Good audit for the RSD; Potential Legislative changes in the future

The Cowen Institute would like to applaud the Recovery School District (RSD) for its recent financial audit. RSD officials have worked hard to get overpayments to employees under control and have done so. The report also cites late vendor payments as a problem. The RSD is unlike any other school district in that it has no mechanism to borrow and cannot have cash reserves because it is a state agency. As a result, it has difficulty funding federal or capital reimbursement programs. This is a real hindrance for the RSD. In the Management Letter dated December 29, 2010, the legislative auditors state that:

“The Louisiana Legislature should consider providing advance funding to RSD to allow RSD to make vendor payments timely, as required by R.S. 39:1695. Alternatively, the legislature should consider providing RSD with an exemption to the requirements of R.S. 39:1695 under the statute’s reasonable cause provision.”

The Cowen Institute agrees with the auditors and would like to support the RSD in passing legislation this legislative session, if they so choose, that would provide the advance funding recommended by the auditors. The RSD is simply different than most state agencies and should be able to pay for services rendered immediately. It provides trust among vendors who will be more willing to work with the RSD and ensures that work can get done in a timely manner, which ultimately provides better learning environments for our children. And, it’s simply good business to ensure that the manager of the majority of our public schools is able to pay vendors on time.