Flagler Schools to audit Flagler Youth Orchestra account after 18-year 'oversight'

During a school board meeting Tuesday, board member Will Furry and others questioned why a non-school employee and her husband had direct access to a district bank account.

Additionally, they questioned why the Flagler School account has never been audited.

Since the Flagler Youth Orchestra's inception 18 years ago, its director, Cheryl Tristam, and her husband, Pierre, have been signers on the account.

After what some board members and district staff recognized as an “oversight,” a four-year transactional audit of the account is already underway and is expected to be finished between the end of June and the beginning of July, officials said.

Furry, who gave way to the discussion after he questioned the organization's structure in the previous school board meeting, said he was "not happy" to hear the account had never been audited after being told otherwise.

He also expressed frustration over the fact that the orchestra’s director is not a district employee, but rather a contractor who oversees the program.

The Flagler Youth Orchestra was initially created in 2005 as an after-school strings program. Today, it provides instruction on “violin, viola, cello and bass, orchestral performance opportunities at all skill levels” to more than 350 area students.

According to Flagler Schools Chief Financial Officer Patty Wormeck, Tristam was tasked with “growing” the program by the school board at the time, with the help of former Superintendent Bill Delbrugge.

“When we found this out, we contacted Ms. Tristam, because we needed to get oversight of this account,” Wormeck said. “We needed to take ownership.”

Board member Colleen Conklin (who also served on the board in 2005) said she knew “this was an internal account,” and that it was the finance staff’s understanding at the time of the account’s creation that it was audited annually.

“Those are things we need to discover and find out,” Conklin said, adding that it is the district’s fault for not ensuring the account was audited every year. “What happened? Was it a change in superintendent? A change in staff? How did it fall through the cracks?”

Furry said it was a "problem" that the FYO account has the district's EIN number and yet has as its signer a district contractor instead of a district employee.

"We have a memorandum of understanding with Cheryl Tristam, signed several years in a row, and she is signing as the person of the (FYO,)" Furry said. "They should be using their own account or have their own entity − whether it's a 501(c)(3) or a corporation."

He also saw as problematic the fact that banking statements from the account were sent to Tristam's home address, which Wormeck confirmed to be the case.

Transactions between the program and FlaglerLive

In an interview with The News-Journal, Tristam said she was not told at the time that an audit was required.

“I wasn’t really given a whole lot of instruction when this account was set up,” Tristam said.

She added that she started as a volunteer and was put on the account as a signer, “so if we accepted donations, if we needed to purchase violin bows, things like that, we had a means to do it.”

“I had no frame of reference of what an audit would look like or that that was a requirement of this type of an account,” Tristam said.

She said she always knew that the district’s EIN number was on the account, but that she thought "this was more like a booster account." She was not aware that there were differences in oversight treatment given between different types of accounts.

Tristam and her husband, Pierre, who runs FlaglerLive, were working with the Flagler Symphonic Society during that time and wanted to start a strings program. That is when Delbrugge told Tristam, “We will fund the teachers if you run the program.”

The first year, they executed the program as volunteers, which is why, she said, the three names were on the account.

One year later, after the program was more successful than she had anticipated, Tristam asked that she be compensated for her work, and requested that her husband’s name be taken off the account.

“But apparently that did not happen,” she said. “I didn’t have the authority to take Pierre’s name off.”

After Furry asked why Pierre Tristam’s and Delbrugge’s names were still on the account after all this time, Wormeck said she did not know.

Board member Christy Chong then raised a question about the fact that Tristam is listed as the treasurer of her husband’s online publication, FlaglerLive.

Initially, Wormeck said that there had been transactions from the school district's account to FlaglerLive for “advertising” purposes.

Possible conflict of interest

Furry asked School Board Attorney Kristy Gavin whether the situation could characterize a "conflict of interest."

"It is not the best practice," Gavin answered. "This is an internal account, and it has to comply with our internal account rules. Our internal account rules are 'whoever is the bookkeeper does not sign checks.'"

However, Wormeck corrected herself after she received a text message from Tristam, in which the orchestra director claimed that the transactions were in fact made by FlaglerLive to the program’s account.

“In all the years we have been doing this, (Pierre Tristam) has never written a check, he has never gone out and purchased anything. And the audit will show that," Cheryl Tristam said.

Wormeck said she, along with the district’s finance director, Keri Whitmore, and Tristam herself, went to the bank where the account was registered, closed it, and opened a separate account (still dedicated to the Flagler Youth Orchestra), but with only the two district employees as signers.

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‘We are not a nonprofit’

Tristam said that much of the confusion around this situation was due to the fact that members of the community and the school district “thought that we were a nonprofit.”

“So a conspiracy theory has been in play based on this incorrect information that we were a different type of account than what we actually are,” Tristam said.

“(The Flagler Youth Orchestra) is a district program – it’s their program,” Tristam said. “And we were asked to run in on their behalf back in 2005.”

She said that while the confusion is “understandable,” she said some of it has to do with a “faction of people that despise my husband.”

“They are looking for any way that they can show that he has somehow benefited financially off of this arrangement with the school district,” Tristam said.

In a statement to The News-Journal, Furry called Tristam's reaction "a bit melodramatic."

"No one is after her or her husband. What we are seeking is the truth and transparency," Furry wrote. "In the May 16 school board workshop, I asked her some very direct questions regarding the FYO finances and Mrs. Tristam responded with misleading answers. She brought this scrutiny onto herself."

Furry raised concern over the fact that every year, the school district has a memorandum of understating (MOU) with the Flagler Youth Orchestra, which is essentially an MOU “with ourselves,” he said.

MOUs would usually mean “that there is an entity or a person on the other side of that.”

He said that the fact that so many were under the impression that Flagler Youth Orchestra was a nonprofit is “concerning.”

“We are going to have to really look at this structure,” Furry said. “I would suggest that we have an outside counsel to review the structure of this, and to be certain that we are in compliance with both corporate structure and tax law.

“If we can get assurance that we are doing the right thing here, then we can move forward and continue in this manner. But this is really messy,” he added.

Tristam said the program raises funds through concert tickets, donations and maintenance fees for the instruments charged to those using the program’s instruments.

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The program is tasked “each year with offsetting the cost of the (five) teachers.”

“The school district pays the teachers directly. The school district does not put money in this account,” Tristam said. “We write checks to the school district to offset the cost of the teachers.”

She also mentioned that when she gets paid, she is paid “directly” as a 1099 contractor.

This article originally appeared on The Daytona Beach News-Journal: Flagler Youth Orchestra undergoing audit after 18-year 'oversight'