The Hindu Business Line : Why are school days frightful, desperate, wild and furious?

Edmund Burke said, "Example is the school of mankind, and they will learn at no other." Samuel Taylor Coleridge may not agree; he was of the view that to sentence a man of true genius to the drudgery of a school is to put a racehorse on a treadmill!

Accountants may not be true geniuses; yet, to sentence them to the drudgery of hair-splitting record keeping may be like putting racehorses on tweaked-up treadmills that move at a snail's pace. Which is what is happening in Milford, Connecticut, US, schools. For, they are learning how to do extreme accounting of funds received from advertisers.

"Welcome to Milford, `A Small City with a Big Heart!'" announces www.ci.milford.ct.us, the official web site of `the sixth oldest town in Connecticut'. History of the place dates back to February 1, 1639, when "the area then known as `Wepawaug' was purchased from Ansantawae, chief sachem of the Paugusset Tribe."

Fast forward four centuries, to look at a March 28 story by Frank Juliano on Connecticut Post Online (www.connpost.com). `Accounting goes deep on school soda records,' reads the headline and the report is about the Board of Education's insistence on putting under a microscope student activity accounts.

"Armed with a computer slide programme and a ream of handouts, administrators explained the difference between taxpayer-funded student activities and the private accounts, such as the controversial agreement between the city's public schools and Coca-Cola Bottling Co of New England," writes Juliano. The trigger for the special accounting education was an auditor's worry about how schools accounted for funds from a seven-year, $400,000 contract.

City audit

The minutes of a `regular meeting' of Milford Board of Education, held on February 13, has a paragraph on `City of Milford 2004-2005 Audit'. It speaks about `the management letter received from Scully & Wolf, the City's Auditor.'

The firm, established in 1973, has a staff of 25 professionals, and is "the largest provider of municipal audit services in the State of Connecticut," informs www.scullyandwolf.com. For the audit-avid, there is the `independent auditors' report' from the firm addressed to the Board of Finance, Town of Cromwell, on www.cromwellct.com/docs.

The 49-page report dated November 25, 2003, cites `Basic Financial Statements — and Management's Discussion and Analysis — for State and Local Governments', a statement issued by the GASB (Governmental Accounting Standards Board of the US) in June 1999. "The statement established a new reporting model for governments that is substantially different from prior reporting standards. This is the first year that the Town is reporting under the new reporting model... "

Another such report, dated January 19, 2005, is about the town of Manchester (www.ci.manchester.ct.us). `Financial highlights' mention that net assets of town's business-type activities increased by $.6 million, or nearly 1.3 per cent, while those of governmental activities decreased by $.2 million, or nearly 1.6 per cent. "In the Town's business-type activities, program revenues increased by $1.07 million (or 6.4 per cent) while expenses increased by 0.4 per cent." Wish we had such reporting by the local bodies closer home.

The coke connection

Scully & Wolf's `management letter' that worried Milford town had recommendations about the district's advertising contract with Coca-Cola and budget monitoring. The contract was about using the funds from the beverage company for seven goals — "enhance academic enrichment and scholarships, improve technology at the schools, additional or improved educational materials, school and campus improvements, student extra-curricular activities, educator and student reward/recognition programs, and physical fitness and nutrition education programs," as P. Russell, Deputy Superintendent of Operations informed the Board of Education in February.

"Although the Board of Aldermen created a special revenue account for the Coca-Cola funds that school officials can draw from, more than $1 million is raised and spent for student activities, in many cases by individual schools," writes Juliano, citing Russell. (An alderman is a member of a municipal assembly in a town or city, explains Wikipedia. "The title is derived from the Anglo-Saxon position of Ealdorman, literally meaning `elder man'.")

Revenues were from many sources, such as `tickets for a high school play' and `basketball scorebook'. Amazingly, this was "broken in 318 separate accounts and 3,000 sub-accounts." According to Russell, "Milford's keeps the most detailed records of expenses for student activities." And the system seems to be in a continual state of evolution; for instance, "manuals for how drama clubs and sports teams that sell tickets should handle the cash they receive are being prepared."

A letter to the editor of Milford Sunday dated early this month lauds the efforts of the Board of Aldermen. "Why would anyone be opposed to setting up a new account for a new and rather large amount of incoming money?" asks Stephen Borer, the letter-writer. "Education officials should cooperate with the Aldermen's efforts to make these processes as accountable and transparent as possible for the public."

No junk foods!

Meanwhile, there are developments that can hit soft-drink makers hard. "As of next fall, there'll be no more Pepsi and Fritos, Coca-Cola and Cheetos," writes Maudlyne Ihejirika on www.suntimes.com, reporting about the decision by the Illinois State Board of Education to ban junk food in elementary and middle schools. "Board members approved by a 7-2 vote the measure, which takes effect next school year and bans the sale of soda, chips and candy before and during the school day for pre-kindergarten through eighth grade."

According to Rod R. Blagojevich, Governor of Illinois, "Good nutrition helps children attend school more regularly, behave better when they're in school, and score better on tests." To cash-strapped schools, however, vending machine sales provide critical funds, points out Ihejirika.

A similar ban of fizzy drinks is talked about in the UK too. Is the company reacting? Yes, Coca-Cola has warned the education secretary it might withdraw its vending machines network from schools, as a March 3 story on http://news.bbc.co.uk informs. Coke has said that schools would lose money and pupils would suffer from the removal of such `a highly efficient country-wide beverage distribution system'. The impact would be "not only on pupils' hydration, but also on pupil behaviour," the company has alerted.

"School-days frightful, desperate, wild, and furious," says the Duchess of York in King Richard III. Dehydrated accountants would promptly agree.

AccountSpeak@TheHindu.co.in

D. Murali

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