McHenry County Regional Office of Education receives poor audit for seventh year in row

The latest financial audit of the McHenry County Regional Office of Education showed much of the same picture as previous years: poor internal processes and incomplete accounting statements.

The audit, released Wednesday, covered fiscal 2021, which was the last full year Leslie Schermerhorn was at the helm of the office before the McHenry County Board unanimously voted to remove her in November 2021.

The report’s release follows a federal lawsuit filed by Schermerhorn earlier this year alleging that the county fired her for September 2021 testimony before state lawmakers, in which she blamed the County Board for the regional office’s poor audits.

The county, represented by the McHenry County State’s Attorney’s Office, has denied that it violated her First Amendment rights or that the firing was the culmination of a “long-standing policy of undermining her [and] attacking her state-created position.”

County Board members at the time said her removal was tied to her performance in running the office, which included how money was handled.

As was the case in previous years, the audit released Wednesday said the office did not have sufficient internal control over its financial processes, did not comply with grant requirements, did not have adequate procedures in dealing with cash and did not provide a complete financial statement by the required deadline.

All four issues also were listed in the previous year’s audit. However, it is an improvement from what was listed two years ago, when the office also was flagged for not properly accounting for its grant funds.

County Board Chairman Mike Buehler, R-Crystal Lake, said he had not yet seen the audit, but it’s not unexpected that there may be some issues listed on it.

“We expect this will be the last audit that has those items,” he said. “We’re working hard to address them.”

McHenry County Regional Superintendent Diana Hartmann, who took over the job in January to replace Schermerhorn, said her office has contracted with Naperville accounting firm Lauterbach and Amen LLP to help complete the office’s accounting.

Earmarking transactions within the accounts to keep track of everything and eliminating the use of cash from the office are some of what is being done to strengthen internal processes and give a complete picture of the office’s finances, Hartmann said.

“We have to get everything caught up,” she said.

Although Schermerhorn was removed after a series of rough audits dating back to 2014, she alleged in the June lawsuit that the County Board “initiated and institutionalized a campaign to undermine” her and the office around the start of 2017.

The complaint lists a number of staffing issues and internal problems within the county during her tenure that she thinks caused her office to come up short in its finances.

“The County Board cultivated and aggravated the ROE’s historical accounting problems, which Schermerhorn had inherited with the position,” according to the complaint.

Schermerhorn, who was appointed to the position in May 2012, has said that the office losing its bookkeeper during fiscal 2018 was a key reason for the issues, which the litigation reiterates.

However, the failed audits date back to 2014. The audits throughout the past several years identify issues that include misclassifying almost $152,000 and allowing about $244,000 in transactions to go unreported. Another audit, conducted by McHenry County Auditor Shannon Teresi in July 2021, found 27 issues.

Schermerhorn on Thursday declined to comment given the pending litigation.

Buehler also declined to elaborate on any of what led up to Schermerhorn’s removal, citing litigation.

When Hartmann took office in January, she said there were “boxes and boxes of documents” that needed to be organized, and the office’s document room hadn’t been touched in decades.

“It pretty much appeared as really bad organization, for sure, and a lack of accounting principles,” she said.

Given the newest audit results, Hartmann said she doesn’t think she will be asked to testify but didn’t know if there’s a statute requiring it.

Although voters in 2020 favored restructuring the ROE, Hartmann said she would not support combining the office with another one.

The McHenry County Regional Office of Education serves a single county, similar to those offices in Lake, Kane, DeKalb, DuPage and Will counties. The remaining offices throughout the state serve multiple counties.

Hartmann said she was open to restructuring the office, adding that she would look at any proposal given and assess it.

“I think a lot of the public doesn’t know what the ROE does,” she said. “I think when you give up local control, you’re going to be lacking in services.”

Although Hartmann didn’t endorse any specific structural changes, she said she felt more sub-accounts were needed for the office’s finances. There are too many moving parts to keep track of everything with just the couple of accounts the office has.