After a nearly 18-month auditing process, Missouri State Auditor Tom Schweich's office has rated the school district's overall performance as "fair," the second-worst rating given in state audits. The fair rating stipulates that the school district needs to improve operations in several areas, and the audit report contains several issues.
The audit identifies weaknesses in controls and procedures and concerns with overall management and financial practices. The audit was initiated after Springfield citizens circulated a petition by gathering 5,202 signatures of the city's registered voters, according to a news release from the auditor's office.
The audit noted "significant concerns" with the district's efforts to sell the former Hickory Hills school and property to developer Paul Larino for his planned 46-acre Hickory Hills Marketplace.
SPS finalized the sale of the property at the northeast corner of Chestnut Expressway and Highway 65 in December 2010 for $4.45 million. The initial payment of $2.5 million was scheduled to be paid on or before June 15, 2011, with a second payment of $1 million due by Dec. 31, 2015, and a final payment of $950,000 to be paid by Dec. 31, 2017. Larino missed the first payment and was given until Oct. 14, 2011, to make it, under the condition that the developer pay SPS $50,000. The second deadline, however, also was missed, and the SPS Board of Education voted to extend the deadline another six months provided Larino make monthly, nonrefundable payments of $12,500 and demolish the former Hickory Hills school, according to
Springfield Business Journal archives.
The audit noted that as of Dec. 31, SPS had received only $97,500 from the developer. In a written response to the audit, SPS said the Hickory Hills property "has proved difficult to sell due to the fact that it is suitable only for commercial and retail development, but such development will require extensive improvements and relocation of the public roads in the area, as well as other infrastructure improvements." Minus 16 acres
planned for a Menards home improvement store, the property falls within a Community Improvement District.
The auditor also docked the school district for paying $258,060 more than the appraised value for land for the new Hickory Hills school without documenting its reasons.
Other issues noted in the audit:
- The district's self-funded medical plan is in poor financial condition, because according to the audit, the district didn't properly fund and monitor its operating costs. The audit noted that the school board approved changes to the medical and dental plans, effective Jan. 1, 2011, improving the financial condition of the health benefit trust fund.
- The district needs to improve its handling of meal, student activity, athletic event and concession receipts. The audit noted there is little assurance monies have been handled and accounted for properly because they aren't maintained or secured adequately. In a written response to these issues, the school board said it would be working toward improvement via a number of actions involving communication and clarification.
- The district was reprimanded for selling bonds and certificates through a negotiated sale, rather than a competitive sale, and using the same underwriter since 1991.
- During a two-year time frame, the district paid $596,104 for legal services without a written agreement in place, and according to the audit, has used the same attorney for 25 years without periodically sending out requests for proposal.
- Personnel records for some employees weren't completed, and the audit noted that payroll duties are not adequately segregated. It also noted the district did not have in place appropriate procedures to ensure substitutes are paid properly. According to the audit, the district had intiaited a process to reobtain I-9 forms for all employees by January 2012 for review.
"This required a huge investment of our staff time but in the end it will result in improvements to our district which will benefit our stakeholders," Superintendent Norm Ridder said in a separate news release.
SPS Board of Education President Tom Prater echoed a similar sentiment.
"As a school board, we take our responsibility for oversight very seriously and are pleased that this audit report assures our community that there has been no fraud, theft or embezzlement of public funds," he said in the release.
The release noted the school district would be weighing the costs and benefits of each of the auditor's recommendations.
"This report contains many good suggestions for ways we might improve," Prater said in the release. "Many of them have a fiscal impact and we will need to take that into consideration as we enter into our budget development process for 2012-13."[[In-content Ad]]
