Patience Is Wearing Thin

MERCER APPEARS RIPE FOR A MAJOR SCHOOL BOARD UPHEAVAL

A “revolution”, of sorts, seems to be in the making in Mercer.  This one, without firearms, is for the removal of one or all three of the Mercer school board members and the firing of the district administrator.  The three board members continue to blindly follow the commands of Administrator Erik Torkelson whose mismanagement has deprived Mercer’s school children of the education they deserve and who misspends taxpayer dollars.

Mercer School Facts has received a multitude of blog comments calling for a recall election.  Most are not published because of repetitiveness.  Even a new Facebook blogsite is overwhelmed with similar pleas.

The composition of the school board presently consists of three members – Noel Brandt, Deanna Pierpont and Micki Pierce-Holstrom – who follow Torkelson’s every misguided command.  The other two members of the board – Christa Reinert and Karl Anderson – were overwhelmingly elected to the board on promises that they would work to restore honesty and transparency and to stop the mismanagement and misspending.  Their attempts have been rebuffed  with harassment and intimidation and even threats.

Based upon comments to this blogsite and in the community, Mercer residents are calling for a recall election and seem impatient about waiting until next spring’s election.  Dennna Pierpont is up for reelection in the spring election and is certain to go down as Torkelson lackeys Kelly Kohegyi and Denise Thompson did in earlier elections.

Nevertheless, there seems to be a ground swell movement for the recall of Micki Pierce-Holstrom.  Many are finding it difficult to accept that Pierce, who as a realtor handles property transactions involving thousands of clients’ dollars, could so miserably and irresponsibly manage the school’s finances.  She was school board treasurer when most of the $200,000 a year of Fund 80 money was mysterious misspent. 

A Wisconsin Department of Public Instruction investigation found that $175,248 of taxpayer Fund 80 money had been misused in the school years 2015-16 and 2016-17, and it continues to investigate other years.  The DPI determined that $145,916 of that amount wrongly went into the pockets of Torkelson and select staff members for duties Torkelson falsely claimed were needed to operate the community services programs.

Now, as school board clerk, Pierce-Holstrom refused to call a special board meeting to discuss the DPI findings, an action required by law when requested by another board member.  Then too, many feel that Pierce-Holstrom’s outburst at the board meeting where she shouted out obscenities, does not set a good example for Mercer’s children and is not befitting conduct for a school board member.

Crandon, Wisconsin, has had outstanding successes with recalling errant school board members.  Until recently it had a situation like Mercer: an administrator who controlled the school board and a dismal management and educational record.  A group of concerned citizens successfully led the recall of one school board member, another resigned under fire and there are now enough signatures for the recall of a third school board member.  The administrator is on administrative leave while the sheriff and district attorney investigate unspecified charges.

Whether Mercer has a recall election or waits until the spring election, there is the critical need for a group of Mercer citizens to step up and lead the reformation, as was done in Crandon.   Some Mercer School Facts blog commenters have suggested that MSF lead the campaign to remove the school board members and Torkelson.  MSF is intended only as an informational and   communication tool.  Although contributors to MSF would most likely be eager to work on a recall, it is not staffed or organized for that purpose.  

So those clamoring for a change in the board and the firing of Torkelson need to get their act together and take action.  It’s not enough simply to talk about change – YOU have to be willing to do something to create change.   

Another Black Eye

MERCER SCHOOL ADMINISTRATOR/SCHOOL BOARD SCANDAL DRAWS NATIONAL ATTENTION

Print and broadcast news media across the nation have focused on Mercer as a  “tiny northwoods school district” with a major “mismanagement and misspending problem”.

The unfavorable but fully justified attention began with a page one exposé in the Milwaukee Journal Sentinel which documented Wisconsin Department of Public Instruction charges that Mercer school district administrator Erik Torkelson misspent taxpayer-funded Community Services Fund 80 money.   (See MSF 7/11/18 Milwaukee Journal Sentinel Slams Torkelson) The state’s largest newspaper is  part of the USA Network, which resulted in the news article being passed on to 500 other television, radio and newspaper outlets, many of which used the story.

Regional news media then did their own research of the charges and published and broadcasted major news stories.

Many Mercer residents have commented that they didn’t see some of the regional news coverage.  Therefore, following is the coverage given by regional media outlets which did excellent jobs in reporting the DPI findings and subsequent related actions.

                                                          *     *     *

WJFW -- Rhinelander
Rose McBride
Reporter/Anchor
DPI finds Mercer School District misused $175,000

MERCER - Two Mercer School Board members, Karl Anderson and Christa Reinert, are facing backlash for questioning finances of the district and the behavior of some of its leaders.

"I get [an] upset stomach thinking about the things that are going on," said Anderson.

Anderson was elected to the five-person board this spring. He ran to support fellow school board member Christa Reinert and to try to correct some of the wrongs he saw happening in the district.

"Some of the facts that have been coming out seem to be waking people up," said Anderson.

Those facts are misuse of taxpayer money, improper raises, and intimidation techniques, which were observed during this interview when a man in a car drove by yelling profanities.

Recent findings by the Wisconsin Department of Public Instruction show that over the course of the last two years, about $175,000 out of Fund 80 were misused.

Fund 80 is a fund of taxpayer dollars used for community programs at the school.

Instead, the money was used for unapproved payroll increases, and upgrades to the school that didn't benefit the community.

"[It's] very manipulative in a lot of ways, which is very disturbing," said Reinert.

The District Administrator, Erik Torkelson, and Board President, Noel Brandt, issued a statement on the findings saying there were no inappropriate expenditures, which they plan to appeal. The full statement can be found at the bottom of this story.

This isn't the first problem Reinert has seen during her two years on the school board. She said she has been left out of email chains and bullied during school board meetings - all for asking questions on behalf of the students and taxpayers.

"[They say] if you question anything that's going on you're not 'in' with the school, and that's not true," said Reinert.

Reinert says the other three members of the schoolboard support Torkleson, one of the people who benefitted from the unapproved pay raises.

"They're elected officials and I feel like they need to step back from the personal part of all this and do what they're asked to do," said Reinert.

Despite backlash, both Reinert and Anderson were both overwhelming voted into their positions. They have recently seen some support for their efforts.

But many of those people are too afraid to show that support publicly, which is why Reinert and Anderson keep on fighting.

Contact information for the three other board members is not listed publically, and calls to the district seeking that information went unreturned this week.

Anderson called a special school board meeting to discuss the DPI findings, but that meeting has not happened and shows no signs of happening soon. There is a monthly school board meeting on Monday,July 23, but any mention of the findings is left off the agenda.

The full statement from Torkelson and Brandt reads:

We are in the process of discussing the disagreement between the DPI's review and our auditing firm, Eagle Auditing of Park Falls, WI. We have made progress and are confident in a resolution. The DPI's letter clearly states that this is an accounting issue. There were no inappropriate expenditures. It is a simple matter of which fund, 80 or 10, should they have been levied to. There are many lies and conspiracy theories being circulated that are part of the agenda of a small group who have openly campaigned to close our great school. Mercer is a great town filled with many great community members, families and children. Mercer School is filled with talented staff as well as dedicated and respectful students. It is my sincere hope that the Mercer community, as they have done so many times, rallies around their great town and school and silences those who do not believe in the School and town of Mercer.

*    *     *

KBJR6 -- DULUTH

State agency: Mercer school district misappropriated $175,000 dollars

By Anthony Matt, Reporter

MERCER, WI - A big problem has come to light for the City of Mercer and their school district. 

"There was just a question of who was getting extra money, and how it was being done without board approval," said school board member Christa Reinert. 

Reinert is a two-year member of the Mercer School board. She says the school has something called "Fund 80" - a designated fund, of taxpayer dollars, used to implement community programs at the school. 

Reinert says after noticing a few things were awry with the school's finances, she claimed money from Fund 80 was being misappropriated over the course of the 2015-16 and 2016-17 years. 

"There were inflated numbers based on just doing simple math on the percentages," she said. 

Reinert claims she brought the matter to the attention of other board members, and the district administrator, Erik Torkelson, but they, according to Reinert, did not adequately address it. 

An audit report from the Wisconsin Department of Public Instruction shows misappropriation of $175,000. Those misappropriated funds were used for unapproved payroll increases, and upgrades to the school that was outside of the Fund 80 guidelines, according to the report. 

"There were things in the District's paperwork that were not complete in terms of information needed to prove that they were using the fund source appropriately," said DPI spokesperson Tom McCarthy. 

Reinert says the Fund 80 dollars swelled over the years, growing from about $3,000 a year to roughly $200,000 on average over the last seven years.

Portions of the fund were used for raises and bonuses for Torkelson, and others, according to the DPI Report. 

Reinert said the school board never approved the increases, something that is required. 

"At the time, the school itself was recording [meetings] on video and providing it on our website for everyone to see. So, it was verified that there was not an open session vote at all on several of the administrative bonuses if you will," said Reinert. 

Reinert's counterpart on the board, Karl Anderson, says he tried to meet with Torkleson to address the discrepancies but claims that meeting never happened, despite a state statute that says his request should have been granted.

"It seems to me the administrator is the one who led us to the point that we're at, and we need to understand as a board and take control of this," said Anderson. 

In all, the DPI audit showed 12 instances of misappropriation, findings the district plans to appeal. 

The DPI has issued a "revenue limit adjustment", meaning the Mercer board will have to cut spending or dip into their reserves to balance the 2018-'19 budget to make up for the misappropriation

The state says a second blow could follow if the district doesn't change their practices for the upcoming year.

Meanwhile, Mercer School District leaders are responding to the report. Here is the formal statement. 

"We are in the process of discussing the disagreement between the DPI's review and our auditing firm, Eagle Auditing of Park Falls, WI. We have made progress and are confident in a resolution. The DPI's letter clearly states that this is an accounting issue. There were no inappropriate expenditures. It is a simple matter of which fund, 80 or 10, should they have been levied to. There are many lies and conspiracy theories being circulated that are part of the agenda of a small group who have openly campaigned to close our great school. Mercer is a great town filled with many great community members, families and children. Mercer School is filled with talented staff as well as dedicated and respectful students. It is my sincere hope that the Mercer community, as they have done so many times, rallies around their great town and school and silences those who do not believe in the School and town of Mercer."-E. Torkelson

*      *        *

KBJR6 News  –  DULUTH  

Mercer school district being investigated for test administration and scoring issues

An update to a story we brought you earlier this week regarding the Mercer School District.

KBJR6 has learned there could be an issue with test scores.

A Wisconsin Department of Public Instruction spokesperson said they are looking into allegations of test administration and scoring issues.

This comes after the Wisconsin DPI found 12 instances of misappropriation of funds within the district, totaling $175,000.

District officials have refuted the misappropriation findings, calling it an accounting error, and plan to appeal the findings.

DPI Spokespeople say the investigation into test scores is ongoing, and they won't be releasing any further information until the investigation is complete. 

Torkelson’s Attempt to Survive

MERCER SCHOOL BOARD’S DISGUSTING DEBACLE

Disgusting, un-American, bizarre, alarming, depressing, beyond belief.  These were just some of the terms used to describe Monday night’s Mercer School Board meeting by many of the more than 100 citizens who jammed the school’s library/meeting room expecting to hear how Administrator Erik Torkelson managed to misuse thousands of their school tax dollars.

Instead, they were dumb-founded by a well-rehearsed spectacle staged by Torkelson and his three stooge school board members -- Noel Brandt, Deanna Pierpont and Micki Pierce Holstrom.  Like well-trained puppies, the three followed every one of Torkelson’s pre-scripted commands.  It was obvious that that they had held one of their infamous, illegal closed-door sessions to receive Torkelson’s orders and rehearse their roles.

School board members Christa Reinert and Karl Anderson, who were  overwhelmingly elected to the school board by Mercer voters to clean up the school’s administrative mess, tried valiantly and in vain to open a dialogue and get the answers the Mercer citizens had come to hear.  They were shut down by Brandt in every attempt, with Brandt ignoring or talking over them.  Brandt purposely mumbled into his microphone so that the crowd would be unable to hear his feeble attempts to deny them the information they sought.

Everyone should have expected that Torkelson would stymie any possible discussion of the misappropriation of funds charged by the Wisconsin Department of Education.  He stripped down the meeting’s agenda, eliminating the ever- present “public comment, report/information items (which would include correspondence like the DPI charges) and discussion items”.

The public meeting itself lasted only 15 minutes.  The board then went into closed session to “confer with legal counsel regarding a matter which may result  in litigation involving the District (Fund 80 Issues)”.

The more than 100 citizens had to leave for the closed session and wait in the adjoining lunchroom.  All chairs and other seating ln the lunchroom had been deliberately removed so that the people, including many senior citizens, would have to stand or be encouraged to leave.

Many waited out the two-hour-long closed session only to hear that no action was taken.

Many attendees privately questioned how Brandt, Pierpont and Pierce had been compromised to the point that they would completely ignore the misspending of tax dollars and the poor education the students are receiving under Torkelson.  The Mercer school ranks at the very bottom of the list of all 21 northern Wisconsin schools with its ACT and DPI School Report Card scores.

Even the school’s attorney seemed to behave like one of Torkelson’s well-trained puppies.  When someone asked the attorney for her name she replied “Mary.” The conversation then went like this:

“And your last name?”

“I’m not authorized to give you that,” said Mary.

“Well, what’s the name of your law firm?”

“I’m not authorized to give you that,” Mary replied.

For the record, her name is Mary Gerbig and she is with the law firm of Davis and Kuelthau in Green Bay.  Torkelson fired the last school attorney because the firm would not give him the advice he wanted to hear, and he hired the new one.  Although the school board is the client, Torkelson is using the Davis and Kuelthau law firm as his own private counsel, without board approval.

And who is paying the bill?  You are, Mr. and Mrs. Mercer Taxpayer.

Acts of Desperation

THE TORKELSON/SCHOOL BOARD CRISIS GROWS

The misuse of school tax dollars, another open meeting violation and an investigation into test administration and scoring, have been added to the woes of Mercer School District Administrator Erik Torkelson and the school board.  State and regional news media – print and broadcast -- are having a heyday with the scandal.

The wrongdoings are expected to draw a crowd to this coming Monday night’s school board meeting.  (The meeting will begin at 5 p.m. at the Mercer school.)  Many Mercer residents are demanding that Torkelson be fired and that his three misguided school board supporters-- Noel Brandt, Deanna Pierpont and Micki Pierce-Holstrom -- either resign or face recall elections.

The suspected misuse of Community Services Fund 80 monies has been going on for several years, with thousands of taxpayer dollars wrongly channeled into the pockets of Torkelson and several of his chosen staff members.  The abuses gained widespread attention when on June 26 the Wisconsin Department of Public Instruction issued a blistering six-page report of misuse of $175,248 of taxpayer-funded Fund 80 money.  That may just be the tip of the iceberg because the misuse of Fund 80 is being further investigated by the DPI, along with the school’s test administration and scoring. 

Torkelson tried to downplay the magnitude of the DPI findings by issuing a statement to the news media which falsely claimed that “the DPI letter clearly states that this is an accounting issue.”  However, nowhere in the DPI’s document does it ever mention the misappropriation of the funds as “an accounting issue.”

In fact, the DPI charges say exactly the opposite.    The DPI ruled that $145,916 which Torkelson doled out from Fund 80 to himself and his selected staff members in the form of bonuses, salaries and benefits were not “actual, additional costs to operate community programs and services”.  Another $29,532, which Torkelson used to pay for new school flooring, fitness equipment and a tractor, were “not actual, additional costs to operate the community programs and services”.

In an act of desperation, Torkelson went a step further with a baffling statement to the news media.  He lashed out at what he said were “many lies and conspiracy theories being circulated… by a small group who have openly campaigned to close the Mercer school.” 

Here, again, Torkelson strayed far from the truth.  He, Torkelson, is the only person to say anything about closing the school, and he says it to panic Mercer residents.  The “small group” actually consists of hundreds of Mercer voters who kicked his mother-in-law and another stalwart supporter off the school board, and that group has “openly campaigned” to “save our school”.

The only way Mercer taxpayers will get this done is by getting rid of Torkelson and his three remaining lackey school board members.

In his news statement, Torkelson also called on the Mercer community to silence his critics. That’s scary.

MILWAUKEE JOURNAL SENTINEL SLAMS TORKELSON

Reports on Years of Mismanagement, Misspending

The Pulitzer Prize-winning Milwaukee Journal Sentinel has done it again – this time reporting on Mercer School District Administrator Erik Torkelson’s “inappropriate” spending of taxpayer dollars and the history of other questionable management practices.  Widely acclaimed Journal Sentinel educational writer Annysa Johnson did another masterful job in researching and writing the expose.

 In this recent article she referenced an earlier page-one story she authored when Kelly Kohegyi showed the sexually explicit movie “Fifty Shades of Grey” to a group of young Mercer school girls.  That incident gave Mercer a big black eye when the story went viral and was used by broadcast and print media around the world.   

This latest article will most likely receive similar widespread notoriety because the Journal Sentinel is a member of the Gannett Co. family of hundreds of broadcast and print media outlets, including USA Today.  As a Pulitzer Prize- winning newspaper, the Journal Sentinel does not print articles without thorough researching, fact checking and top professional writing.  So, we can rest assured that Annysa’s article is 100% correct.

Read the following text of the page one Wednesday, July 11, Journal Sentinel article.

Tensions boil in tiny Northwoods district

New board member digs up spending discrepancy 

Annysa Johnson

Milwaukee Journal Sentinel USA TODAY NETWORK – WISCONSIN 

One way to make enemies in a smalltown school district, it turns out, is to start sniffing around its finances. 

Christa Reinert was hardly welcomed when she joined the Mercer School Board in 2016. She’d run, at least partly, in protest after two girls basketball coaches — one a sitting School Board member at the time — allowed players to watch the sexploitation flick “Fifty Shades of Grey” on a road trip. 

But things got worse, she says, when she started asking questions: Why, for example, were board members approving staff contracts they’d never seen? 

Why was the district administrator’s salary higher than his contract stipulated? 

And why had the community recreation fund in this tiny Northwoods district — with 151 students in a single K-12 school — ballooned in the years after the administrator’s arrival from about $3,000 a year to more than $200,000 on average over the last seven years. 

District Administrator Erik Torkelson and School Board members — one of them his mother-in-law — were openly hostile, she said. Torkelson directed his staff to stop providing her documents without an open records request and payment upfront.

So Reinert took her concerns to the state Department of Public Instruction. 

DPI issued a finding late last month that the Mercer School District

inappropriately spent about $175,000 from its community programs and services account — otherwise known as “Fund 80” — over the 2015-’16 and 2016’17 school years. Most of that was used to boost wages and benefits for a small group of employees, including Torkelson, without adequate documentation, according to the letter. 

DPI also admonished board members for voting on bonuses for administrators, including $11,000 for Torkelson, in closed session. 

As a result, the department has issued a “revenue limit adjustment” for an equal amount, meaning the Mercer board will have to slash spending or tap its reserves to balance its 2018-’19 budget. And a second hit could follow if it doesn’t change its practices for the coming school year, according to the state. 

“They still have time to demonstrate ... that their funds were spent properly. But they did not provide that (documentation) to us,” DPI spokesman Thomas McCarthy said.

Torkelson and board President Noel Brandt have declined repeated requests for interviews over the last week. But Torkelson said in an email to the Journal Sentinel that he and the district’s attorneys “vehemently disagree” with the agency’s findings and will be filing an appeal.

Reinert said she takes no satisfaction in the ruling.

“At this point, it’s going to hurt the kids in the school,” said Reinert, who owns Flambeau Flowage Sports and the adjacent Looney Beans Coffee shops on Highway 51, the main drag through this Iron County town of about 1,400.

“They’re blaming this on me,” she said of Torkelson and his supporters on the board. “But I didn’t take the money. I didn’t pay people over contract. I didn’t approve any of that,” she said. “I was the one questioning it over the last two years, because it sounded exorbitant to me.”

The DPI probe focused on how the tiny school district spent its Fund 80 dollars for recreation including pickleball and community programming over the two years. Torkelson said in a January interview that the district offers a broad array of programming — child care, senior meals, yoga, art and music classes — that have “transformed the culture of our district.”

Critics dismiss it as a handful of sparsely attended classes and a “walking track” through the halls of the school.

The DPI ruling is the latest turn in an ongoing community squabble that appears to have begun with a controversial school referendum in 2013.

Mercer is considered a property-rich school district, one of a number of districts in resort communities around the state where high-end vacation homes skew the property values, effectively reducing their access to state dollars.

Most of its $3.5 million annual budget comes from local taxpayers, who can be sensitive to spikes in their property tax bills. And many revolted when a 2013 referendum, which was expected to raise taxes by $11 per $100,000 in home value, came in at more than 10 times that amount. Since then, a small group of residents has been raising concerns about the school district at meetings and online.

Complaints have run the gamut, from grade inflation and declining ACT scores to Torkelson’s relationship with the School Board and its financial operations.

Of keen interest has been Torkelson’s compensation. Torkelson was paid about $136,000 last year, though his contract was for about $98,000, according to his critics. He said he effectively buys back some of his benefits, including insurance and unused vacation days, but Reinert and others say that should total no more than $114,000.

And things could get heated. In 2014, a local blogger, Richard Thiede, sued the district for suggesting he was tied to a supposed hacking of the district’s email system. Reinert was slapped with a restraining order over the “Fifty Shades” fracas. Late last year, the board voted to consider legal action against anyone, including Reinert, who forwarded an email letter critical of the district.

“People have been intimidated, and there’s been outright vandalism of people critical of the School Board. Metal shards have been put in tires; I had it happen twice,” said Richard Kemplin, a local activist and Reinert ally who records board meetings.

When board critic Paul Juske ran against Kelly Kohegyi, Torkelson’s mother-in-law, vandals “smashed his mailbox, stole his campaign signs, sent out an illegal flyer,” Kemplin said. “The GAB found it violated election laws, but we couldn’t get the DA to prosecute.”

Tensions boiled over at the October 2017 annual meeting when resident Rick Duley tried to discuss what he called the district’s “pathetic” ACT scores. Shouting ensued. Brandt rose from his seat to confront him, and they were separated by Iron County sheriff’s deputies, who’d been called by Torkelson earlier because another resident was “becoming agitated.”

No charges were filed; Iron County District Attorney Matthew Tingstad said nothing in the deputies’ reports rose to the level of a crime.

Reinert and Duley, as well as one of the deputies, tried to obtain the district’s video of the meeting, but were not successful.

Months later, then-President Deanna Pierpont told the Journal Sentinel that she had erased it, and that Mercer no longer records its meetings.

“I didn’t like what I saw. ... People in the audience were yelling. Students were there. ... I just felt that I didn’t want that out on the website.”

Reinert was stunned when she heard, but not entirely surprised.

“Unbelievable. I was afraid they were going to do that,” Reinert said. “It’s illegal. You can’t just get rid of documentation of a public meeting.”

Reinert won’t say she feels vindicated by the DPI letter. But she does think it explains why she wasn’t welcomed by her colleagues on the board.

“They didn’t just dislike me. I got along with everyone at the school until the ‘Fifty Shades,’ ” she said. “They didn’t want me on the board ... because I wasn’t complacent. I wasn’t going to go along with the status quo.”

More Shenanigans

IT COULD ONLY HAPPEN IN MERCER

A school district administrator who acts without the required school board approval … a board president who ignores the law when asked to call a special meeting … mounting bad publicity about the misuse of school funds.

In any other community these events would have grave consequences.  But in Mercer they are commonplace.

The focus of the latest school board/administrator scandal is a Wisconsin Department of Public Instruction investigation into the misuse of $175,248 of taxpayer Fund 80 money.  The DPI determined that $145,916 of that amount wrongly went into the pockets of administrator Erik Torkelson and select staff members for duties Torkelson falsely claimed were needed to operate the community service programs. (Read the following Iron County Miner report and MSF 6/30/18 Torkelson’s Taxpayer Ripoff)  

When the DPI findings came out,Torkelson quickly contacted the school’s attorneys and, without the required school board approval, directed the firm to file an appeal with the DPI.  Of course, this is nothing new for Torkelson who regularly spends taxpayer money and acts without consulting the school board.  Not that his three board lackeys – Deanna Pierpont, Noel Brandt or Micki Pierce-Holstrom – would dare to challenge him.

But two members of the board – Christa Reinert and Karl Anderson -- who were elected to clean up the school board/administrator mess, asked for a special board meeting to decide what actions to take, if any, regarding the DPI findings.  Of course, Torkelson had already made the decision for them by contacting the attorney, even though the board is the contractual client.

Board president Noel Brandt denied the request for a special meeting.  Wisconsin statute 120.11 requires that “a special school board meeting shall be held upon the written request of any school board member”.

One result of a special meeting would be to remove Torkelson from his position, at least while the DPI continues its investigation into the misuse of funds in other years. Then, too, there is the probability of other legal action.

The board also needs to be concerned about the legitimacy of any information or documents Torkelson might submit if he is allowed to appeal the DPI findings without board involvement.  He has refused to provide the documents earlier demanded by the DPI.

Get ready for some more big bad news about Mercer – bad for Torkelson and his complicit board members, but good for Mercer taxpayers and the students.

The DPI Investigation

TORKELSON’S TAXPAYER RIPOFF DRAWS FIRE

The long-awaited Wisconsin Department of Public Instruction’s investigation of Mercer School Administrator Erik Torkelson’s illegal use of taxpayer Fund 80 money has resulted in damaging “findings” that could cost taxpayers additional money or cause a reduction of funding for the children’s educational programs.

The DPI issued 12 “findings”, 10 of which charged that Torkelson had misused Community Programs and Services Fund 80 to the extent of $175,247.92.   The other 2 “findings”, which the DPI said were eligible Fund 80 expenditures, were based on false information given to the DPI.

Mercer taxpayers and students will pay the price for Torkelson’s illegal use of Fund 80 money as the result of a state law-imposed revenue limit reduction penalty.  Such a reduction means that the district will have $175,247 less to spend in the 2018-19 school year or that Mercer taxpayers will need to approve another tax increase referendum to pay for Torkelson’s blunders. 

The DPI “findings” are for the school years 2015-16 and 2016-17.  The revenue limit reduction, or allowable tax levy, could climb even higher as the DPI investigate Fund 80 misspending for the 2017-18 school year and for earlier years.

A large share of the misused $175,247 - $145,916 – was for salary and benefits which Torkelson illegally paid himself and several select staff member for duties he falsely claimed were needed to operate the community services programs.  The DPI disallowed the phony claims and said that “no documentation was provided indicating the salaries and benefits of the District employees were the actual, additional costs to operate community programs and services”. 

The remainder of misspent money, close to $30,000, was for new flooring and fitness equipment which Torkelson claimed were needed for the community services programs.  But, the DPI said “no’, and declared the phony expenditures ineligible as Fund 80 costs.

The DPI also charged that the Mercer school board reported holding a closed “executive session” on Sept. 28, 2015, to allegedly approve performance bonuses for the administrative staff.  Not only was the closed meeting illegal, but, according to the DPI, the minutes of the meeting did not contain mention of the performance bonuses.   The Mercer school board had previously been put on notice by the Iron County district attorney for holding an earlier illegal closed session.

School board members Christa Reinert and Karl Anderson have demanded a special public meeting of the school board, along with the board’s legal counsel, to discuss the DPI findings.  Board chairman Noel Brandt is required under state statutes to grant their request but, to date, has refused to call a special meeting.

Read the following complete DPI report and learn how Mercer taxpayer money was illegally used and what it means to taxpayers and students. 

WISCONSIN Department of

PUBLIC INSTRUCTION

                                                                                              Tony Evers, PhD, State Superintendent

June 26, 2018 

Erik D. Torkelson

District Administrator

School District of Mercer

2390 W Margaret St.

Mercer, WI 54547 

RE: Department of Public Instruction's Findings Related to the Review of the School District of

Mercer's Fund 80 in 2015-16 and 2016-17

Mr. Torkelson,

The Wisconsin Department of Public Instruction reviewed the documentation related to the

School District of Mercer's Fund 80, Community Programs and Services. The information
submitted by the District included the general ledger expenditure detail for Fund 80, the payroll
check history for selected employees, labor distribution reports for Fund 80, requested
documentation to support certain payments, and descriptions of the Fund 80 activities. Upon the
review and analysis of the District's Fund 80 Community Program and Services, the Wisconsin
Department of Public Instruction (DPI) made the following findings and related financial
impacts.

Finding 1: DPI requested and received the supporting documentation for check # 00055054

totaling $20,758.50 to Action Floor Systems. $10,379.25 of this check was recorded as an
expenditure in Fund 80 in 2015-16. This check was a payment for non-slip flooring. The invoice
provided had a note that the flooring was for the library, entry way, and the hallway.

The response provided by the Mercer School District on June 11, 2018, for Findings 1 and 2,
states, "The purchase of the non-slip flooring is an actual, additional cost to operate community
programs and services." However, the invoice provided had a note that the flooring was for the
library, entry way, and the hallway. Each of those common school building areas are used by
students and staff, as well as visitors to the school, senior citizens and activity participants.
Therefore, the purchase of the non-slip flooring is not ail. actual, additional cost to operate
community programs and services. Wis. Admin. Code § PI 80.02(3). The District would install
the flooring if Fund 80 did not exist. Wis. Admin. Code § PI 80.02(4). State law requires a
revenue limit reduction of $10,379.25. Wis. Stat. § 121.91 (4)(r) and § 121.92(2)

Finding 2: DPI requested and received the supporting documentation for check # 00055497
totaling $5,565.40 to Action Floor Systems. $2,782.70 of this. check was recorded as an
expenditure in Fund 80 in 2015-16. This check was a payment for non-slip flooring in the main
entrance and cafeteria/activity center per the explanation provided by the district.

The response provided by the Mercer School District on June 11, 2018, for Findings 1 and 2,

states, "The purchase of the non-slip flooring is an actual, additional cost to operate community
programs and services," However, the Mercer School District responded to the DPI on May 1,
2018 that the non-slip flooring was for the main entrance 'and cafeteria/activity center. Each of
those common school building areas are used by students and staff, as well as visitors to the
school, senior citizens and activity participants. The purchase of this non-slip flooring is not an
actual, additional cost to operate community programs and services. Wis. Admin. Code § PI
80.02(3), The District would install the flooring if Fund 80 did not exist. Wis. Admin. Code §PI
80.02(4). State law requires a revenue limit reduction of $2,782.70. Wis. Stat. § 121.91(4)(r) and
§ 121.92(2).

Finding 3: DPI requested and received supporting documentation for check # 00055228 totaling

$18,360.00 to Stalker Sports Floors. $6,996.02 of this check was recorded as an expenditure in
Fund 80 in 2015-16. This check was a payment for sanding and sealing a gym wood floor and
adding extra lines to the gym floor. The District's explanation was that the floor was permanently
relined to include the appropriate line and court markings for the Community Pickleball League.

The response provided by the Mercer School District on June 11, 2018, fat Findings 3, states,

'The additional expenditure for the re-lining of the floor is an actual and additional cost due only
to the presence of community programming (pickle ball and the youth basketball league."
Without the presence of these programs we would have simply resurfaced the gym floor (sanded
and sealed) as we do annually." No additional documentation was provided related to the actual
and additional costs to the District to operate the community programs and services. Resurfacing,
sealing and "re-lining" of the gym floor are general building costs and are completed on regular
basis. Therefore, because the sanding and sealing of the gym floor are completed as part of the
District's ongoing maintenance of the facility, those expenses are not an actual additional cost to
operate community programs and services per Wis. Admin. Code § PI 80.02(3). State law
requires a revenue limit reduction of$6.996.02. Wis. Stat. § 121.91 (4)(r) and § 121.92(2).

Finding 4: DPI requested supporting documentation for the $9,373.761'ecorded in account

80E800-551-200000 in 2016~17. The district provided documentation for the original amount
recorded in this account of $58,928.30 which included the purchase of a defibrillator, fitness
equipment, and a tractor with accessories, A journal entry was posted to this account on June 30,
2017, reclassifying $49)554.54 and removing the amount out of account 80E-800-551-200000.
($58,928.30 $49,554.54 = $9,373.76.)

On June 11, 2018, the Mercer School District submitted an "Expenditure Detail Report by

Account" report. This report is similar to an earlier document entitled "Expenditure Detail
Report by Account” which the District submitted to the DPI on May 1, 2018. No new
information was provided in the report submitted on June 11, 2018. Therefore, the DPI is not
able to determine the detail of the expenditures remaining in the Fund 80 account after the
journal entry ($58,928.30 - $49,554.54 =$9,373,76). Therefore, this purchase is not an actual,
additional cost to operate community programs and services per Wis. Admin. Code §PI
80.02(3). State law requires a revenue limit reduction of $9,373.76. Wis. Stat. § 121.91 (4)(r) and
§ 121.92(2).

Finding 5: DPI requested and received supporting documentation for payments to Best Buy

totaling $5,091.19 in 2016-17 coded to account 80E-800-551-222500. This payment was for
computer equipment. The computer equipment is used exclusively in the computer lab used by
the community. Students do not use this lab. -The lab is not used for school curricular or
extracurricular activities. The $5,091.19 is an eligible community service fund expenditure.

Finding 6: DPI requested documentation to support a journal entry posted to account 80E-

800415-257220 totaling $10,217.50 in 2016-17. The District provided supporting documentation
that included a computation of lunches provided to community members which totaled
$10,217.50. Community members were also served breakfasts. DPI did not identify an entry or
an expenditure recorded in Fund 80 for breakfasts served the community.

On June 11, 2018, the Mercer School District submitted additional documentation indicating the

number of lunch and breakfast meals served, by date and month, to community members during
fiscal year 2016w17. The District also provided general information from the DPI's School
Nutrition Programs. The additional information provided to the DPI provides documentation
supporting the handwritten note; which calculated the number of breakfast and lunch meals served,
as well as the pricing documentation, for both community members and students. Therefore,
eligibility of the cost of the aforementioned meals in Fund 80 is acceptable. The $10,217.50 is an
eligible community service fund expenditure.

Finding 7: DPI reviewed the payroll information provided by the District for Adam Kussard. DPI
staff received a contract that included proper supporting documentation for Adam's 2016-17 base
pay and 2016-17 tax sheltered annuity amount. The District also provided the documentation for
Adam Kussard's 2016-17 vacation payout. However, the $2,500 performance bonus for 2016-17
was only supported with an email from the District Administrator to the Business Manager.

No documentation of school board action approving the performance bonus for the 2016-17 fiscal
year was received. No documentation was provided related to the community programs and
services provided by Adam Kussard. Wis. Admin. Code § PI 80.02(3). State law requires a revenue
limit reduction o f$2,500. Wis. Stat. § 121.91(4)(r) and § 121.92(2).

On June 11, 2018, the Mercer School District responded, "No supporting documentation, revenue
reduction appropriate.

Finding 8: DPI reviewed the payroll information provided by the District for Lori Boltz. DPI
could not match the District's computation of the gross pay for Lori Boltz. The District provided a.
contract for Lori Boltz for the period starting July 1,2013, and ending July 1, 2015. DPI received
a letter dated February 23,2015, that accepted renewal of this contract for the 2015-16 and 2016-17
school years. The annual salary for the 2013-14 school year was included in the contract
received. Lori Boltz would have received the 1.62% Consumer Price Index (CPI) increase for the
2015-16 school year. Documentation approving other pay increases for Lori Boltz was not
received by DPI. The contract received included a $1,500 annual flex plan contribution and a
$2,520 deferred compensation contribution, The District contributed $2,520 to the deferred
compensation plan in 2016-17 per documentation received from the District.

DPI staff could not determine the Board's approval of the $2,520 payment to Lori's deferred

compensation plan. No documentation was provided related to the community programs and
services provided by Lori Boltz. Wis. Admin. Code § PI 80.02(3). State law requires a revenue
limit reduction of $2,520. Wis. Stat. § 121.91 (4)(r) and § 121.92(2).

On June 11, 20187 the Mercer School District responded, "No. supporting documentation, revenue
reduction appropriate.

Findings 9, 10, 11, and 12 ~-Relates to the Payroll of Several Individuals
The overall summary for Findings 9 through 12 can be found in the attached document "Summary
of Mercer SD Findings FY 2016 and FY 20 17 June 26 20 18.xlsx". No documentation was provided
indicating the salaries and benefits of the District employees were the actual, additional costs to
operate community programs and services. Wis. Admin. Code § PI 80.02(3). State law requires a
revenue limit reduction of$67, 789 .84 related to 2015-16 and $72,906.35 related to 2016-17. Wis.
Stat. § 121.9l(4)(r) and § 121.92(2).

Finding 9: DPI reviewed the payroll information provided by the District for Erik Torkelson. DPI
received a contract for Erik Torkelson that started on July 1, 2011. The contract contained a salary
amount, a flex plan contribution amount, a TSA contribution amount, and a payment in lieu of
insurance amount. The District has not provided documentation for the 2015-16 and 2016-17
school years vacation and personal day payout that would include the computation of the payout
made to Erik Torkelson. DPI received. a contract renewal letter for the 2015- 16 and 2016-17 school
years signed by Erik Torkelson. The District provided a letter, dated May 1 ,2018, explaining that
the 2015-16 school year performance bonus was approved, but not included in the school board's
minutes. DPI received no documentation approving the 2016-17 school year performance bonus.
Erik Torkelson also received a Consumer Price Index (CPI) increase for the 2015-16 and 2016-17
school years. A letter from the District Clerk, dated May 3, 2018, addressed the 2015-16 CPI
increase. DPI received no documentation approving the CPI. increase for 2016-17.

Finding 10: The District provided a computation of the 2015-16 CPI increase for Erik Torkelson.
This computation includes a base amount of $122,173 based on the wages reported on the 2015
W-2. Base wages typically exclude any other forms of compensation such as a performance bonus
and vacation payouts. The base year should also be reviewed. Typically, a 2015-16 school year
pay increase computation would use the 2014-15 school year wages. District staff will have an
incorrect computation of a pay increase if the wrong base year and base wages are used.

Finding 11: DPI received a letter, dated May 1, 2018 that was signed by five board members.
The letter stated that the September 28, 2015, executive session school board minutes were missing
the approval of the performance bonuses for the administrative staff. Per the Wisconsin Open
Meetings Law, no action should be taken in the executive/closed school board session. Closed
session is usually for discussion only. The District should review the proper process for
parliamentary action and compliance with the Open Meetings Law.

Finding 12: The District provided four Memorandum of Understandings (MOUs) between the

District and the administration staff. The MOUs state that additional duties related to community
services must be assigned to Mercer administrative staff and that the additional duties are assigned
as separate positions. The District must also have additional costs for the expenditures to be
recorded in Fund 80. The District must also substantiate the percentage of the salaries and fringe
benefits charged to Fund 80. This could be done by having job descriptions that define the specific
job duties for each position. The District has not provided documentation to substantiate the
percentage of each administrative employee's payroll that is recorded in Fund 80. Per Wis. Admin.
Code § PI 80.02(4), the District must be able to document that if Fund 80 ceased to exist the full
time status of these positions would be reduced.

On June 11, 2018, the Mercer School District responded to Findings 9,10, 11 and 12, as they relate
to the payroll of several individuals. However, the documentation did not provide a clear
description of the duties, number of hours worked to complete their duties relating to community
programs and services (Fund 80) and/or responsibilities that each of the employees who were paid
with Fund 80 revenues, based on the MOUs (Memorandum of Understandings). No documentation
was provided indicating the salaries and benefits of the District employees were the actual,
additional costs to operate community programs and services. Wis. Admin. Code § PI 80.02(3).
State law requires a revenue limit reduction of $67,789.84 related to 2015-16 and $72,906.35
related to 2016-17. Wis. Stat. § 121.91(4)(r) and § 121.92(2).

The overall financial impacts of Findings 1 through 12 can be found in the attached document
"Summary of Mercer SD Findings FY 2016 and FY 2017 June 26 2018.xlsx". In total, state law
requires a revenue limit reduction of$87,947.81 in2015-16 and $87,300.11 in2016-17. Wis. Stat.
§ 121.91(4)(r) and § 121.92(2). . 

Sincerely,

Robert A. Soldner, Director

School Financial Services Team 

Attachment: Summary of Mercer SD Findings FY 2016 and FY 2017 June 26 2018.xlsx

                     Appeal Rights

c: Noel Brandt, Mercer School Board President

Brian Pahnke, Assistant State Superintendent, Division for Finance and Management