Jan. 1, 2006 to
June 30, 2007—
Scott Taveau works
for 18 months under
the “550-hour rule,” a
state retirement
provision that allows
him to work about 10
hours per week
while drawing both
his salary ($177,000)
and retirement
($200,000).
June 21, 2006 — A
letter from the state
Public School
Retirement System
with this date says
the Missouri
Department of
Elementary
and Secondary
Education had
reported to PSRS that
several state
superintendents,
including Taveau,
were reported to
DESE as working full
time even though
they were receiving
PSRS benefits.
July 19, 2006 —
Another letter from
PSRS with this date
says that Taveau’s
contract indicated he
had not terminated
employment with the
district and that his
contract appeared as
if it provided him
benefits as though he
were a full-time
employee with the
district through June
30, 2007. Under
Missouri statutes, a
PSRS member must
terminate employment
with a PSRS-covered
employer prior to
receiving a PSRS
benefit, the letter said.
July 24, 2006 —
Taveau announces
publicly at a school
board meeting that he
would retire June 30,
2007. The school
board votes to
accept his
resignation effective
June 30, 2007.
July 25, 2006 —
Local newspaper
article headline,
“Superintendent to
retire in summer
2007,” states "Liberty
superintendent of
schools Dr. Scott
Taveau announced
he will retire effective
June 30, 2007, at the
regular business
meeting of the Liberty
Board of Education
held July 24, 2006.
At the end of the
2006-07 school year,
Dr. Taveau will have
served eight years
as Liberty's
superintendent of
schools and 34 years
as a Missouri
educator. After
recognizing Taveau's
tenure and
accomplishments in
Liberty, and then
regretfully accepting
Taveau's resignation
letter, the board of
education announced
its plan to identify and
employ a new
superintendent for
the 2007-2008 school
year."
Aug. 3, 2006 —
Taveau provides a
letter dated Oct. 18,
2005, to PSRS’s
general counsel Alan
Thompson saying
Taveau’s retirement
date is Dec. 31, 2005.
June 30, 2007—
Scott Taveau works
for 18 months under
the “550-hour rule,” a
state retirement
provision that allows
him to work about 10
hours per week
while drawing both
his salary ($177,000)
and retirement
($200,000).
June 21, 2006 — A
letter from the state
Public School
Retirement System
with this date says
the Missouri
Department of
Elementary
and Secondary
Education had
reported to PSRS that
several state
superintendents,
including Taveau,
were reported to
DESE as working full
time even though
they were receiving
PSRS benefits.
July 19, 2006 —
Another letter from
PSRS with this date
says that Taveau’s
contract indicated he
had not terminated
employment with the
district and that his
contract appeared as
if it provided him
benefits as though he
were a full-time
employee with the
district through June
30, 2007. Under
Missouri statutes, a
PSRS member must
terminate employment
with a PSRS-covered
employer prior to
receiving a PSRS
benefit, the letter said.
July 24, 2006 —
Taveau announces
publicly at a school
board meeting that he
would retire June 30,
2007. The school
board votes to
accept his
resignation effective
June 30, 2007.
July 25, 2006 —
Local newspaper
article headline,
“Superintendent to
retire in summer
2007,” states "Liberty
superintendent of
schools Dr. Scott
Taveau announced
he will retire effective
June 30, 2007, at the
regular business
meeting of the Liberty
Board of Education
held July 24, 2006.
At the end of the
2006-07 school year,
Dr. Taveau will have
served eight years
as Liberty's
superintendent of
schools and 34 years
as a Missouri
educator. After
recognizing Taveau's
tenure and
accomplishments in
Liberty, and then
regretfully accepting
Taveau's resignation
letter, the board of
education announced
its plan to identify and
employ a new
superintendent for
the 2007-2008 school
year."
Aug. 3, 2006 —
Taveau provides a
letter dated Oct. 18,
2005, to PSRS’s
general counsel Alan
Thompson saying
Taveau’s retirement
date is Dec. 31, 2005.
Feb. 1, 2008 — This is
the normal deadline each
year to renew a superin-
tendent’s three-year
contract, but the Liberty
school board had not yet
renewed Wright’s
contract, which he
signed in December
2006. In years past, the
board had voted to
renew the superinten-
dent’s contract for an
additional year at its
regular January board
meeting. By a closed
session meeting on
March 28, 2008, the
board still had not voted
to renew Wright’s
contract.
March 10, 2008 —
Phil Wright says during
an interview with the
Liberty Tribune that he
communicated his
concerns to the school
board and PSRS about
Taveau’s contract. Steve
Yoakum, executive
director of PSRS, later
confirmed that Wright
made his concerns
known but that PSRS
received certifications
from Taveau and the
school board that
Taveau would not be
employed more than 550
hours per school year.
Wright was also the
chairman of the PSRS
Board of Directors at the
time.
March 20, 2008 —
News becomes public
that school district patron
William Carlin Walker,
through Sunshine Law
requests to the district,
had uncovered
documents showing that
four top Liberty
administrators, including
Taveau and Wright,
made about $75,000 in
school district credit card
charges during the 2007
calendar year for which
they did not include
submitted receipts.
Charges show Taveau
made school district
credit card charges on
days he reported to
PSRS as not to be
working in accordance
with the 550-hour rule.
March 27, 2008 — A
news article reports
Taveau said he worked
full time the last year of
his tenure: “I was 24/7.
I worked 10-, 12-, 14-
hour days.”
the normal deadline each
year to renew a superin-
tendent’s three-year
contract, but the Liberty
school board had not yet
renewed Wright’s
contract, which he
signed in December
2006. In years past, the
board had voted to
renew the superinten-
dent’s contract for an
additional year at its
regular January board
meeting. By a closed
session meeting on
March 28, 2008, the
board still had not voted
to renew Wright’s
contract.
March 10, 2008 —
Phil Wright says during
an interview with the
Liberty Tribune that he
communicated his
concerns to the school
board and PSRS about
Taveau’s contract. Steve
Yoakum, executive
director of PSRS, later
confirmed that Wright
made his concerns
known but that PSRS
received certifications
from Taveau and the
school board that
Taveau would not be
employed more than 550
hours per school year.
Wright was also the
chairman of the PSRS
Board of Directors at the
time.
March 20, 2008 —
News becomes public
that school district patron
William Carlin Walker,
through Sunshine Law
requests to the district,
had uncovered
documents showing that
four top Liberty
administrators, including
Taveau and Wright,
made about $75,000 in
school district credit card
charges during the 2007
calendar year for which
they did not include
submitted receipts.
Charges show Taveau
made school district
credit card charges on
days he reported to
PSRS as not to be
working in accordance
with the 550-hour rule.
March 27, 2008 — A
news article reports
Taveau said he worked
full time the last year of
his tenure: “I was 24/7.
I worked 10-, 12-, 14-
hour days.”
| P E Y T O N W O L C O T T |
| H o w w e t a k e b a c k o u r c h i l d r e n ' s e d u c a t i o n : o n e p e r s o n , o n e q u e s t i o n , o n e s c h o o l a t a t i m e . Copyright 1999-2008 Peyton Wolcott |
| Conservative Commentary - M i s s o u r i |
How we take back our children's education: one person, one question, one school at a time. |
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HOME
| May 23, 2009: Friends, a small group of Liberty, Missouri parents and taxpayers, led by William Carlin Walker and Jim Moores, were concerned about rising taxes and waste in their schools; they persisted in bringing accountability to Liberty Public School District and superintendent Scott Taveau. This is some of their story, with more being added throughout the weekend, including Scott's role as executive director of the Cooperating School Districts of Greater Kansas City plus much additional breaking news, including Thursday's judge's ruling that district taxpayers are now on the hook for a $78K repayment to the Missouri's retirement system. |
| 2 0 0 6 |
| Scott Taveau in Florida (L) and back hom in Missouri (R) |
PHASE 2 - RELEASED JULY 7, 2008
LIBERTY 53 SCHOOL DISTRICT
AGREED-UPON PROCEDURES
WESTBROOK & CO., P.C.
Certified Public Accountants
Board of Education
Liberty 53 School District
605 Conistor
Liberty, MO 64068
We have performed the procedures enumerated
below to the accounting and financial systems,
which
were agreed to by the Liberty 53 School District.
This engagement to apply agreed-upon
procedures was
performed in accordance with standards
established by the American Institute of Certified
Public
Accountants. The sufficiency of the procedures
is solely the responsibility of the District.
Consequently,
we make no representation regarding the
sufficiency of the procedures described below
either for the
purposes for which this report has been
requested or for any other purpose.
Our procedures included two phases. We
reported to the Board on Phase One on March
31, 2008. The
purpose of this report is to communicate our
findings resulting from Phase Two. This phase
included the
following procedures.
1. We will meet with the Board and/or District
officials to select areas identified in Phase One
for further analysis and investigation.
2. We will perform additional analysis which may
include, but is not limited to, the following:
a) Conduct interviews of personnel to assist in
determining causes of concerns
identified in Phase One.
b) Make inquiries with third parties to confirm and
obtain support as needed in
determining causes of concerns identified in
Phase One.
c) Test of detail transactions, financial
documents, or other supporting documentation
as needed to support findings.
d) Determine duties and responsibilities of District
staff relating to areas selected for
further analysis and investigation.
3. We will submit a report listing the procedures
performed and the results of those
procedures.
LIBERTY 53 SCHOOL DISTRICT
AGREED-UPON PROCEDURES
WESTBROOK & CO., P.C.
Certified Public Accountants
Board of Education
Liberty 53 School District
605 Conistor
Liberty, MO 64068
We have performed the procedures enumerated
below to the accounting and financial systems,
which
were agreed to by the Liberty 53 School District.
This engagement to apply agreed-upon
procedures was
performed in accordance with standards
established by the American Institute of Certified
Public
Accountants. The sufficiency of the procedures
is solely the responsibility of the District.
Consequently,
we make no representation regarding the
sufficiency of the procedures described below
either for the
purposes for which this report has been
requested or for any other purpose.
Our procedures included two phases. We
reported to the Board on Phase One on March
31, 2008. The
purpose of this report is to communicate our
findings resulting from Phase Two. This phase
included the
following procedures.
1. We will meet with the Board and/or District
officials to select areas identified in Phase One
for further analysis and investigation.
2. We will perform additional analysis which may
include, but is not limited to, the following:
a) Conduct interviews of personnel to assist in
determining causes of concerns
identified in Phase One.
b) Make inquiries with third parties to confirm and
obtain support as needed in
determining causes of concerns identified in
Phase One.
c) Test of detail transactions, financial
documents, or other supporting documentation
as needed to support findings.
d) Determine duties and responsibilities of District
staff relating to areas selected for
further analysis and investigation.
3. We will submit a report listing the procedures
performed and the results of those
procedures.
| T I M E L I N E (supes & board) |
| 2 0 0 7 |
| Many entries for 2006-2008 are from Natalie Shelton at KC Community News |
| 2 0 0 8 |
| 2 0 0 9 |
Feb. 9, 2007 —
PSRS received a
letter with this
date from then-
school board
President Bob
Young, who
assured its
general counsel
that Taveau was
not working more
than 550 hours
during the 2006-
2007 contract
year.
June 28, 2007
— Local
newspaper
article headline
reads "Superin-
tendent retires
from school
district.”
PSRS received a
letter with this
date from then-
school board
President Bob
Young, who
assured its
general counsel
that Taveau was
not working more
than 550 hours
during the 2006-
2007 contract
year.
June 28, 2007
— Local
newspaper
article headline
reads "Superin-
tendent retires
from school
district.”
April 28, 2009
Taveau indicted by
Clay County (MO)
grand jury on two
felony stealing
charges alleging he
received by deceit
PSRS retirement
benefits and vacation
pay to which he was
not entitled.
April 30, 2009
Taveau arrested at
second home in Florida
and held in jail 16 days
because State of
Florida misplaced
paperwork.
May 15, 2009
Taveau extradited
back from second
home in Florida.
May 21, 2009
Taveau pleads not
guilty in court.
Taveau indicted by
Clay County (MO)
grand jury on two
felony stealing
charges alleging he
received by deceit
PSRS retirement
benefits and vacation
pay to which he was
not entitled.
April 30, 2009
Taveau arrested at
second home in Florida
and held in jail 16 days
because State of
Florida misplaced
paperwork.
May 15, 2009
Taveau extradited
back from second
home in Florida.
May 21, 2009
Taveau pleads not
guilty in court.
| 1988-2002 |
1997-98
Taveau named
Missouri "Superinten-
dent of the Year" by
the Missouri Ass'n of
School Administrators
(MASA)
Taveau named
Missouri "Superinten-
dent of the Year" by
the Missouri Ass'n of
School Administrators
(MASA)
1988 - Taveau goes
to work for Hannibal
PSD (MO) as their
supe.
to work for Hannibal
PSD (MO) as their
supe.
1999
Taveau resigns from
Hannibal to take
position at Liberty
Public School District.
Taveau resigns from
Hannibal to take
position at Liberty
Public School District.
2001-02
Taveau is elected
president of the
Missouri Association
of School
Administrators
(MASA).
Nov. 16, 2001
Taveau testifies
before the Missouri
Joint Interim
Committee on
Education Finance
that additional school
funding is necessary
and the most viable
option for the funds is
a one-quarter-
cent sales tax; more
here:.
Taveau is elected
president of the
Missouri Association
of School
Administrators
(MASA).
Nov. 16, 2001
Taveau testifies
before the Missouri
Joint Interim
Committee on
Education Finance
that additional school
funding is necessary
and the most viable
option for the funds is
a one-quarter-
cent sales tax; more
here:.
MISSOURI Report of the House Interim Committee on Education-Capital Improvements and Maintenance December 11, 2001 ______ Dr. Scott Taveau, Superintendent, Liberty 53 District and president of the Missouri Association of School Administrators. Dr. Taveau believes that the capital funding bills that were introduced last year were a step forward in getting the message out for people to hear, and that this coming legislative session will offer a chance to follow up; the key is finding the funding source. The most viable option he sees is the one-quarter-cent sales tax. He stressed that any funding should be made available to all districts over a 10-year period. In response to committee questions, Dr. Taveau responded that the simple majority is an issue that goes hand-in-hand with state support for school building. He agreed that the local property tax is almost universally hated. A local income tax option might be helpful but would be of limited use in small districts. In regard to a possible roads-schools sales tax to support statewide bonds, he favored at least exploring the possibility. On a questions regarding how equity would function when faced with a high-assessed-value but high-need district, he replied that a good prioritization of need was essential. Liberty passed a $36 million bond issue at 83.2%, but the district is at its debt ceiling. |
| Jan. 2008 Liberty PSD wrote a check to Scott Taveau in the amount of $45,382.00 for consulting fees. Here's the detail from LPSD's online check register (URL below): |
| 10*572877 W SCOTT TAVEAU 45382.00 GENERAL ALL DIST SUPT OTH PU 11-2321-6391-999-00 0 CONSULTFEE. |
Jan. 2008 check to Scott
Taveau
www.boarddocs.com/mo/lpsdmo/Board.
nsf/e8ac4a42f9b5eaa18725731b0060c
d11/7429528b2a5c0cbd872573ed0057
3012/$FILE/January%20Bills.pdf
Taveau
www.boarddocs.com/mo/lpsdmo/Board.
nsf/e8ac4a42f9b5eaa18725731b0060c
d11/7429528b2a5c0cbd872573ed0057
3012/$FILE/January%20Bills.pdf
| May 9, 2008 Scott Taveau, the executive director of an association representing the interests of 22 local school districts, has resigned from the Cooperating School Districts of Greater Kansas City; the group's interim board of directors unanimously accepted Taveau’s resignation at a special meeting on Wednesday.Taveau, the former superintendent of Liberty School District, has been under increased scrutiny from the school district’s auditors and from the Public School and Education Employee Retirement System in Jefferson City. Larry Ewing, superintendent of Ft. Osage School District and president of the association’s interim board, offered no indication in a press release Thursday whether Taveau was forced to step down.“ www.kansascity. com/news/breaking_new s/story/611379.html |
July 9, 2008 — Phil
Wright holds a press
conference at the federal
courthouse in downtown
Kansas City and
announces that he will
sue the school district for
wrongful dismissal.
July 14, 2008 – The
Board of Education
releases a financial audit
conducted by Westbrook
& Co.
Wright holds a press
conference at the federal
courthouse in downtown
Kansas City and
announces that he will
sue the school district for
wrongful dismissal.
July 14, 2008 – The
Board of Education
releases a financial audit
conducted by Westbrook
& Co.
July 1, 2007 —
Phil Wright begins
duties as the
Liberty school
district’s new
superintendent.
Phil Wright begins
duties as the
Liberty school
district’s new
superintendent.
| Phil Wright |
| Scott Taveau |
April 4, 2008 - Liberty
parent/accountant
William Walker presents
findings from a public
records request:
"several questionable
expenses, including
travel expenses for
which there were no
receipts and liquor
purchased with school
funds" to local TV
reporter-- view KCTV5
here and KMBCTV
video here.
April 14, 2008 — The
Board of Education
holds a news
conference to
announce that Wright
has resigned as
superintendent. More
here from KCTV5.
parent/accountant
William Walker presents
findings from a public
records request:
"several questionable
expenses, including
travel expenses for
which there were no
receipts and liquor
purchased with school
funds" to local TV
reporter-- view KCTV5
here and KMBCTV
video here.
April 14, 2008 — The
Board of Education
holds a news
conference to
announce that Wright
has resigned as
superintendent. More
here from KCTV5.
Jan. 2008 emails
Supe Phil Wright &
Board Pres. Bob Young
Phil,
I want you to know your
efforts in the past to
make things work
financially when the
spending
was out of your control
has been and still is
appreciated. I also hope
you know that one of
your strengths in being
selected for the
Superintendent's job was
your knowledge of finance
and budget and your
fiscal conservatism. This
Board absolutely
believes you will not put
us
in a position of fiscal
irresponsibility.
As we all know, we are in
an unprecedented period
of growth. Nine buildings
in ten years if
we assume the passage
of the next two (2) bond
issues. And that is
tremendous growth, not
just in terms of bonding
capacity, but also in
terms of on going
operating expenses.
Additionally, we have
asked you to find
additional operating
money to support 25 new
teaching positions just in
the last year. The Board's
requests has added
strain to our
operating budget. I, as I
am sure you do, simply
want to assure that we
are doing
appropriate planning,
both short term and long
range.
I appreciated the your
comments/explanation
below and I knew you
had this all figured out. I
just wanted to make sure
that information was
shared with the Board as
a part of the
workshop conversation.
We are asked by patrons
from time to time about
those types of
administrative growth
matters. Especially with
three positions up for
election, just want to
make sure we are all
able to answer those
types of inquiries.
Thanks.
Bob
From: Wright, Phil
Sent: Tue 1/8/2008 7:52
AM
To: Young, Robert;
Dunlap, Cindy
Subject: RE: Friday
Update
I was re-reading your
work session items…
Fyi
On the new
administrative
positions…The Director
of Business
Operations was a
replacement (at a much
reduced rate than Carol)
and Support Services will
be covered with savings
from Dee’s old
salary to his new, plus
not having to pay Jim
Dunn’s sweetheart deal
that Scott set up…
On the short and long
range funding, we are
staying pretty close to
home on our estimates
meaning we will look to
some conservative
numbers for new money.
The best thing we could
do is cut down on some
middle level director
positions…I feel we can
consolidate some…and
to be honest we don’t
need two people making
over $300,000 total in
HR…one plus the SIX
secretaries can do it…
(Steve has been allowed
to over hire and it’s a
drag on a lot of
spreadsheets…)
To be honest with both of
you….I am getting to the
point where I am
defending Scott’s nine
years as my
responsibility and I am
not liking
it one bit. So I will be
much more direct with
you two on my opinions,
especially in regards to
finance and our fiscal
health…
I hope you both
understand that over the
past nine years I have
spent thousands of
hours of weekends, late
evenings at the office and
at home covering his
decisions…some were
great, many expensive
ones were made without
my involvement…
I would never place this
district in any type of
peril….I have spent too
much time and given of
myself to allow it to
happen…
Dr. Phil Wright
Superintendent of
Schools
Liberty Public Schools
650 Conistor
Liberty, MO 64068
816.736.5306 Fax
816.736.5300 Phone
pwright@liberty.k12.mo.
us
From: Young, Robert
Sent: Monday, January
07, 2008 9:55 AM
To: Dunlap, Cindy;
Wright, Phil
Subject: RE: Friday
Update
Phil,
I just want to commend
you on making the
decision to use the Early
Childhood Center for
the Board Workshop. I
think that will be a great
venue and appears to be
judicious in terms
of public appearance.
Also, great selections
with regard to the
individuals who will head
the
bond campaign. The
Sallee's and Triplett's will
be outstanding names to
have associated
with this effort.
A couple of items for the
work session: 1) I know
you plan to address work
surrounding the
salary schedule for new
teachers and other
schedule adjustments - I
would ask you include
not only the short term
resources for budget
support but also the long
range support for
these proposed
increases. 2) Regarding
the new administrative
positions - The same
budgetary questions and
to cover the justification (i.
e. - We added a Director
for Business
Services last fall and now
we are adding and
Executive Director for
Support Services).
Also, I feel as though we
may need to have Greg
Bricker back, either at the
work session or
executive session before
the next Board. In the
past, there was a more
detailed explanation
offered (as I recall) of the
history of the bond issue,
what and when we had
borrowed, what
and when we had paid,
etc. as a part of the
presentation to the Board
in open session. I
have heard from at least
one other Board member
on that issue, indicating
they really felt
like more information
was needed as we only
do this about every four
years.
Thanks for your ongoing
communications.
Bob
Supe Phil Wright &
Board Pres. Bob Young
Phil,
I want you to know your
efforts in the past to
make things work
financially when the
spending
was out of your control
has been and still is
appreciated. I also hope
you know that one of
your strengths in being
selected for the
Superintendent's job was
your knowledge of finance
and budget and your
fiscal conservatism. This
Board absolutely
believes you will not put
us
in a position of fiscal
irresponsibility.
As we all know, we are in
an unprecedented period
of growth. Nine buildings
in ten years if
we assume the passage
of the next two (2) bond
issues. And that is
tremendous growth, not
just in terms of bonding
capacity, but also in
terms of on going
operating expenses.
Additionally, we have
asked you to find
additional operating
money to support 25 new
teaching positions just in
the last year. The Board's
requests has added
strain to our
operating budget. I, as I
am sure you do, simply
want to assure that we
are doing
appropriate planning,
both short term and long
range.
I appreciated the your
comments/explanation
below and I knew you
had this all figured out. I
just wanted to make sure
that information was
shared with the Board as
a part of the
workshop conversation.
We are asked by patrons
from time to time about
those types of
administrative growth
matters. Especially with
three positions up for
election, just want to
make sure we are all
able to answer those
types of inquiries.
Thanks.
Bob
From: Wright, Phil
Sent: Tue 1/8/2008 7:52
AM
To: Young, Robert;
Dunlap, Cindy
Subject: RE: Friday
Update
I was re-reading your
work session items…
Fyi
On the new
administrative
positions…The Director
of Business
Operations was a
replacement (at a much
reduced rate than Carol)
and Support Services will
be covered with savings
from Dee’s old
salary to his new, plus
not having to pay Jim
Dunn’s sweetheart deal
that Scott set up…
On the short and long
range funding, we are
staying pretty close to
home on our estimates
meaning we will look to
some conservative
numbers for new money.
The best thing we could
do is cut down on some
middle level director
positions…I feel we can
consolidate some…and
to be honest we don’t
need two people making
over $300,000 total in
HR…one plus the SIX
secretaries can do it…
(Steve has been allowed
to over hire and it’s a
drag on a lot of
spreadsheets…)
To be honest with both of
you….I am getting to the
point where I am
defending Scott’s nine
years as my
responsibility and I am
not liking
it one bit. So I will be
much more direct with
you two on my opinions,
especially in regards to
finance and our fiscal
health…
I hope you both
understand that over the
past nine years I have
spent thousands of
hours of weekends, late
evenings at the office and
at home covering his
decisions…some were
great, many expensive
ones were made without
my involvement…
I would never place this
district in any type of
peril….I have spent too
much time and given of
myself to allow it to
happen…
Dr. Phil Wright
Superintendent of
Schools
Liberty Public Schools
650 Conistor
Liberty, MO 64068
816.736.5306 Fax
816.736.5300 Phone
pwright@liberty.k12.mo.
us
From: Young, Robert
Sent: Monday, January
07, 2008 9:55 AM
To: Dunlap, Cindy;
Wright, Phil
Subject: RE: Friday
Update
Phil,
I just want to commend
you on making the
decision to use the Early
Childhood Center for
the Board Workshop. I
think that will be a great
venue and appears to be
judicious in terms
of public appearance.
Also, great selections
with regard to the
individuals who will head
the
bond campaign. The
Sallee's and Triplett's will
be outstanding names to
have associated
with this effort.
A couple of items for the
work session: 1) I know
you plan to address work
surrounding the
salary schedule for new
teachers and other
schedule adjustments - I
would ask you include
not only the short term
resources for budget
support but also the long
range support for
these proposed
increases. 2) Regarding
the new administrative
positions - The same
budgetary questions and
to cover the justification (i.
e. - We added a Director
for Business
Services last fall and now
we are adding and
Executive Director for
Support Services).
Also, I feel as though we
may need to have Greg
Bricker back, either at the
work session or
executive session before
the next Board. In the
past, there was a more
detailed explanation
offered (as I recall) of the
history of the bond issue,
what and when we had
borrowed, what
and when we had paid,
etc. as a part of the
presentation to the Board
in open session. I
have heard from at least
one other Board member
on that issue, indicating
they really felt
like more information
was needed as we only
do this about every four
years.
Thanks for your ongoing
communications.
Bob
The findings in this report raise
various degrees of concern. Such
findings may deal with fraud, abuse or best
practices. These terms are defined as follows:
Fraud - Fraud involves such acts as deception,
bribery, forgery, extortion, corruption, theft,
conspiracy, embezzlement, misappropriation,
false representation, concealment of material
facts and collusion. For practical purposes
fraud may be defined as the use of deception
with the intention of obtaining an advantage,
avoiding an obligation or causing loss to
another party.
Abuse - Abuse involves behavior that is
deficient or improper when compared with
behavior that a prudent person would consider
a reasonable and necessary business practice
given the facts and circumstances. Abuse also
includes misuse of authority or position for
personal financial interests or those of an
immediate or close family member or business
associate.
Best Practices - A way or method of
accomplishing a business function or process
that is considered to be superior to all other
known methods. A technique or methodology
that, through experience and research, has
proven to reliably lead to a desired result.
Our findings and
recommendations are as follows:
1. CREDIT CARD CHARGES
1.1 Finding - We noted many instances of what
appear to be fraudulent use or abuse of District
credit cards. Specifically, we noted charges for
extravagant dining, purchase of alcoholic
beverages, purchase of items that appeared to
be personal in nature, charges for travel for
spouses of District administrators and board
members, and charges for items that should
have been processed through the District’s
purchasing policies and procedures. Some of
the findings are as follows:
a. We noted many charges for airline tickets,
lodging, and dining/entertainment for which no
documentation was provided and no indication
of the meeting/conference attended. We were
therefore unable to determine if there was a
bona fide District related business purpose for
the travel.
b. We noted that a former superintendent and
top administrators made numerous charges for
alcoholic beverages; including multiple bottles of
wine. Confirmed alcoholic beverage charges
on receipts provided by third party vendors
were $4,513. These charges occurred from
August, 2005 through December, 2007 and are
limited to those charges for which we were
able to acquire receipts from third parties.
c. We noted charges for dining and alcoholic
beverages late into one evening, with as many
as 46 alcoholic beverages consumed
during this outing. The payment of the tab
was split between two administrators. It
appears that this may have been done in order
to obscure the total cost of the outing.
d. We noted charges for 14 pitchers of
beer at a pub in Cedar Falls, IA where the
tab began at 10:29 PM; account coding
indicated “recruiting”. Per the receipt, there
were six guests; thus approximately 56 beers
would have been consumed.
e. We noted that $467 in alcoholic beverages
were purchased in conjunction with an
“administrator’s retreat” to the Royals Stadium
Club on August 5, 2005 where a prior
superintendent was present. According to
interviews with District personnel, the CFO
expressed concern and alerted the
superintendent to the alcoholic beverage
charges, upon which the accounts payable
check dated August 5, 2005 was voided. On
August 8, 2005, this same superintendent
charged the alcoholic beverages on the
District’s American Express card.
f. We found that a past superintendent
organized an event at a local dinner theatre for
administrators and board members where the
cost to the District for tickets and alcoholic
beverages were $4,275 and $1,341,
respectively. The District was reimbursed by an
outing sponsor, a service provider to the
District, for separately billed deserts and non-
alcoholic beverages of $731.
g. We noted charges to the District credit card
for alcoholic beverages which were
charged to a District account code
associated with a Federal program. Per
Circular A-87, alcoholic beverages are not an
allowable expense. By charging this expense
to a Federal program, the administrator
placed the District in non-compliance with
Federal program reimbursement criteria.
h. We noted a charge for $180 for a spa visit
in Marco Island, Florida.
i. We noted a charge for a flower delivery of
$143 to a superintendent’s spouse.
j. We found that a former superintendent and
top administrator reserved more expensive
lodging for themselves than that of the other
District travelers. Specifically, we noted that
rooms at the Hyatt Hotels in San Francisco, CA
were $30 per night higher for the identified
administrators, than that of the other
participants.
k. We noted that a former superintendent
redeemed District earned American Express
reward points for what appeared to be
personal items. Specifically, we noted that
87,000 American Express points earned by the
District were redeemed for Oakley sunglasses,
two golf clubs and two Hertz rental car
certificates. The values of these items are
approximately $140, $180 and $350,
respectively.
l. We confirmed that the past superintendent
charged travel expenses to the District’s
American Express card for travel related to his
role as a board member for the Public School
Retirement System, while also receiving
reimbursement from this association for which
he performed duties. Thus, he was being paid
personally by the association for expenses
paid by the District. We noted a total of $3,906
in improper reimbursements. Of this amount,
$2,459 was repaid by the past superintendent
during March and April 2008. The remaining
amount of $1,447 is unpaid as of this date.
m. We noted that gift cards or certificates
were purchased with no indication of the
purpose of the purchase or the recipient
of the gift cards. We confirmed nine gift card
purchases with third parties with value ranging
from $25 to $200 for steaks, dining, and
shopping. This raises concerns since gift cards
are highly susceptible to fraud.
n. We noted a charge made to the District of
$66 for cell phone accessories where the
receipt indicated the customer was the spouse
of a District administrator. We confirmed with
Sprint sales personnel that the receipt which
we examined properly identified the actual user.
o. We noted that personnel sometimes rented
vehicles while attending an out of state
conference. In many of these cases we
question the need for car rentals, since most
conferences are held at hotels and shuttle
service is available to and from the airport.
Further, it appears that some of the car
rentals may have been for personal or
sightseeing purposes. We noted in a few
cases, limousine charges for transportation
between the airport and the hotel; in one
instance the charge was $120.
p. We noted several instances where tipping
appeared excessive; in one case we noted the
past superintendent tipped 49% on a $175.56
dining ticket. We also noted other charges
which included tips in excess of 20%.
Recommendation - We had previously
recommended and the District established travel
procedures effective March 2008. We now
recommend that the District closely monitor
travel expense to insure that they comply with
the newly established procedures. Further, we
recommend that the District update and monitor
the list of disallowed or unacceptable expenses
as unforeseen expenses occur in the future.
This updated policy or procedure should include
an expanded section on abuse as
recommended in Section 6 of this report.
1.2 Finding - We found that there was seldom,
if ever, receipts or detailed explanations
of credit card charges for four past and
present administrators. Each of these four
individuals would provide their account coding
on the credit card statement with no attachment
of receipts or the official “credit card receipt
form” used by the District. We sampled other
administrative staffs’ documentation and found
that the required forms were prepared and
submitted with the appropriate receipts and
source documents attached. We therefore,
presume that the District had controls in place
which required the production of a detailed
receipt and the preparation of the credit card
receipt form when charges were incurred, and
that certain top administrators ignored these
procedures.
Recommendation - We recommend that the
District monitor all credit card activity and
reimbursement requests to insure that proper
documentation is provided as to the purpose of
the expense and detail of all attendees and their
relationship to the District. Further, we
recommend that the District require that all
credit card activity is substantiated by a
detailed receipt and that it includes an
explanation of the purpose of the expenditure.
For any expenditure for which no
documentation is provided, the staff person
should be required to timely reimburse the
District for the unsubstantiated charge.
1.3 Finding - Upon review of credit card
statements and charges, we found numerous
charges for travel for the spouses of
administrators. Some, but not all of these
charges, were reimbursed by the
administrators. As of this date, $2,143 has yet
to be reimbursed.
Recommendation - We recommend that the
District seek reimbursement for all unpaid
charges as soon as possible and that the
District cease charging expenses for non-
district personnel on the District charge
card. Charges for spouses should be charged
to the individual’s credit card rather than that of
the District. Further, we recommend that the
District designate an individual or department to
handle all travel arrangements for the District.
This will insure that the District receives the
benefit of group travel discounts and that
charges for excessive or extravagant travel
does not occur.
1.4 Finding - We also investigated
reimbursement request and credit card charges
relating to board members. It was noted that no
board members ever had a District card nor had
any board member personally initiated charges
using a District card. Additionally, we noted that
it was not unusual for the District to charge and
pay for travel to meetings for board members
as well as spouses of such members.
Further, we noted that some meal charges for
spouses were included on the District credit
card when group dinners were paid for by an
attending administrator. As of this date, all
reimbursements for such expenses have been
received from school board members. Finally,
we noted that reimbursement by board
members were not always timely. In some
cases reimbursements to the District were
received over 13 months after the date of
travel. Four current and one past board member
had occurrences as follows:
various degrees of concern. Such
findings may deal with fraud, abuse or best
practices. These terms are defined as follows:
Fraud - Fraud involves such acts as deception,
bribery, forgery, extortion, corruption, theft,
conspiracy, embezzlement, misappropriation,
false representation, concealment of material
facts and collusion. For practical purposes
fraud may be defined as the use of deception
with the intention of obtaining an advantage,
avoiding an obligation or causing loss to
another party.
Abuse - Abuse involves behavior that is
deficient or improper when compared with
behavior that a prudent person would consider
a reasonable and necessary business practice
given the facts and circumstances. Abuse also
includes misuse of authority or position for
personal financial interests or those of an
immediate or close family member or business
associate.
Best Practices - A way or method of
accomplishing a business function or process
that is considered to be superior to all other
known methods. A technique or methodology
that, through experience and research, has
proven to reliably lead to a desired result.
Our findings and
recommendations are as follows:
1. CREDIT CARD CHARGES
1.1 Finding - We noted many instances of what
appear to be fraudulent use or abuse of District
credit cards. Specifically, we noted charges for
extravagant dining, purchase of alcoholic
beverages, purchase of items that appeared to
be personal in nature, charges for travel for
spouses of District administrators and board
members, and charges for items that should
have been processed through the District’s
purchasing policies and procedures. Some of
the findings are as follows:
a. We noted many charges for airline tickets,
lodging, and dining/entertainment for which no
documentation was provided and no indication
of the meeting/conference attended. We were
therefore unable to determine if there was a
bona fide District related business purpose for
the travel.
b. We noted that a former superintendent and
top administrators made numerous charges for
alcoholic beverages; including multiple bottles of
wine. Confirmed alcoholic beverage charges
on receipts provided by third party vendors
were $4,513. These charges occurred from
August, 2005 through December, 2007 and are
limited to those charges for which we were
able to acquire receipts from third parties.
c. We noted charges for dining and alcoholic
beverages late into one evening, with as many
as 46 alcoholic beverages consumed
during this outing. The payment of the tab
was split between two administrators. It
appears that this may have been done in order
to obscure the total cost of the outing.
d. We noted charges for 14 pitchers of
beer at a pub in Cedar Falls, IA where the
tab began at 10:29 PM; account coding
indicated “recruiting”. Per the receipt, there
were six guests; thus approximately 56 beers
would have been consumed.
e. We noted that $467 in alcoholic beverages
were purchased in conjunction with an
“administrator’s retreat” to the Royals Stadium
Club on August 5, 2005 where a prior
superintendent was present. According to
interviews with District personnel, the CFO
expressed concern and alerted the
superintendent to the alcoholic beverage
charges, upon which the accounts payable
check dated August 5, 2005 was voided. On
August 8, 2005, this same superintendent
charged the alcoholic beverages on the
District’s American Express card.
f. We found that a past superintendent
organized an event at a local dinner theatre for
administrators and board members where the
cost to the District for tickets and alcoholic
beverages were $4,275 and $1,341,
respectively. The District was reimbursed by an
outing sponsor, a service provider to the
District, for separately billed deserts and non-
alcoholic beverages of $731.
g. We noted charges to the District credit card
for alcoholic beverages which were
charged to a District account code
associated with a Federal program. Per
Circular A-87, alcoholic beverages are not an
allowable expense. By charging this expense
to a Federal program, the administrator
placed the District in non-compliance with
Federal program reimbursement criteria.
h. We noted a charge for $180 for a spa visit
in Marco Island, Florida.
i. We noted a charge for a flower delivery of
$143 to a superintendent’s spouse.
j. We found that a former superintendent and
top administrator reserved more expensive
lodging for themselves than that of the other
District travelers. Specifically, we noted that
rooms at the Hyatt Hotels in San Francisco, CA
were $30 per night higher for the identified
administrators, than that of the other
participants.
k. We noted that a former superintendent
redeemed District earned American Express
reward points for what appeared to be
personal items. Specifically, we noted that
87,000 American Express points earned by the
District were redeemed for Oakley sunglasses,
two golf clubs and two Hertz rental car
certificates. The values of these items are
approximately $140, $180 and $350,
respectively.
l. We confirmed that the past superintendent
charged travel expenses to the District’s
American Express card for travel related to his
role as a board member for the Public School
Retirement System, while also receiving
reimbursement from this association for which
he performed duties. Thus, he was being paid
personally by the association for expenses
paid by the District. We noted a total of $3,906
in improper reimbursements. Of this amount,
$2,459 was repaid by the past superintendent
during March and April 2008. The remaining
amount of $1,447 is unpaid as of this date.
m. We noted that gift cards or certificates
were purchased with no indication of the
purpose of the purchase or the recipient
of the gift cards. We confirmed nine gift card
purchases with third parties with value ranging
from $25 to $200 for steaks, dining, and
shopping. This raises concerns since gift cards
are highly susceptible to fraud.
n. We noted a charge made to the District of
$66 for cell phone accessories where the
receipt indicated the customer was the spouse
of a District administrator. We confirmed with
Sprint sales personnel that the receipt which
we examined properly identified the actual user.
o. We noted that personnel sometimes rented
vehicles while attending an out of state
conference. In many of these cases we
question the need for car rentals, since most
conferences are held at hotels and shuttle
service is available to and from the airport.
Further, it appears that some of the car
rentals may have been for personal or
sightseeing purposes. We noted in a few
cases, limousine charges for transportation
between the airport and the hotel; in one
instance the charge was $120.
p. We noted several instances where tipping
appeared excessive; in one case we noted the
past superintendent tipped 49% on a $175.56
dining ticket. We also noted other charges
which included tips in excess of 20%.
Recommendation - We had previously
recommended and the District established travel
procedures effective March 2008. We now
recommend that the District closely monitor
travel expense to insure that they comply with
the newly established procedures. Further, we
recommend that the District update and monitor
the list of disallowed or unacceptable expenses
as unforeseen expenses occur in the future.
This updated policy or procedure should include
an expanded section on abuse as
recommended in Section 6 of this report.
1.2 Finding - We found that there was seldom,
if ever, receipts or detailed explanations
of credit card charges for four past and
present administrators. Each of these four
individuals would provide their account coding
on the credit card statement with no attachment
of receipts or the official “credit card receipt
form” used by the District. We sampled other
administrative staffs’ documentation and found
that the required forms were prepared and
submitted with the appropriate receipts and
source documents attached. We therefore,
presume that the District had controls in place
which required the production of a detailed
receipt and the preparation of the credit card
receipt form when charges were incurred, and
that certain top administrators ignored these
procedures.
Recommendation - We recommend that the
District monitor all credit card activity and
reimbursement requests to insure that proper
documentation is provided as to the purpose of
the expense and detail of all attendees and their
relationship to the District. Further, we
recommend that the District require that all
credit card activity is substantiated by a
detailed receipt and that it includes an
explanation of the purpose of the expenditure.
For any expenditure for which no
documentation is provided, the staff person
should be required to timely reimburse the
District for the unsubstantiated charge.
1.3 Finding - Upon review of credit card
statements and charges, we found numerous
charges for travel for the spouses of
administrators. Some, but not all of these
charges, were reimbursed by the
administrators. As of this date, $2,143 has yet
to be reimbursed.
Recommendation - We recommend that the
District seek reimbursement for all unpaid
charges as soon as possible and that the
District cease charging expenses for non-
district personnel on the District charge
card. Charges for spouses should be charged
to the individual’s credit card rather than that of
the District. Further, we recommend that the
District designate an individual or department to
handle all travel arrangements for the District.
This will insure that the District receives the
benefit of group travel discounts and that
charges for excessive or extravagant travel
does not occur.
1.4 Finding - We also investigated
reimbursement request and credit card charges
relating to board members. It was noted that no
board members ever had a District card nor had
any board member personally initiated charges
using a District card. Additionally, we noted that
it was not unusual for the District to charge and
pay for travel to meetings for board members
as well as spouses of such members.
Further, we noted that some meal charges for
spouses were included on the District credit
card when group dinners were paid for by an
attending administrator. As of this date, all
reimbursements for such expenses have been
received from school board members. Finally,
we noted that reimbursement by board
members were not always timely. In some
cases reimbursements to the District were
received over 13 months after the date of
travel. Four current and one past board member
had occurrences as follows:
Board Date Date
Member Charged Repaid Amount Purpose
#1 5/16/2005 6/6/2008 267.41 Air travel for spouse
#1 4/3/2006 6/6/2008 232.10 Air travel for spouse
#2 1/29/2004 4/26/2004 191.83 Air travel for spouse
#2 2/6/2006 6/21/2006 156.00 Air travel for spouse
#2 1/22/2007 2/12/2008 349.80 Air travel for spouse
#2 4/14/2007 3/25/2008 150.00 Meals and beverages
#2 4/15/2007 4/9/2008 109.48 Meals and beverages
#2 6/21/2007 6/6/2008 156.10 Duplicate
reimbursement
#3 1/31/2007 4/10/2007 288.80 Air travel for spouse
#3 4/14/2007 3/10/2008 105.00 Meals and beverages
#3 4/15/2007 3/17/2008 95.00 Meals and beverages
#3 4/15/2007 3/25/2008 59.40 Meals and beverages
#4 1/22/2007 2/12/2008 273.79 Air travel for
companion
#4 4/16/2007 5/5/2008 243.30 In-room charges
#4 4/14/2007 7/7/2008 81.01 Meals and beverages
#5 4/14/2007 3/25/2008 129.70 Meals and beverages
Member Charged Repaid Amount Purpose
#1 5/16/2005 6/6/2008 267.41 Air travel for spouse
#1 4/3/2006 6/6/2008 232.10 Air travel for spouse
#2 1/29/2004 4/26/2004 191.83 Air travel for spouse
#2 2/6/2006 6/21/2006 156.00 Air travel for spouse
#2 1/22/2007 2/12/2008 349.80 Air travel for spouse
#2 4/14/2007 3/25/2008 150.00 Meals and beverages
#2 4/15/2007 4/9/2008 109.48 Meals and beverages
#2 6/21/2007 6/6/2008 156.10 Duplicate
reimbursement
#3 1/31/2007 4/10/2007 288.80 Air travel for spouse
#3 4/14/2007 3/10/2008 105.00 Meals and beverages
#3 4/15/2007 3/17/2008 95.00 Meals and beverages
#3 4/15/2007 3/25/2008 59.40 Meals and beverages
#4 1/22/2007 2/12/2008 273.79 Air travel for
companion
#4 4/16/2007 5/5/2008 243.30 In-room charges
#4 4/14/2007 7/7/2008 81.01 Meals and beverages
#5 4/14/2007 3/25/2008 129.70 Meals and beverages
2. REIMBURSEMENTS
2.1 Finding - We noted that meal reimbursements were requested for expenditures that were outside the
allowable limits for breakfast, lunch and dinner as indicated on the official reimbursement request form.
2.2 Finding - We noted numerous reimbursement requests where no documentation or receipts were
attached. In one case, we noted that a past superintendent’s spouse was reimbursed for the
superintendent’s retirement dinner with only a handwritten note regarding the purpose attached to the
request. No receipts for the expenditures were attached. The undocumented reimbursement was $2,471.
It was reported to us that the actual cost of the event was covered by fees charged to attendees and by
event sponsors.
2.3 Finding - We found that District personnel requested reimbursements for out of district mileage that
appeared to be greater than the expected mileage for the purpose indicated on the reimbursement request.
Utilizing Map Quest, we tested mileage amounts reported for reimbursement. We noted that a top
administrator submitted numerous mileage reimbursements where we found variations in the expected
mileage versus the mileage submitted for reimbursement. We noted that of the 42 reimbursement requests
made by this administrator, only five mileage reimbursements were less than or equal to the expected
mileage for the travel destination. For the period December 2003 through February 2008, we calculated
that excessive miles of 4,174 were submitted for reimbursement; an overstatement of $1,854 in expense
for District related travel.
2.4 Finding - We noted that during the period October 1999 and August 2003, one top administrator
received $8,850 in travel advances. Travel advances are cash advances taken prior to the actual travel
date. The idea being, that upon return, receipts and unused funds should be returned to the District. Of
the $8,850, only $367 of cash was returned to the District. We were unable to find any receipts, travel
reports or other reconciliation of the advances to substantiate travel expenditures.
2.5 Finding - We noted that personnel were traveling “in-District” and submitting a reimbursement form
requesting the District’s standard reimbursement amount for breakfast, lunch and dinner. The Internal
Revenue Service allows reimbursement for travel expenses that are ordinary and necessary expenses for
traveling away from home for your job. Expenses that are lavish or extravagant or are for personal
purposes are not allowed. The Internal Revenue Service definition of traveling away from home is
“travel for duties requiring that you be away from the general area of your tax home for a period
substantially longer than an ordinary day’s work, and you need to get sleep or rest to meet the demands of
your work while away”. Thus one would not expect reimbursement of meals when personnel are merely
taking a day trip or attending a one day conference requiring no overnight stay.
Recommendation - We recommend that the travel procedures that were issued in March, 2008 be revised
to provide easy to interpret guidelines indicating when meals are eligible for District reimbursement. The
current policy, as written, allows for subjectivity when making this determination. For instance, an
excerpt from the procedures indicates “when employees are required to attend a meeting away from their
building site, meal costs may be reimbursable”.
- 6 -
Recommendation - We recommend that the District monitor requests for mileage reimbursement and test
the reasonableness of the distance traveled. Additionally, we recommend that all reimbursement requests
be scrutinized for completeness and correctness and that all required receipts are attached.
Reimbursements to District personnel should be adjusted for missing receipts, mileage overstatements
and unallowed expenses.
3. PURCHASING POLICY
3.1 Finding - As a result of interviews with central office personnel, we found that District personnel do
not consistently use the purchasing department for purchase of District supplies and capital assets.
3.2 Finding - We found that a past superintendent purchased two desktop computers for approximately
$8,000 each. These computers were liquid cooled computers and extremely powerful. This type of
computer is normally used in engineering or gaming environments. We strongly question the need for
these systems in a business environment where Excel and Word are the most commonly used systems.
Further, based on a discussion with the technology department, they were not aware of any computer
applications commonly used by an administrator which would have needed this type of computing power.
Recommendation - We recommend that the District implement a policy requiring that all purchases for
District capital assets with a value in excess of an amount pre-determined by the Board be purchased
through the District’s purchasing department. This will insure that the District receives the best possible
pricing, that items are not purchased which the District may already have in stock, and that sales tax
exemptions are utilized. Additionally, the District should implement an across the board policy that
personnel are prohibited from receiving any type of purchasing incentive that benefits them personally.
This should include monetary and non-monetary incentives.
4. USE OF DISTRICT ASSETS / PERSONNEL
4.1 Finding - We determined through interviews with various members of the District’s staff that prior
administrators utilized the grounds department to do periodic maintenance on personally owned lawn
equipment. One administrator routinely used the grounds department to perform spring and fall service.
Such services consisted of oil changes, blade sharpening, implement changes and minor maintenance.
Based on telephone interviews with a local John Deere service department, the charges for these services
would have cost from $125 to $175 each. A total of 12 services were reported as performed.
Accordingly, we estimate the total unreimbursed value of these service provided by the District to be
approximately $1,800.
4.2 Finding - We determined during our interviews that an administrator used the District’s box truck on
two separate occasions to move family members. This personal use of a District asset is not without costs
to the District. We estimate the fair value of these two uses to be approximately $245.
4.3 Finding - During analysis of specific invoices, we noted that the former superintendent charged the
costs of cellular telephones purchased for family members through the District cellular vendor. The costs
of the telephones were charged under telephone numbers assigned to current staff members who were
unaware of this activity. The cost of the phones was $571.00. These monies were recently repaid by the
- 7 -
administrator after it was pointed out that the telephones had been improperly charged to the District’s
account.
4.4 Finding - In another case an administrator requested that maintenance work relating to a door
knob/lock be done at his house. This job was performed during normal working hours and took less than
30 minutes to complete. We estimate the value of this service to be $45.
Comment - Through interviews we noted reports that building maintenance and grounds personnel
performed certain jobs for administrators at their personal homes. It is common among individuals with
skills in the maintenance and construction industries to conduct business in these same trades during their
off duty hours. We noted during our interviews with administrators and other staff that the District
employees worked part time during evenings and weekends doing various jobs for extra money. Based
on interviews with maintenance and grounds personnel and examination of limited written documentation
(cancelled checks and invoices) we believe the jobs performed for District administrators by District
personnel were completed on their own time using their own equipment. Further, that such work was
paid for directly by the administrators.
Comment - We have conducted extensive interviews in this area and believe that we have identified all
material instances of this type of abuse. However, as no paper trail exists to help identify this type of
abuse; we are relying on information obtained during interviews with various individuals.
Recommendation - We recommend that the District clearly communicate on a recurring basis that use of
any District assets or personnel for personal purposes is inappropriate and may be cause for employment
termination. Further, we recommend that the District request reimbursement for the first two findings
above.
5. CONTRUCTION PROJECTS
5.1 Finding - Board Policy DJC, as well as state statutes, requires bidding of all construction projects in
excess of $15,000. We performed a limited review of significant vendors used in construction and
maintenance projects. Based on this review and related interviews with District staff, we are confident
that project splitting occurred; whereby a construction or maintenance job was split into smaller projects
in order to avoid the state requirement of bidding such jobs. The projects, which violate the above
referenced policy, were directly managed and controlled by the prior superintendent. Such projects
included improvements to athletic fields and construction of storage and concession buildings. We also
noted other projects relating to landscaping, dirt work and parking lot coatings were not bid. In one case
payments made to a single contractor for several of these types of projects exceeded $250,000. Noted
problems included the following:
a. The projects were split into smaller projects in order to circumvent requirements to bid.
b. No advertisement for bids was made in most cases.
c. Prepayment for labor was made to some contractors prior to work being performed.
d. Jobs appeared to be run without a budget and cost limitations were solely decided and managed
by the superintendent.
e. In some cases, projects were begun prior to or without board approval.
f. Amounts disbursed were coded in the financial accounting system to General Fund accounts,
rather than to Capital Projects Fund accounts.
- 8 -
Recommendation - While state law does not require formal bid procedures on non-construction projects,
we do believe that best practices in a governmental environment dictate bidding of large procurement of
materials or services. We strongly recommend that policies be adopted which expand the requirements
for bidding beyond that of those required by state law.
6. BOARD POLICIES
6.1 Finding - Board policies DJF and DA both discuss the reporting of fraud by district personnel.
However, policy DJF states that such reporting should be made to the superintendent. This becomes
difficult if the superintendent is a suspected perpetrator.
Recommendation - We recommend that policy DJF be amended to include a reference to policy DA
regarding the reporting of fraud. Policy DA provides reporting alternatives other than the superintendent.
Recommendation - We believe that many of the cases noted in our previous comments relate to “abuse”
as defined earlier in this report. Abuse can be just as damaging monetarily to the District as fraud.
Accordingly, we recommend that the above two policies be amended and expanded to address “abuse” as
well as fraud.
7. OUT OF DISTRICT CONFERENCES
7.1 Finding - Based on interviews with District employees and other outside third parties, it is believed
that certain top administrators made trips under the guise of continuing education and professional
development, while a substantial part of the trip was for golf outings or other entertainment. In all cases,
we noted the seminar or development opportunities were legitimate, however, it has been reported by
multiple parties that certain administrators made it a habit of not attending parts of the seminar to play
golf or take part in other entertainment.
7.2 Finding - It was reported that one top administrator made it a habit of not attending any sessions at
one annual three day conference which he attended for at least the last four years. We have accumulated
the costs of these trips to be $1,221.
Recommendation - We recommend that the District develop and adopt a policy requiring that all
employees enrolled in professional development conferences attend and avail themselves of all reasonable
opportunities in seminar and work sessions. Further, we recommend that the District request
reimbursement for the lodging and meals expended under Finding 7.2.
8. PERSONNEL PRACTICES
8.1 Finding - We noted the hiring of a specific individual by an administrator was to fill a job that was
not properly posted. It appears that this individual may have been solely hired based on his personal
relationship with a prior superintendent and that the position was most likely created for the benefit of this
individual, not necessarily the District. A total of approximately $29,000 was paid to this individual over
a 4.5 year period.
- 9 -
8.2 Finding - We also noted various concerns in the District relating to policies and administration of
policies dealing with payroll/personnel matters. We noted that the District hired a consultant to review
personnel related issues and received a report from the consultant dated August 17, 2005.
Recommendation - We recommend that this report be reviewed and that all recommendations not already
implemented be implemented as soon as possible.
8.3 Finding - Based upon interviews with department managers and other personnel, we found that the
District has not consistently (from one department to the next) handled hourly employee’s regular
working hours and overtime hours. Additionally, we found that some non-exempt employees were paid
for lunch time while others were not.
8.4 Finding - We found that administrators had prescribed that employees would receive comp time or
some other type of remuneration, such as gift cards, for working extra hours.
Recommendation - We recommend that all compensation be processed through the payroll system and
included on the employee’s Form W-2. Additionally, we recommend that non-exempt employees
complete time cards so that the District can properly compensate the employee for regular and overtime
hours. Finally, department managers should convey to employees that all overtime must be pre-approved.
This will insure that an employee is properly compensated and enable the department manager to oversee
costs within their department.
Recommendation - We recommend that the District discontinue the use of gift cards. Use of gift cards as
appreciation for working extra hours is not an acceptable means of compensating employees.
8.5 Finding - Administrators are provided with a monthly stipend to cover in-district local travel. In
addition to receiving this monthly stipend, the past superintendent made charges using a District gas card
for local travel. This was beyond and outside of the District’s policies and practice. The total amount of
additional charges made to the gas card was $2,623. The past superintendent also represented to us and
supplied a schedule of travel related expenses which he had improperly charged the District in the amount
of $3,287. These charges occurred during June 2004 through June 2007. During our work, this
administrator voluntarily came forward and repaid these amounts in three checks during March and April
2008.
9. FINANCIAL STABILITY
9.1 Finding - During our work we noted that it appears the financial stability of the District has declined
in the last few years. We believe the root of this problem stems from recent superintendents either not
having a sufficient understanding of school finance and/or not giving adequate attention to long-term
projections. The possibility also exists that these administrators were over zealous in the undertaking,
budgeting and completion of projects that would be pleasing to the general populous (staff and patrons).
This may have occurred while not giving adequate consideration as to whether the District’s current and
long-term budgets could stand the added costs.
Based on a review of memorandums, interviews and financial schedules, we believe that even as recently
as January 2008 the chief financial officer attempted to warn the superintendent of her grave concerns,
- 10 -
however, based on interviews and other documentation the superintendent appeared unconcerned about
this matter.
Recommendation - We recommend that the Board consider establishing a finance committee made up of
three to five board members or patrons that will review in detail the budget, reserve projections, long-term
financial projections, capital project budgets and all other significant financial matters. This information
will be prepared by the chief financial officer and the superintendent with committee review as needed.
10. BOND PROCEEDS AND BUILDING PROJECTS
10.1 Finding - The District passed bond issues in 1997, 2000 and 2004 for the construction and
renovation of buildings. Based on a review of internal memorandums, interviews and financial schedules,
we noted that both the 1997 and 2000 building projects funded by the above bond issues exceeded
budgeted amounts by $5,867,640 and $7,651,049, respectively. These cost overruns were due to several
reasons. First, it appears that additional projects were added after the approval by the voters, thereby
increasing the scope of the work and the total costs. Second, a lack of budgetary control on planned
projects. Finally, a general attitude seemed to exist that whatever cost overruns occurred could be paid
for out of the operating budget or future bond issues. It appears that such cost overruns were substantially
paid for with the future bond issues. In other words, the 1997 building project overrun of $5,867,640 was
paid for primarily by the 2000 bond issue and the 2000 building project overrun of $7,651,049 was paid
for primarily by the 2004 bond issue. Some expenditures were paid for from the operating funds as noted
in Finding 10.2. These expenditures most likely contributed to the decline in the financial stability of the
District previously discussed in Finding 9.
Recommendation - We recommend that greater care be made in developing capital project budgets and
that increased oversight, control and restraint be exercised by administrators in charge. When projects are
planned and presented to the voters, the actual number of buildings and extent of renovations should be
well determined. Variation from these plans should only be made when modifications or budget cuts in
another area of the project assure that overall budgeted amounts can be maintained. Adding items from a
wish list after voter approval only insures that budgets will be overspent. Administrators must be able to
stand firm and say “no”. We recommend that a separate capital projects sub-fund be created for the
proceeds of each bond issue and that monies spent from this fund be for only those projects included in
the original plan.
10.2 Finding - During our work we noted numerous general ledger accounts with a coding extension of
“988”. Inquiries revealed that this coding extension was added to projects which were under the control
of the past superintendent. Most of these projects were for facility related expenditures. For the years we
analyzed, the total amount of these expenditures posted to the operating funds was as follows:
2.1 Finding - We noted that meal reimbursements were requested for expenditures that were outside the
allowable limits for breakfast, lunch and dinner as indicated on the official reimbursement request form.
2.2 Finding - We noted numerous reimbursement requests where no documentation or receipts were
attached. In one case, we noted that a past superintendent’s spouse was reimbursed for the
superintendent’s retirement dinner with only a handwritten note regarding the purpose attached to the
request. No receipts for the expenditures were attached. The undocumented reimbursement was $2,471.
It was reported to us that the actual cost of the event was covered by fees charged to attendees and by
event sponsors.
2.3 Finding - We found that District personnel requested reimbursements for out of district mileage that
appeared to be greater than the expected mileage for the purpose indicated on the reimbursement request.
Utilizing Map Quest, we tested mileage amounts reported for reimbursement. We noted that a top
administrator submitted numerous mileage reimbursements where we found variations in the expected
mileage versus the mileage submitted for reimbursement. We noted that of the 42 reimbursement requests
made by this administrator, only five mileage reimbursements were less than or equal to the expected
mileage for the travel destination. For the period December 2003 through February 2008, we calculated
that excessive miles of 4,174 were submitted for reimbursement; an overstatement of $1,854 in expense
for District related travel.
2.4 Finding - We noted that during the period October 1999 and August 2003, one top administrator
received $8,850 in travel advances. Travel advances are cash advances taken prior to the actual travel
date. The idea being, that upon return, receipts and unused funds should be returned to the District. Of
the $8,850, only $367 of cash was returned to the District. We were unable to find any receipts, travel
reports or other reconciliation of the advances to substantiate travel expenditures.
2.5 Finding - We noted that personnel were traveling “in-District” and submitting a reimbursement form
requesting the District’s standard reimbursement amount for breakfast, lunch and dinner. The Internal
Revenue Service allows reimbursement for travel expenses that are ordinary and necessary expenses for
traveling away from home for your job. Expenses that are lavish or extravagant or are for personal
purposes are not allowed. The Internal Revenue Service definition of traveling away from home is
“travel for duties requiring that you be away from the general area of your tax home for a period
substantially longer than an ordinary day’s work, and you need to get sleep or rest to meet the demands of
your work while away”. Thus one would not expect reimbursement of meals when personnel are merely
taking a day trip or attending a one day conference requiring no overnight stay.
Recommendation - We recommend that the travel procedures that were issued in March, 2008 be revised
to provide easy to interpret guidelines indicating when meals are eligible for District reimbursement. The
current policy, as written, allows for subjectivity when making this determination. For instance, an
excerpt from the procedures indicates “when employees are required to attend a meeting away from their
building site, meal costs may be reimbursable”.
- 6 -
Recommendation - We recommend that the District monitor requests for mileage reimbursement and test
the reasonableness of the distance traveled. Additionally, we recommend that all reimbursement requests
be scrutinized for completeness and correctness and that all required receipts are attached.
Reimbursements to District personnel should be adjusted for missing receipts, mileage overstatements
and unallowed expenses.
3. PURCHASING POLICY
3.1 Finding - As a result of interviews with central office personnel, we found that District personnel do
not consistently use the purchasing department for purchase of District supplies and capital assets.
3.2 Finding - We found that a past superintendent purchased two desktop computers for approximately
$8,000 each. These computers were liquid cooled computers and extremely powerful. This type of
computer is normally used in engineering or gaming environments. We strongly question the need for
these systems in a business environment where Excel and Word are the most commonly used systems.
Further, based on a discussion with the technology department, they were not aware of any computer
applications commonly used by an administrator which would have needed this type of computing power.
Recommendation - We recommend that the District implement a policy requiring that all purchases for
District capital assets with a value in excess of an amount pre-determined by the Board be purchased
through the District’s purchasing department. This will insure that the District receives the best possible
pricing, that items are not purchased which the District may already have in stock, and that sales tax
exemptions are utilized. Additionally, the District should implement an across the board policy that
personnel are prohibited from receiving any type of purchasing incentive that benefits them personally.
This should include monetary and non-monetary incentives.
4. USE OF DISTRICT ASSETS / PERSONNEL
4.1 Finding - We determined through interviews with various members of the District’s staff that prior
administrators utilized the grounds department to do periodic maintenance on personally owned lawn
equipment. One administrator routinely used the grounds department to perform spring and fall service.
Such services consisted of oil changes, blade sharpening, implement changes and minor maintenance.
Based on telephone interviews with a local John Deere service department, the charges for these services
would have cost from $125 to $175 each. A total of 12 services were reported as performed.
Accordingly, we estimate the total unreimbursed value of these service provided by the District to be
approximately $1,800.
4.2 Finding - We determined during our interviews that an administrator used the District’s box truck on
two separate occasions to move family members. This personal use of a District asset is not without costs
to the District. We estimate the fair value of these two uses to be approximately $245.
4.3 Finding - During analysis of specific invoices, we noted that the former superintendent charged the
costs of cellular telephones purchased for family members through the District cellular vendor. The costs
of the telephones were charged under telephone numbers assigned to current staff members who were
unaware of this activity. The cost of the phones was $571.00. These monies were recently repaid by the
- 7 -
administrator after it was pointed out that the telephones had been improperly charged to the District’s
account.
4.4 Finding - In another case an administrator requested that maintenance work relating to a door
knob/lock be done at his house. This job was performed during normal working hours and took less than
30 minutes to complete. We estimate the value of this service to be $45.
Comment - Through interviews we noted reports that building maintenance and grounds personnel
performed certain jobs for administrators at their personal homes. It is common among individuals with
skills in the maintenance and construction industries to conduct business in these same trades during their
off duty hours. We noted during our interviews with administrators and other staff that the District
employees worked part time during evenings and weekends doing various jobs for extra money. Based
on interviews with maintenance and grounds personnel and examination of limited written documentation
(cancelled checks and invoices) we believe the jobs performed for District administrators by District
personnel were completed on their own time using their own equipment. Further, that such work was
paid for directly by the administrators.
Comment - We have conducted extensive interviews in this area and believe that we have identified all
material instances of this type of abuse. However, as no paper trail exists to help identify this type of
abuse; we are relying on information obtained during interviews with various individuals.
Recommendation - We recommend that the District clearly communicate on a recurring basis that use of
any District assets or personnel for personal purposes is inappropriate and may be cause for employment
termination. Further, we recommend that the District request reimbursement for the first two findings
above.
5. CONTRUCTION PROJECTS
5.1 Finding - Board Policy DJC, as well as state statutes, requires bidding of all construction projects in
excess of $15,000. We performed a limited review of significant vendors used in construction and
maintenance projects. Based on this review and related interviews with District staff, we are confident
that project splitting occurred; whereby a construction or maintenance job was split into smaller projects
in order to avoid the state requirement of bidding such jobs. The projects, which violate the above
referenced policy, were directly managed and controlled by the prior superintendent. Such projects
included improvements to athletic fields and construction of storage and concession buildings. We also
noted other projects relating to landscaping, dirt work and parking lot coatings were not bid. In one case
payments made to a single contractor for several of these types of projects exceeded $250,000. Noted
problems included the following:
a. The projects were split into smaller projects in order to circumvent requirements to bid.
b. No advertisement for bids was made in most cases.
c. Prepayment for labor was made to some contractors prior to work being performed.
d. Jobs appeared to be run without a budget and cost limitations were solely decided and managed
by the superintendent.
e. In some cases, projects were begun prior to or without board approval.
f. Amounts disbursed were coded in the financial accounting system to General Fund accounts,
rather than to Capital Projects Fund accounts.
- 8 -
Recommendation - While state law does not require formal bid procedures on non-construction projects,
we do believe that best practices in a governmental environment dictate bidding of large procurement of
materials or services. We strongly recommend that policies be adopted which expand the requirements
for bidding beyond that of those required by state law.
6. BOARD POLICIES
6.1 Finding - Board policies DJF and DA both discuss the reporting of fraud by district personnel.
However, policy DJF states that such reporting should be made to the superintendent. This becomes
difficult if the superintendent is a suspected perpetrator.
Recommendation - We recommend that policy DJF be amended to include a reference to policy DA
regarding the reporting of fraud. Policy DA provides reporting alternatives other than the superintendent.
Recommendation - We believe that many of the cases noted in our previous comments relate to “abuse”
as defined earlier in this report. Abuse can be just as damaging monetarily to the District as fraud.
Accordingly, we recommend that the above two policies be amended and expanded to address “abuse” as
well as fraud.
7. OUT OF DISTRICT CONFERENCES
7.1 Finding - Based on interviews with District employees and other outside third parties, it is believed
that certain top administrators made trips under the guise of continuing education and professional
development, while a substantial part of the trip was for golf outings or other entertainment. In all cases,
we noted the seminar or development opportunities were legitimate, however, it has been reported by
multiple parties that certain administrators made it a habit of not attending parts of the seminar to play
golf or take part in other entertainment.
7.2 Finding - It was reported that one top administrator made it a habit of not attending any sessions at
one annual three day conference which he attended for at least the last four years. We have accumulated
the costs of these trips to be $1,221.
Recommendation - We recommend that the District develop and adopt a policy requiring that all
employees enrolled in professional development conferences attend and avail themselves of all reasonable
opportunities in seminar and work sessions. Further, we recommend that the District request
reimbursement for the lodging and meals expended under Finding 7.2.
8. PERSONNEL PRACTICES
8.1 Finding - We noted the hiring of a specific individual by an administrator was to fill a job that was
not properly posted. It appears that this individual may have been solely hired based on his personal
relationship with a prior superintendent and that the position was most likely created for the benefit of this
individual, not necessarily the District. A total of approximately $29,000 was paid to this individual over
a 4.5 year period.
- 9 -
8.2 Finding - We also noted various concerns in the District relating to policies and administration of
policies dealing with payroll/personnel matters. We noted that the District hired a consultant to review
personnel related issues and received a report from the consultant dated August 17, 2005.
Recommendation - We recommend that this report be reviewed and that all recommendations not already
implemented be implemented as soon as possible.
8.3 Finding - Based upon interviews with department managers and other personnel, we found that the
District has not consistently (from one department to the next) handled hourly employee’s regular
working hours and overtime hours. Additionally, we found that some non-exempt employees were paid
for lunch time while others were not.
8.4 Finding - We found that administrators had prescribed that employees would receive comp time or
some other type of remuneration, such as gift cards, for working extra hours.
Recommendation - We recommend that all compensation be processed through the payroll system and
included on the employee’s Form W-2. Additionally, we recommend that non-exempt employees
complete time cards so that the District can properly compensate the employee for regular and overtime
hours. Finally, department managers should convey to employees that all overtime must be pre-approved.
This will insure that an employee is properly compensated and enable the department manager to oversee
costs within their department.
Recommendation - We recommend that the District discontinue the use of gift cards. Use of gift cards as
appreciation for working extra hours is not an acceptable means of compensating employees.
8.5 Finding - Administrators are provided with a monthly stipend to cover in-district local travel. In
addition to receiving this monthly stipend, the past superintendent made charges using a District gas card
for local travel. This was beyond and outside of the District’s policies and practice. The total amount of
additional charges made to the gas card was $2,623. The past superintendent also represented to us and
supplied a schedule of travel related expenses which he had improperly charged the District in the amount
of $3,287. These charges occurred during June 2004 through June 2007. During our work, this
administrator voluntarily came forward and repaid these amounts in three checks during March and April
2008.
9. FINANCIAL STABILITY
9.1 Finding - During our work we noted that it appears the financial stability of the District has declined
in the last few years. We believe the root of this problem stems from recent superintendents either not
having a sufficient understanding of school finance and/or not giving adequate attention to long-term
projections. The possibility also exists that these administrators were over zealous in the undertaking,
budgeting and completion of projects that would be pleasing to the general populous (staff and patrons).
This may have occurred while not giving adequate consideration as to whether the District’s current and
long-term budgets could stand the added costs.
Based on a review of memorandums, interviews and financial schedules, we believe that even as recently
as January 2008 the chief financial officer attempted to warn the superintendent of her grave concerns,
- 10 -
however, based on interviews and other documentation the superintendent appeared unconcerned about
this matter.
Recommendation - We recommend that the Board consider establishing a finance committee made up of
three to five board members or patrons that will review in detail the budget, reserve projections, long-term
financial projections, capital project budgets and all other significant financial matters. This information
will be prepared by the chief financial officer and the superintendent with committee review as needed.
10. BOND PROCEEDS AND BUILDING PROJECTS
10.1 Finding - The District passed bond issues in 1997, 2000 and 2004 for the construction and
renovation of buildings. Based on a review of internal memorandums, interviews and financial schedules,
we noted that both the 1997 and 2000 building projects funded by the above bond issues exceeded
budgeted amounts by $5,867,640 and $7,651,049, respectively. These cost overruns were due to several
reasons. First, it appears that additional projects were added after the approval by the voters, thereby
increasing the scope of the work and the total costs. Second, a lack of budgetary control on planned
projects. Finally, a general attitude seemed to exist that whatever cost overruns occurred could be paid
for out of the operating budget or future bond issues. It appears that such cost overruns were substantially
paid for with the future bond issues. In other words, the 1997 building project overrun of $5,867,640 was
paid for primarily by the 2000 bond issue and the 2000 building project overrun of $7,651,049 was paid
for primarily by the 2004 bond issue. Some expenditures were paid for from the operating funds as noted
in Finding 10.2. These expenditures most likely contributed to the decline in the financial stability of the
District previously discussed in Finding 9.
Recommendation - We recommend that greater care be made in developing capital project budgets and
that increased oversight, control and restraint be exercised by administrators in charge. When projects are
planned and presented to the voters, the actual number of buildings and extent of renovations should be
well determined. Variation from these plans should only be made when modifications or budget cuts in
another area of the project assure that overall budgeted amounts can be maintained. Adding items from a
wish list after voter approval only insures that budgets will be overspent. Administrators must be able to
stand firm and say “no”. We recommend that a separate capital projects sub-fund be created for the
proceeds of each bond issue and that monies spent from this fund be for only those projects included in
the original plan.
10.2 Finding - During our work we noted numerous general ledger accounts with a coding extension of
“988”. Inquiries revealed that this coding extension was added to projects which were under the control
of the past superintendent. Most of these projects were for facility related expenditures. For the years we
analyzed, the total amount of these expenditures posted to the operating funds was as follows:
2005 - 2006 $4,024,777
2006 - 2007 $4,071,557
2007 - 2008 $1,689,793
Some of these expenditures appear to be for capital expenditures and improvements. The Department of
Elementary and Secondary Education requires that capital expenditures and improvements be paid out of
- 11 -
and coded to the Capital Project Fund. At this time we have not determined the amount of improper
coding which has been made to the operating funds; however, we believe it to be substantial.
Recommendation - We recommend that these expenditures be reviewed in detail to determine the amount
of mispostings that have occurred over the last few years. The results of this work will dictate future
actions. We anticipate that material adjustments will be required and that restatement of financial
statements and the Annual Secretary of the Board Report will be necessary.
11. SURPLUS PROPERTY
11.1 Finding - We noted that a past superintendent had purchased District owned office furniture at an
amount that may have been less than the fair value of the asset. Specifically, office furniture, consisting
of a roll top desk and a four drawer file were purchased by the District for $1,960 in December, 2001 and
then sold to the superintendent in May, 2006 for $196. Assuming this furniture depreciated over a 7 year
life, then 4.5 years would have been exhausted and the remaining value of approximately $761 should
have been collected. Based on this assumption, an underpayment of $565 ($761 - $196) occurred. State
statutes allow school districts to sell assets which are obsolete or no longer needed; such assets are
considered surplus property. We question whether this furniture was actually of no use to the District at
the time of sale.
Recommendation - We recommend that the District use an advertised bid process for selling obsolete or
surplus property in accordance with RSMo. 177.073(3).
12. CHARITABLE CONTRIBUTIONS
12.1 Finding - We noted that a past superintendent made contributions to charitable organizations using
District funds. One such case was for a donation and golf tournament entry fee. We do not question the
legitimate purpose of any charitable organization; however, we do question whether a public school
district has the authority to use District monies to fund charitable donations. Further, we believe it is
inappropriate for school funds to pay entry fees to such tournaments for school personnel.
Recommendation - We recommend that the District refrain from making charitable donations to
organizations not directly affiliated or sponsored by the District. Such legitimate organizations might be a
school foundation that directly and solely benefits the District.
13. CONSULTING AGREEMENT
13.1 Finding - We noted from review of payroll and vendor records that the District paid a consulting fee
of $90,764 to a past superintendent. The consulting agreement covered a period of time from July 1,
2007 through December 31, 2007. Based on review of records and interviews, we were unable to
document any benefits received from this consulting agreement.
Recommendation - We recommend that careful consideration be given before obligating the District to
any consulting agreements. A needs analysis stating why the consultant is needed and the expected
outcomes of such work should be clearly delineated in the agreement. Monitoring of progress should be
- 12 -
overseen by administration and benchmarks should be reached prior to approval of payment to the
consultant.
14. REAL ESTATE COMMISSIONS
14.1 Finding - We reviewed a real estate contract which stated that the District’s (buyer’s) agent was to
receive at closing a commission of 1.5%. This amount was paid at closing by the closing agent. We also
noted an e-mail sent by the past superintendent directing an additional payment of 1.5% to be paid to the
District’s agent by the District after closing. This payment was made as directed. We did not see any
contract or agreement to support this payment. We question the past superintendent’s authority to
unilaterally authorize such a payment related to a major real estate transaction.
Recommendation - We recommend that all payments related to real estate be made according to
contractual agreements and that the District consults with legal counsel regarding this payment.
OTHER COMMENTS
We would like to make a few comments in closing our report.
From the first day that we discussed issues with the President of the Board through the drafting of this
report, new issues have continued to arise and individuals have come forward to provide information. We
have encountered many difficulties in several areas that we researched due to the limited documentation
available. Data from third parties continues to trickle in. We will continue to update the Board as, and if
any, new findings are noted.
We have worked with and interviewed numerous individuals within the administration of the District.
We are extremely impressed with the attitude and professionalism displayed by a strong majority of
individuals. Most all of these individuals demonstrated a strong desire to do the best job they can and
exhibited a strong concern for what is best for the students. We believe that these individuals will insure
that the District will continue to achieve high standards in years to come.
We would like to express our thanks to the individuals within the District’s accounting department that
assisted us in researching and locating documents, contacting third parties and summarizing data. They
willingly took on these additional burdens, while continuing to do their normal jobs.
We would like to speak to a fundamental cultural change that we observed throughout this process. At
the beginning, more than three months ago, people were fearful to speak to us or openly discuss the
problems that they may have been aware of. In most cases, someone within the District, other than the
perpetrator, was aware of the findings outlined above. However, it was commonly known that if you
questioned the actions of certain top administrators, your job and/or standing in the District was at
significant risk. Over the last two months we have noticed a substantial change in this attitude. No
longer are staff fearful. They are beginning to recognize that the culture is changing and that the District
is going to do things the correct way. Speaking up and voicing one’s opinion is a positive move towards
improving the administrative and educational environment within the District.
- 13 -
CLOSING COMMENTS
Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts that may exist and was not
designed to detect employee embezzlement or other fraudulent activities involving bank accounts,
accounts receivable or other assets susceptible to fraud. However, we have informed you of any material
errors, abuse, and any fraud or illegal acts that came to our attention. In addition, we had no
responsibility to identify significant deficiencies or material weaknesses in your internal control as a part
of this engagement, however, we have communicated any such deficiencies that we became aware of
during our performance of agreed-upon procedures.
We did not perform an audit nor were we engaged to perform an audit, the objective of which would be
the expression of an opinion on the District’s financial statements or any elements, accounts or items
thereof. Audit standards are very general and broad in scope. Accordingly, an audit would have required
extensive work in areas that were not considered to be a concern. However, agreed-upon procedures
allow resources and efforts to be focused on those areas of concern such as credit cards and other areas
upon which we received information from third parties. Accordingly, we have not expressed an audit
opinion.
This report is intended solely for the use of the District’s officials and should not be used by those who
have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their
purposes.
July 7, 2008
2006 - 2007 $4,071,557
2007 - 2008 $1,689,793
Some of these expenditures appear to be for capital expenditures and improvements. The Department of
Elementary and Secondary Education requires that capital expenditures and improvements be paid out of
- 11 -
and coded to the Capital Project Fund. At this time we have not determined the amount of improper
coding which has been made to the operating funds; however, we believe it to be substantial.
Recommendation - We recommend that these expenditures be reviewed in detail to determine the amount
of mispostings that have occurred over the last few years. The results of this work will dictate future
actions. We anticipate that material adjustments will be required and that restatement of financial
statements and the Annual Secretary of the Board Report will be necessary.
11. SURPLUS PROPERTY
11.1 Finding - We noted that a past superintendent had purchased District owned office furniture at an
amount that may have been less than the fair value of the asset. Specifically, office furniture, consisting
of a roll top desk and a four drawer file were purchased by the District for $1,960 in December, 2001 and
then sold to the superintendent in May, 2006 for $196. Assuming this furniture depreciated over a 7 year
life, then 4.5 years would have been exhausted and the remaining value of approximately $761 should
have been collected. Based on this assumption, an underpayment of $565 ($761 - $196) occurred. State
statutes allow school districts to sell assets which are obsolete or no longer needed; such assets are
considered surplus property. We question whether this furniture was actually of no use to the District at
the time of sale.
Recommendation - We recommend that the District use an advertised bid process for selling obsolete or
surplus property in accordance with RSMo. 177.073(3).
12. CHARITABLE CONTRIBUTIONS
12.1 Finding - We noted that a past superintendent made contributions to charitable organizations using
District funds. One such case was for a donation and golf tournament entry fee. We do not question the
legitimate purpose of any charitable organization; however, we do question whether a public school
district has the authority to use District monies to fund charitable donations. Further, we believe it is
inappropriate for school funds to pay entry fees to such tournaments for school personnel.
Recommendation - We recommend that the District refrain from making charitable donations to
organizations not directly affiliated or sponsored by the District. Such legitimate organizations might be a
school foundation that directly and solely benefits the District.
13. CONSULTING AGREEMENT
13.1 Finding - We noted from review of payroll and vendor records that the District paid a consulting fee
of $90,764 to a past superintendent. The consulting agreement covered a period of time from July 1,
2007 through December 31, 2007. Based on review of records and interviews, we were unable to
document any benefits received from this consulting agreement.
Recommendation - We recommend that careful consideration be given before obligating the District to
any consulting agreements. A needs analysis stating why the consultant is needed and the expected
outcomes of such work should be clearly delineated in the agreement. Monitoring of progress should be
- 12 -
overseen by administration and benchmarks should be reached prior to approval of payment to the
consultant.
14. REAL ESTATE COMMISSIONS
14.1 Finding - We reviewed a real estate contract which stated that the District’s (buyer’s) agent was to
receive at closing a commission of 1.5%. This amount was paid at closing by the closing agent. We also
noted an e-mail sent by the past superintendent directing an additional payment of 1.5% to be paid to the
District’s agent by the District after closing. This payment was made as directed. We did not see any
contract or agreement to support this payment. We question the past superintendent’s authority to
unilaterally authorize such a payment related to a major real estate transaction.
Recommendation - We recommend that all payments related to real estate be made according to
contractual agreements and that the District consults with legal counsel regarding this payment.
OTHER COMMENTS
We would like to make a few comments in closing our report.
From the first day that we discussed issues with the President of the Board through the drafting of this
report, new issues have continued to arise and individuals have come forward to provide information. We
have encountered many difficulties in several areas that we researched due to the limited documentation
available. Data from third parties continues to trickle in. We will continue to update the Board as, and if
any, new findings are noted.
We have worked with and interviewed numerous individuals within the administration of the District.
We are extremely impressed with the attitude and professionalism displayed by a strong majority of
individuals. Most all of these individuals demonstrated a strong desire to do the best job they can and
exhibited a strong concern for what is best for the students. We believe that these individuals will insure
that the District will continue to achieve high standards in years to come.
We would like to express our thanks to the individuals within the District’s accounting department that
assisted us in researching and locating documents, contacting third parties and summarizing data. They
willingly took on these additional burdens, while continuing to do their normal jobs.
We would like to speak to a fundamental cultural change that we observed throughout this process. At
the beginning, more than three months ago, people were fearful to speak to us or openly discuss the
problems that they may have been aware of. In most cases, someone within the District, other than the
perpetrator, was aware of the findings outlined above. However, it was commonly known that if you
questioned the actions of certain top administrators, your job and/or standing in the District was at
significant risk. Over the last two months we have noticed a substantial change in this attitude. No
longer are staff fearful. They are beginning to recognize that the culture is changing and that the District
is going to do things the correct way. Speaking up and voicing one’s opinion is a positive move towards
improving the administrative and educational environment within the District.
- 13 -
CLOSING COMMENTS
Our engagement cannot be relied upon to disclose errors, fraud, or illegal acts that may exist and was not
designed to detect employee embezzlement or other fraudulent activities involving bank accounts,
accounts receivable or other assets susceptible to fraud. However, we have informed you of any material
errors, abuse, and any fraud or illegal acts that came to our attention. In addition, we had no
responsibility to identify significant deficiencies or material weaknesses in your internal control as a part
of this engagement, however, we have communicated any such deficiencies that we became aware of
during our performance of agreed-upon procedures.
We did not perform an audit nor were we engaged to perform an audit, the objective of which would be
the expression of an opinion on the District’s financial statements or any elements, accounts or items
thereof. Audit standards are very general and broad in scope. Accordingly, an audit would have required
extensive work in areas that were not considered to be a concern. However, agreed-upon procedures
allow resources and efforts to be focused on those areas of concern such as credit cards and other areas
upon which we received information from third parties. Accordingly, we have not expressed an audit
opinion.
This report is intended solely for the use of the District’s officials and should not be used by those who
have not agreed to the procedures and taken responsibility for the sufficiency of the procedures for their
purposes.
July 7, 2008
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| Audit |