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July 18, 2018

County Letter Acknowledges School District Correct in Refuting Alleged Clerical Error


In a special April 10 meeting, Hinsdale Commissioners Cindy Dozier and Stan Whinnery voted to approve a response letter directed to the Hinsdale County School District.
Commissioner Susan Thompson, also a school employee, was not in attendance, having recused herself from the matter citing conflict of interest.
The long awaited response, penned by County Attorney Michael O’Loughlin to school board President Phil Virden and Superintendent Dr. Leslie Nichols, answers the school’s denial of culpability in the matter of repaying nearly $375,000. Hinsdale County’s response agreed with the school district’s assessment that there was no debt and the demand was, in fact, “a matter of improper arithmetic.”
The county letter, sent via certified mail, answered each point made by Superintendent Leslie Nichols in her January 26, 2018, rebuttal to the alleged debt repayment. At that time, the school board backed their claims with a packet of forensic accounting, photo copies of actual checks received and subsequent disbursement backtracking seven years of convoluted Forest Service (SRS) and Bureau of Land Management (PILT) money. Nichols also asked for reimbursement of shortages made to Hinsdale School District of $1,781.15 revealed by the audit which was made in error to the Archuleta School District.
A repayment request was also made for $6,556 in legal fees incurred to defend the school district from the county’s allegations, in addition to the $62,858.66 which Hinsdale County withheld in 2017 amidst the controversy. Finally, school officials asked that a public apology be made in SILVER WORLD. The request for retraction citing damage to the school’s reputation occurred with the demand for repayment of the alleged but now, non-existent debt.
Hinsdale County’s two page letter did not contain an apology nor actually state that any county errors had been made. Last fall, commissioners definitively informed the school superintendent and the school board directors that since 2008 nearly $375,000 of federal BLM funds had erroneously been paid out to the district. In lieu of an apology for challenge over previous years of PILT and SRS money, the letter stated that Commissioners Dozier and Whinnery, together with legal counsel O’Loughlin, want to enter into negotiations to determine both 2017 and 2018 SRS funds pursuant to CRS 30-29-101(3), suggesting May 9 as a possible date for the discussion.
In the carefully worded missive, O’Loughlin refused payment of any legal fees incurred by the school, calling legal fees a “product of doing business.” Commenting on the school district’s demand for county repayment, O’Laughlin states, “…the School District could have waited to hire attorneys until it had some certainty as to whether the amounts allegedly owed to the county were accurate. As the District found out shortly after the controversy arose, this was not a legal issue, but rather a matter of improper arithmetic.”
A check for the requested $1,781.15 was included with the county letter repaying funds misallocated to Archuleta School District from the SRS pool of funds over the years.
The response noted the offer publically made by Hinsdale Commissioner Stan Whinnery to give all 2017 SRS funds to the district contingent on an agreement to repay the debt, was no longer on the table because there was, in fact, no overpayment to be repaid.
While thanking the school district for its patience, the official county letter takes no responsibility for the error. The letter states only that “Hinsdale County believes it has instituted checks and balances that are necessary so that any confusion between SRS and PILT payments and proper distribution thereof does not arise again.”
The school district has been clear regarding the legal/accounting tab to prove their case. Hinsdale County has at this date not released any numbers on the investigative accounting required last fall and in response to school district claims.
A regenerated, joint panel committee has been put in place to deal with the legally dictated SRS fund sharing between Hinsdale County Road and Bridge and Hinsdale County School District. Attorney Michael O’Loughlin was nominated and approved to join the Secure Rural Schools Panel at the April 4 county commissioners’ special meeting. Also seated on the SRS Panel is Dr. Leslie Nichols, Rob Hudgeons, Phillip Virden, Cindy Dozier and Stan Whinnery.
School Board Chairman Virden tells SILVER WORLD, “Hinsdale County School District RE-1 is in receipt of an April 12 letter from Michael O’Loughlin, attorney for the Hinsdale County Commissioners, regarding the matter concerning SRS/PILT payments.”
“In the letter,” Virden states, “the County Commissioners replied to the School District’s January 26 and March 30 letters to Hinsdale County.  In O’Loughlin’s letter, Hinsdale County issued no apology to the school district nor did it offer to pay the school district legal fees incurred by the school district for its having to research the matter of the SRS/PILT payments.”
“ In the letter, O’Loughlin, along with Commissioners Cindy Dozier and Stan Whinnery, did request a meeting with the School District to restart negotiations for the 2017 and 2018 SRS/PILT distributions to the School District.   The School District accepted this offer to meet on May 9 at 3 p.m. at the Coursey Annex.  Representing the School District at this meeting will be Superintendent Leslie Nichols, School Board Chairman Phillip Virden, and School Board Vice Chairman Rob Hudgeons.”
At this writing there has been no response from Hinsdale County Commissioners or administrator to inquiries addressing exactly why the accounting error was believed to have occurred, how the $375,000 figure was derived, or if Commissioners are now satisfied that there are not thousands of dollars at large.
Hinsdale School Board rebuttal accounting is available on their website, no Hinsdale County substantiating paperwork of the alleged SRS funding error was made publically available.
The county letter states, “Hinsdale County will soon place a press release in SILVER WORLD explaining its position on this matter.”
During the special meeting on April 10, Dozier addressed the issue. While not specifically referring to an apology, she noted that either an upcoming press release on the matter would be made, or a public statement would be issued at a county board meeting where press coverage would be assured.

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