06/26/2013 – Marcus Turk Testimony

• Judge Maxwell Wood
• Witness – Marcus Turk
• Dr. Walker’s Attorney – Danielle Bess Obiorah
• State’s Attorney – Kevin Bradbury with the Attorney General’s office.

Summary of Testimony by Marcus Turk
Marcus Turk – I started with DeKalb Schools in 1996 and left June 30th 2012. I was in the finance department the whole time and CFO for just over 5 years.
Dr. Walker’s Attorney, Danielle Bess Obiorah – Was Dr. Walker on the school board at that time
Turk – Yes
Obiorah – Did you work with Dr. Walker and Dr. Atkinson?
Turk – Yes. I worked with Dr. Atkinson for 2-3 months.
Obiorah – Does the administration prepare the budget.
Turk – The finance department, headed by the CFO, prepared the budget under the direction of the Superintendent
Obiorah – How does the administration provide the board a copy of the budget?
Turk – When I was CFO, we started early in the school year Oct, Nov, Dec we try to gather enough information to provide an analysis of the direction the funds may be going. As information came in, we would provide that to the Superintendent and the Superintendent would provide that to the board. Once we got an idea of the revenues we tried to make sure expenditures went to a meaningful purpose fitting within the revenues the best we could.
Obiorah – Did the board have any input into that process?
Turk – Yes. The board had a budget and finance committee. They had input. They reviewed the budget information for meaningful and relevant data and present that information to the full board.
Obiorah – Was Dr. Walker on the budget committee when you were CFO?
Turk – Yes
Obiorah – Did you work closely with the budget committee?
Turk – We presented the information to the committee. The committee made recomendations to the Superintendent. We were available to the board for questions.
Obiorah – Did Dr. Walker micromanage the budget process?
Turk – No
Obiorah – Did Dr. Walker do anything to make you believe he was unfit to be on the board of education?
Turk – No
Obiorah – Was Dr. Walker ever chair of the budget committee
Turk – Yes, at some point
Obiorah – Did your communications with the board follow the chain of command policy?
Turk – Yes
Obiorah – When you were CFO, did the district ever have an end of the year deficit?
Turk – No
Obiorah – How many times has the DeKalb Schools had an end of the year deficit?
Turk – 1. Fiscal Year 2012, the year I left.
Obiorah – Who was the Superintendent at the time?
Turk – Dr. Atkinson
Obiorah – Why was there a deficit in that year?
Turk – The revenues came in short of expenditures. One of the reasons is because multiple people were getting paid for the same position classification that weren’t budgeted. There were also a number of consultants hired that were not part of the budget. Dr. Atkinson did not adhere to the budget she inherited.
Obiorah – What do you mean by multiple people with the same classification.
Turk – Dr. Atkinson brought in new staff and consultants, but left the old staff there. The old staff was budgeted for and the new staff was not, hence the first end of year deficit in DeKalb Schools history.
Obiorah – Did Dr. Walker have anything to do with hiring any of these new people?
Turk – No. Human Resources was directed by Dr. Atkinson to bring these people in.
Obiorah – What is the role of Georgia Department of Audits and Accounts?
Turk – They have audited DeKalb Schools for over 25 years.
Obiorah – Did they give an unqualified opinion
Turk – Yes. They gave an unqualified opinion each year. The first year I was involved in an audit there were 9 findings. The next year it dropped to 3 then to 0. In the history of DeKalb Schools, that was the first time there were no findings. It then went to 1 and back to 0. The only 2 years there were 0 findings with DeKalb Schools happened under my direction as CFO.
Obiorah – Does that mean DeKalb Schools met all of the state’s financial requirements?
Turk – Yes
Obiorah – Did you work with the district purchasing textbooks?
Turk – Yes
Obiorah – Are you aware of the claim the district spent money on books they never received?
Turk – Yes. That is unfounded. The claim comes from a lack of understanding and a lack of questioning regarding the process in which textbooks are acquired. DeKalb Schools entered into a lease to acquire textbooks. We were able to acquire textbooks for kids in this manner when other districts were not able to get textbooks. We did this to make sure our payments matched what we were getting for textbooks and make sure textbook costs didn’t vary widely from year to year. Through ??? Lynch, we purchased the textbooks that were adopted by the board of education. Then submit invoices to Merill Lynch and Bank of America and cancelled check copies of the books that were purchased before we could get imbursed for the textbooks.
Obiorah – What happened to the books once they were purchased.
Turk – They were delivered and signed for at the textbook warehouse. That’s what the shipto invoices showed.
Obiorah – Are you aware of board policy DJE?
Turk – Yes
Obiorah – Are you aware that it changed in March of 2012?
Turk – Yes
Obiorah – Were you with DeKalb Schools at that time?
Turk – No.
Obiorah – As CFO, did you provide reports in accordance with policy DJE?
Turk – Yes
Obiorah – What was policy DJE?
Turk – It was the purchasing policy.
Obiorah – Here is the new policy. How is it different?
Turk – The approval level went from $50K to $100K. The staff who approved the purchase was also added.
Obiorah – Did you provide the reports?
Turk – Yes, monthly.
Obiorah – Why did the district adopt a new policy?
Turk – There was a request from Dr. Atkinson to increase the approval level from $50K to $100K.
Obiorah – Who created the wording of this policy?
Turk – I wasn’t there at the time, but typically the finance department would put a policy like this together.
Obiorah – Did the policy sit out there for 30 days?
Turk – Yes. The administration had 30 days to review it.
Obiorah – Did you give presentations at board meetings?
Turk – Yes
Obiorah – Was Dr. Walker ever inappropriate? Did he ever yell at you. Did he instil fear in you?
Turk – No
Obiorah – No more questions.
Bradbury – Did you testify that the DeKalb Schools never had a deficit with the exception of the year after you left?
Turk – Yes
Obiorah – Objection. That misrepresents what I said. I asked if they ever had an end of year deficit.
Judge Maxwell Wood – I understood where you went and where he’s going.
Bradbury – Are you familiary with the term balanced budget?
Turk – Yes. It means at the end of a budget cycle, you still have fund balance.
Bradbury – Are you familiar with differences in accounting proceedures in how you report debts and expenditures?
Turk – Yes
Bradbury – Do you agree that delaying the reporting of services of debt, then logically the end of year balance wouldn’t include those debts.
Turk – Yes.
Bradbury – Are you familiar with the KPMG report.
Turk – I’ve seen it
Bradbury – You said there was a line of credit taken out for the use of textbooks. Was that line of credit $25M?
Turk – Yes. In that range.
Bradbury – How much of that line of credit did the district spend?
Turk – I don’t know. It was at least $8M when I left.
Bradbury – To get reimbursed, you said you had to submit invoices.
Turk – Yes
Bradbury – Does it suprise you that the KPMG report said the district couldn’t find invoices for $1.5M in textbooks?
Turk – Yes. That surprised me.
Bradbury – Did it surprise you that some of the invoices were dated before 2008?
Turk – No. That does not surprise me.
Bradbury – So, it doesn’t surprise you that the invoices were for books that had already been purchased.
Turk – That’s how it works. We had to purchase the books in order to get the reimbursement.
Bradbury – So, you had already purchased the books and you’re going to the Bank of America to get reimbursed.
Turk – They were textbooks qualified under the lease.
Bradbury – You testified the district ran a surplus every year you were CFO.
Turk – Yes. The surplus increased year over year.
Bradbury – Are you familiar with the SACS report in October of 2012?
Turk – I’m familiar with it.
Bradbury – Are you aware that auditors looking at the DeKalb Schools found that in July 2012 there was a $25M budget deficit?
Turk – No
Bradbury – Are you aware with the SACS findings that the board chair, Dr. Walker, didn’t differentiate between having a balanced budget and operating the system in a manner that adheres to that budget.
Turk – No
Bradbury – Would you agree that to have a balanced budget you have to abide by the budget you set for yourself?
Turk – Yes
Bradbury – Are you familiar with the SACS finding that the school district doesn’t keep the monetary deficit at the forefront of it’s spending, the school board in particular.
Turk – I was not aware because I was not a part of the deficit.
Bradbury – No more questions
Obiorah – In your dealings with Dr Walker, did he have an understanding of the budget process and issues facing the district?
Turk – Yes
Obiorah – Prior to FY ’12, did the district operate within its budget?
Turk – Yes. So much to say the fund balance increased over the years.