Twenty-seven bounced checks amounting to a reported $682 in fees have led to questions regarding the handling of funds by the treasurer of the Duke Bar Association.
Both law students and members of the executive board of the DBA have spent the last two meetings discussing the matter, and the general sentiment among those in attendance at the Feb. 5 meeting was that DBA treasurer Katy Drechsel, a third year law student, was simply lax with the organization's bookkeeping and did not misuse its funds.
In order to investigate the banking problem, DBA's executive board voted Feb. 5 to audit its books. Regardless of the audit's outcome, questions will remain about DBA's handling of the issue.
The funds in question have typically been divided into two types of accounts: a checking account for immediate transactions and a savings account with a higher interest rate that stores the remainder of the $20,000 allotted to DBA each semester. Drechsel said that historically, the money in the savings account has earned enough interest to cover about half of the expenses incurred by DBA. Until recently, the savings account was maintained at Wachovia while the checking account was kept at Central Carolina Bank.
Drechsel, who has served in her post for two years, said one check bounced in October 1996, about 13 bounced last spring and the remaining 13 bounced in the fall. In response, Drechsel said, the DBA opened another account at Wachovia at the beginning of this academic year in order to close its checking account at CCB.
It is unclear the exact dates on which all of the checks were bounced. At Wachovia, however, Printz said that since Nov. 1, 10 checks have bounced.
Drechsel said her understanding of the Wachovia account was that it was one in which funds from the savings account would be automatically drawn to cover insufficient funds in the checking account. Since DBA did not have that type of account, the funds were not transferred, and the checks bounced.
The problem was magnified by the fact that an organization such as DBA tends to write checks in batches rather than singly. Therefore, Drechsel said, she would receive notice that one check had bounced only after several in its batch had already bounced.
Bounced checks from this fall semester were part of two separate batches, Drechsel said, noting that she attempted to contact Wachovia personnel after the first batch bounced.
Contributing to the problems may have been changes that were made to the treasury system during Drechsel's tenure. Rather than requiring that two people sign checks as had been done previously, only Drechsel is responsible for both signing checks and bookkeeping.
Mark Filipini, social chair for DBA and a law student, thought that having only one person sign the checks was a positive change. He said during the meeting that he remembers that finding the second check signer was often time consuming and difficult.
As a result of these difficulties, DBA is transferring its money again, this time to a University agency fund that will transfer money as needed. The $682 in fees have been covered by the administrative budget of the DBA, Drechsel said.
The executive board of DBA has also proposed to increase the treasurer's accountability to both the president and the student body. The treasurer will now be responsible for reporting the status of the accounts once each semester, said David Dickson, DBA representative and second-year law student.
A well-attended and heated DBA meeting Feb. 5 highlighted the on-going debate about the issue. The executive board approved a measure that calls on external auditors to examine DBA's bookkeeping in order to pinpoint the potential problem areas.
"My reputation is on the line and I don't want that in the hands of another Duke law student," Drechsel said.
Yearly audits are part of the DBA's constitution, but they have not been performed in recent years. Printz said that she did not appoint an auditor upon assuming office because there was an outstanding request from Joe Grant, past-president of DBA, for Drechsel to handle the matter.
Also, Printz said she has been pushing for Drechsel to take care of the audit for a considerable time. "[Drechsel] told me she was going to take care of it over the summer," Printz said.
Drechsel, however, said postponing audit was not her decision. "Any audits requested during the term were delayed for various reasons and that was a board decision," she said.
Should the audit confirm no misconduct by Drechsel, Printz said Drechsel's future on the DBA is "something for the [DBA executive] board to decide."
"[Drechsel] herself would agree that the balancing of the books... was not as tightly done as she wished," said Susan Sockwell, dean of students at the law school. "I don't think there will be any evidence that [Drechsel] paid her rent with the money."
Drechsel said that all of the money was in appropriate places. "If the money is not in one account, it's in the other," she said.
Although the DBA has taken action to remedy the current situation, the bounced checks and fees have raised a number of student concerns. Students question their entitlement to due process and the perceived lack of communication between DBA and law students. Some students also believe that DBA operates under different regulations than other student groups at the law school.
Students were further concerned with Printz's distribution of a document titled "Reasons for Audit/Issues for Concern" at the Feb. 5 meeting. This document contained a variety of statements regarding what Printz said she believes are the facts concerning the numerous bounced checks-many of which are disputed. Printz said she created the document to ensure that students were aware of events. "I felt that students had a right to know everything. This [document] is factual," she said. "There was nothing accusatory in that."
Other students disagreed with the handout, taking issue with what they called a public display of untruths. "I'm disappointed that a member of our community took it upon him or herself to print and distribute these documents prior to the meeting without substantiating some of the facts," said Krista Enns, a second-year graduate student in the school of law and the department of public policy studies.
Students also criticized DBA's perceived lack of effort to communicate about the issue. Printz said that the first time the executive board was presented with the matter was at a Jan. 27, 1998 meeting. At that meeting, many students said they felt they had not been as informed by the DBA as they felt they should have been.
Brandon Fernald, a law student who attended the Jan. 27 meeting, said that those students in attendance were told that if others wished to know of the bounced checks, they should attend future open meetings. Following the Jan. 27 meeting, Fernald wrote a letter to the DBA executive board requesting that the body inform students of the bounced checks.
"While I found the entire matter to be appalling, I was most concerned with what I perceived as an effort on the part of the DBA board to downplay... this matter [to] students," Fernald said in the letter.
DBA did send an e-mail to all students informing them of a meeting to be held at which the issue would be discussed. At the Feb. 5 meeting many students and DBA board members requested that an e-mail be sent to students to explain what had occurred. As of press time, no e-mail regarding the events of the Feb. 5 meeting had been sent to the student body.
Due to the alleged laxity on the part of the DBA executive board, students are complaining that the board is treating this issue differently that it would treat similar questions at other school clubs.
Moreover, some students agreed that while Drechsel's job is to balance the accounts, the fault lies with the entire executive board. "I think it is unfair that all of the accusations and responsibility have fallen on [Drechsel]," said Michael Anstett, a law student. "To be sure, she is the treasurer and she made a mistake. Instead of pointing fingers the DBA ought to take the initiative and ensure that [DBA officers] act according to their duties."
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