It’s a good thing that a recent internal audit of the Caddo School Board’s Capital Construction and Projects Department (CCPD) surfaced this August—versus last year this time when the School Board was pushing the renewal of a school tax bond. This report should cause some concern by the School Board, which after the last Board election has operated as a rubber stamp for Superintendent Goree. However many skeptics doubt that the 2014 Bond defeat has changed much of the tax and spend mentality on Midway. [[2015 Internal Audit from CPSB]]
At the time of the audit, the CCPD had 138 special projects for the 2014/2015 fiscal year; these projects are typically not approved by the Board. A review of 20 of these revealed serious problems: no documentation as to who requested or approved the project; no contracts, or proof of insurance or performance bonds in the files; only 2 had quotes and only 5 had design costs allocated to the projects. The auditor noted that the Louisiana Public Bid Law only applies to projects costing $150,000 or more—and thus the Board is not required to apply the stringent requirements to these “special projects.”
The Administration’s response said that special projects files are not required to indicate who requested the project—be that Board members, the Administration or the Maintenance Department Emergency Repairs office. The Administration also said that most of these needed to be fast tracked and performed while school was not in session; often the projects were started and completed in a short time frame. Evidently the projects are authorized without any bid or quotes and insurance certificates were only retained for “the typical contractors” who provided these services.
The audit raised substantial questions on 17—yes seventeen—special projects for Lakeshore school that was renovated when the school was “repurposed” from an elementary school to a middle school. The total spent was over $2 million dollars—even though there was no documentation that the Administration received Board approval for this major capitol project. Eight of these projects were related to the locker room where $755,000 was spent in renovation. Twelve (12) of the seventeen (17) project files were reviewed; only one had a quote. None of these had contracts, proof of insurance or performance bonds.
Another project that caused concern to the auditor was the total cost to move the Attendance Department to Central Elementary school. A memo to the Board dated July 29, 2014 indicated that the cost would be less than $143,000. The total cost was approximately $550,000—spread out over 9 special projects. State law and Board policy prohibit the division or separation of public work projects into smaller projects when the division or separation has the effect of avoiding the requirement of satisfying the public bid law. Obviously this was not a factor for the CCPD for the Lakeshore school renovation or renovation for Central Elementary.
The audit also reported that the 2014/2105 fiscal year budget had approximately $20 million in capital projects. As of March of this year, this budgeted amount had been exceeded by “about $1.5 million”. In reviewing the expenditures from the capital projects account, the auditor discovered that $113,812 was disbursed from the capital projects fund for textbooks and instructional equipment. The bond proposition that funded this account was dedicated for “renovation, repair and improvement.” The Administration’s response was not encouraging to say the least– noting that “the distribution of funds for textbooks and other instructional equipment has been in place prior to the year 2000. I do not know why text books and instructional equipment are funded by the Capitol Project funds.”
Other “highlights” of the audit were equally disturbing. Thirteen (13) Board approved projects were reviewed to determine if properly bid and documented. Insurance certificates for thirteen (13) of the contractors did not have the School Board named as an additional insured; additionally they did not have a waiver of subrogation. The Board approved $200,000 for Parish-wide painting; at the of the audit, over $638,000 had been spent to paint the Transformation Schools without any documentation in the file. Additionally, over $700,000 had been spent for parish-wide t-building relocation when only $400,000 had been approved by the Board.
Lastly, the audit addressed the purchase requisitions processed for capital projects. As of March 9, 2015 there were over 200 purchase requisitions created after the invoice had been presented; these requisitions totaled $5.6 million. Obviously this procedure not only resulted in an inefficient use of time and resources but also reflected a major weakness in the internal control structure. The auditor’s recommendation was not surprising to those familiar with Accounting 101—that being to create a requisition once a contract was awarded or a quote accepted. This process would ensure proper approval and encumbrance of funds.
To those who have closely scrutinized spending by the School Board in years past, the audit results were disappointing but unfortunately not surprising. Perhaps more disappointing were the responses by the Administration which were non-committal at best—and at worse just bureaucratic whitewash. If anyone is expecting major corrective action by the School Board on this audit, the best suggestion is to not hold your breath.