KIPP DC Audit Adds to Disturbing Picture of Financial Mismanagement

In light of remaining unanswered questions related to the embezzlement at KIPP DC of over $2.2 million over an 18 month period (see here and here), the latest available audit raises additional concerns about KIPP DC's ability and commitment to financial transparency and competence.

KIPP DC was flagged in December 2021 for what independent auditors referred to as a "significant deficiency."

KIPP DC Public Charter Schools and Affiliate
Schedule of Findings and Questioned Costs (Continued) Year Ended June 30, 2021

Section II. Financial Statement Findings

 
Significant Deficiency
Finding 2021-01—Search for Unrecorded Liabilities

 
Criteria: Based on the principles contained within auditing standards generally accepted in the United States and Government Auditing Standards, management is responsible for the maintenance of internal control over financial reporting with the objective that financial statements are accurate under generally accepted accounting principles.

 
Condition: During our search for unrecorded liabilities, we noted construction in progress activity incurred through June 30, 2021, that was not recorded or properly accrued for at June 30, 2021.
 

Cause: Management did not have adequate controls implemented around the review of construction contracts and commitments to ensure costs incurred, but not yet invoiced were properly accrued for.
 

Effect: The error unreported assets, specifically property and equipment, and liabilities by approximately $5,209,000.
 

Recommendation: We recommend management develop additional controls over the review of construction contracts and commitments to ensure all costs incurred are properly recorded in the correct period.

 
Views of responsible individuals: Management agrees with the finding and recommendation. See corrective action plan for further information (p.8).

Given the fact that KIPP DC's net assets in 2019 were over $144,000,000, with over half of that in cash or assets that could be readily turned into cash, it would seem that some oversight would be forthcoming.  

Except, of course, that KIPP DC's corporate board is in place as a protection racket rather than public accountability for the billions of public dollars that KIPP DC, Inc. has garnered.