September 22, 2016
U. S. District Court sentencing opinion/order
Exclusive series, beginning today.
Highlights include:
-Steven Ingersoll explains the apparent financial statement fraud device he used on behalf of the Grand Traverse Academy to avoid triggering a bond fund balance covenant:
“[W]e used [the end of the fiscal year] to adjust to keep the school from experiencing deficit, and the mechanism by which we did that, initially, was a reduction of management fee creating an accounts receivable at the end of the year then if the – well typically we – we budgeted 12 percent at the beginning of the year, and if it got reduced to 6 percent, then that 6 percent became a receivable at the year-end.
And the auditor came in, looked at that, and said okay and then that’s – that was the method.
So later we added to that – we were searching, especially in 2008 – seven, eight, and nine were disastrous years for the academy because of first the fund covenant – the fund balance covenant, followed by the financial collapse in 2008 and the reduction in per pupil funding and its hangover in 2009. Those were three really tough years that – and the [GTA] needed a great deal of support, and we came up with the idea at some point, I think we had actually done that earlier, set up the lease arrangement.”
-Money for nothing:
“Ingersoll explained, at one point, that he understood the agreement to provide that the receivable owed by SSM to GTA would eventually be excused when GTA became profitable.”
-Ingersoll's payments to Mark Noss and his Grayling-based Great Lakes Vision while Noss was a Grand Traverse Academy board member.
Coming later today, only from Miss Fortune.