Pleasant Hope schools audit reveals procedural problems

A state audit of the Pleasant Hope R-VI School District reveals a lengthy list of procedural issues ranging from improper bidding processes to a failure to correctly levy taxes.

Missouri Auditor Susan Montee's office presented results of the audit publicly Thursday night at the district's middle school. Montee conducted the audit after receiving 340 signatures form registered voters; a minimum of 309 were required.

In the 2006-07 budget year, the district overspent, largely because of the construction of a $400,000 sports complex, according to the audit. The situation caused the district to approach the Department of Elementary and Secondary Education's "financially stressed" classification.

While its financial condition improved during the 2007-08 school year, the district obtained a $250,000 loan, approved carrying some payroll payments into the next year, and did not transfer money from the General Fund to the Special Revenue Fund each month as required by state law.

Tax rates were levied incorrectly during the 2007 tax year, resulting in $107,000 being owed to the Capital Projects Fund from the district's General Fund. The school board also amended its budgets after actual disbursements exceeded original budgeted amounts. Budgets prepared by the district were not accurate or complete, making it "difficult for the district to effectively monitor its financial condition," the audit said.

The new sports complex was a trouble spot for the district. The audit said the district did not prepare comprehensive formal plans or adequate cost estimates, did not monitor overall costs, and did not retain adequate documentation of the bids or the selection process for awarding project bids. The district also temporarily hired three employees of a local contractor to avoid prevailing wages, according to the audit report.

Other noted issues included:

• A district board member was awarded a no-bid contract for a bus route prior to resigning from the board, raising questions of nepotism and conflict of interest;

• The district does not have formal written bidding policies, and bids were not always solicited or documented;

• Bonds were sold through a negotiated sale, instead of a competitive sale, and the board did not select an underwriter or bond counsel competitively;

• There are no formal policies or procedures for the use of credit cards or regarding employees' additional compensation;

• Payroll records are not adequately maintained, and some employees had negative leave balances at the end of the school year. District policy also allows employees to be paid for unused sick leave at the end of each school year, as well as when they leave the job or retire;

• There are no policies for handling meal collections, and controls over other district receipts, petty cash, change funds and vending machine proceeds need improvement; and

• The district did not document how some issues that were discussed and voted on in closed meetings were allowable under Sunshine Law, nor did it sufficiently keep board meeting minutes. District business also was occasionally conducted outside of regular meetings.[[In-content Ad]]