reviewed Grand Traverse Academy financial documents, including a November 25, 2013 letter from Doug Bishop, the Academy's former attorney, to Michigan Department of Education auditor John Brooks.
The letter revealed that although the Academy had determined it would not pay Steven Ingersoll's Smart Schools Management, Inc. its management fees until his debt to the school was paid, there was one exception, and it wasn't for $160,000.
Bishop's letter revealed the Academy board had authorized a cash payment of "approximately $332,000 in pre-obligated, annual debt service of SSM with regard to GTA has agreed to pay to SSM." ]
Q. What was your understanding what that was for?
A. It was my understanding that Steve needed that money both to live on, as well as to service a debt at Traverse City State Bank.
Q. Well, let me back up a bit. You were aware of the recommendations that were made by Doug Bishop, the attorneys from the other firm, the new audit firm, DGN I'm going to say, Lake Superior State. Were those recommendations followed by the board?
A. No, they were not all followed by the board.
Q. What recommendations were not followed by the GTA board?
A. Bidding out of the management contract with a delineation of services, no cash to Smart Schools until the prepaid was paid back were not followed.
Q. What was your understanding as to why that was the case?
A. Because Steve explained to the board that he needed that income to live and to pay the debt at Traverse City State Bank.
[NOTE: That smell? It's not the earthy smell of soil after a rain storm, it's bullshit.
After receiving the 15-page letter issued on May 30, 2013 by the Thrun Law Firm after its May 20 meeting with Ingersoll, Mentley and Noss, the board rejected the law firm's advice and fell into line with Ingersoll.
Even though Ingersoll admitted during that May 20 meeting that he owed the Grand Traverse Academy $3,548,319, less than six months later the board handed him $332,000, because “he needed that money to live on”.
Cry me a fucking river!]
Q. Well, what was your understanding as to why he needed that income when he had other financial interests.
A. I don't think that other financial interests were discussed at the board level.
Q. Let me ask you this: What was your understanding as to why the board accommodated Steven Ingersoll's financial concerns rather than complying with the recommendations?
A. I think they trusted Steve. They did not want to think that there had been a misuse of funds, and they wanted to work together to help the problem resolve.
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