A3.1 - District staff was not aware of state law on the use of capital project money or the guidance provided in the Schools Accounting Manual.
Staff in Accounting, Budget and Payroll attended a one-day workshop in July. Training for other staff started in August, 2010. The district will have to pay back $1.2M from the General Fund to the Capital Fund.
Well, if the words "staff was not aware of state law on the use of capital project money" doesn't scare you, I don't have much left until Halloween. These are the people spending your tax dollars on our school buildings. Also, this is not some obscure area of capital spending. I'll have to try to get the minutes from this meeting but I would love to hear what was said like where we find $1.2M in the General Fund to move to Capital and when it might happen.
Actually this whole story is quite odd and I'm still trying to figure it all out. All I can tell you is that a modest program to give help to small/minority businesses trying to do business with SPS morphed into a nearly $1M a year program with 40 classes. Why would anyone up the food chain have okayed this kind of spending when we are nearly a half-a-billion dollars in backlog maintenance (95% of which is capital maintenance)? The kind of thing that makes you go, hmmm.
Other items of interest from the previous meeting:
- the district not reporting enrollment reporting based on actual weekly minutes of instruction (apparently SPS doesn't have the right kind of data system)
- personal service contracts; "district policies and procedures are violated when work begins before contracts are approved by appropriate staff." Apparently this is an ongoing problem (despite telling all the central managers about the issue). It seems that they can't get things done in time to have a final contract with say the City or UW so they start the services before they finish the contract. They need "revised processes, training plan and accountability measures." Oh, that's all.
- there are numerous payroll issues and I believe some of the payroll staff went to Chicago this summer for training. More on this later.
So at this meeting they started with Peter Maier backtracking to A5.12 on the credit cards. This may be somewhat specific to the Superintendent's "let them eat cake" retirement party because he said that the Auditor had said that the district had no policies on food/beverage (I think it was around parties and banquets but I'll have to check.) Peter says there is one and wanted to note that (but offered no evidence).
One fun one was that A5.16 was about fuel cards and "unreasonable" charges. Staff says that sometimes gas cans are used (for example by landscaping staff for mowers) and that could be it. Hard to say if gas cans could explain all of it.
A5.18 - fuel cards' PIN numbers being shared by staff. This one got Sherry's attention. She said at Boeing "that would be a fireable offense." Not much response there. Staff claims this practice has ended because cards can have multiple PINS so people don't have to share. (I know, sounds odd to me.)
A.5.19 - Hey, the Auditor made an error here. It turns out that when they thought staff was getting gas at 1 a.m., it was 1 p.m.
A5.20 about rental revenue was interesting because again, the difficulty in understanding how our district runs as it does. Apparently the Events Coordinator was holding checks in an unsecured folder for up to a week at a time. Now someone will monitor that the Events Coordinator does this. Apparently the district staff got voluntary training on these issues (like handling money?) but now it will be mandatory. There were actually several rental revenue issues like creating petty cash funds which the staff isn't supposed to be doing.
Sherry reported that she and Duggan Harman, a senior classman in central adm, visited Northshore and Bellevue school districts to see how they stay on the straight and narrow with the Auditor. They were both impressed with their systems in place already. Sherry said that Northshore has tight controls about checks and the flow of money and a huge emphasis on "cash management." Should this really be news to our district? Again, tick tock, it's 2010.
A5.25 was another interesting one, this about records retention of building rental and ASB records. Staff tried to say that sometimes when a building is being rebuilt, they move out, things get lost or misplaced. Sherry said yes, she got that but if there is a law about records, then the Capital side staff should have a safety net policy in place for those high importance items. She suggested a "checklist" of work between move out and move in. (C'mon! They're killing me. A checklist? The district has NEVER thought of this?)
A5.27 was about not having minutes of a public hearing for I-728 funds which is mandated by the state. Duggan explained he was there and there was one person testifying. (And so that would mean the "minutes" were about 5 minutes long.) Sherry, Peter and Michael all chimed in that this was the law. Michael said that we use the SPS website to put up minutes of Board meetings (well, sometimes). Someone (I didn't record which Director) asked if there was a policy about recording the minutes of their Work Sessions. (Their own Work Sessions and they have no idea if there's a policy?)
Then they moved to the "S" issues.
S1.1 was about the district not complying with Federal requirements for competitive bidding. The district says "effective September 1, 2009, instituted a process of competitive bidding and sole source documentation." Now they say that this item is not a candidate for the '09-'10 audit but I think I know one place they didn't go out for a competitive bid. Michael seemed concerned about this one for capital projects (and he would be right).
S2.1 - Here they get to the Native American program problems. They say they are still in the process of refunding money to the feds because well, they got their number of students wrong and took too much money from the feds. They also said they created the parent committee required by the grant in April 2010 (this is good except it's been part of the grant compliance for a long time so what was the problem in creating it sooner).
Here's where they stopped for the day. It's quite a slog. What struck me is that Michael DeBell complained to KUOW about the time and money wasted on the failed recall election. What about the time and money wasted in having to sit in meeting after meeting because staff doesn't know/follow the law, policies or procedures they are supposed to be upholding (not to mention the actual correction work?) It's a HUGE waste of time especially since (1) some of this was noted in past audits and (2) the Moss-Adams report, way back when, basically covered a lot of the same ground but apparently no one was listening. So when the district says they are doing things differently, there's a lot of past history to suggest otherwise.
The Board had Holly Ferguson, another senior classman in Central, drafted a Board resolution about their response to the audit that will be introduced at the next Board meeting. I will have more to say about this but I want to write the Board first. I would term the first draft "tepid." Michael and Peter both said it wasn't descriptive enough nor did not describe the scope of the work. Holly, who apparently will be gone most of October, expressed concern over getting it rewritten in time for introduction.
My suggestion to the Board: write it yourselves.
My takeaway from this meeting is that there are a lot of excuses here. But in defense of staff, you know what I think the real problem is? I think staff is overloaded with work (at least some of them are). I think they are so busy putting out fires and/or dealing with the latest directives from Dr. Goodloe-Johnson and Dr. Enfield, that they don't have the time or inclination to read about what they are to legally do and not do. The Auditor's office has said they believe the staff sometimes just does work and then waits to see if the Auditor says they did it wrong.