Performance audit, Queen Creek Unified School District : a report to the Arizona Legislature

              Performance Audit
Queen Creek
Unified School District
Division of School Audits
Debra K. Davenport
Auditor General
October • 2012
Report No. 12-13
A REPORT
TO THE
ARIZONA LEGISLATURE
The Auditor General is appointed by the Joint Legislative Audit Committee, a bipartisan committee composed of five senators and
five representatives. Her mission is to provide independent and impartial information and specific recommendations to improve the
operations of state and local government entities. To this end, she provides financial audits and accounting services to the State and
political subdivisions, investigates possible misuse of public monies, and conducts performance audits of school districts, state
agencies, and the programs they administer.
The Joint Legislative Audit Committee
Audit Staff
Ross Ehrick, Director
Mike Quinlan, Manager and Contact Person
Briton Baxter, Team Leader
Christine Medrano
Samantha Goldstein
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
2910 N. 44th Street, Suite 410 • Phoenix, AZ 85018 • (602) 553-0333
Additionally, many of our reports can be found in electronic format at:
www.azauditor.gov
Representative Carl Seel, Chair
Representative Tom Chabin
Representative Justin Olson
Representative David Stevens
Representative Anna Tovar
Representative Andy Tobin (ex officio)
Senator Rick Murphy, Vice Chair
Senator Andy Biggs
Senator Rich Crandall
Senator Linda Lopez
Senator David Lujan
Senator Steve Pierce (ex officio)
2910 NORTH 44th STREET • SUITE 410 • PHOENIX, ARIZONA 85018 • (602) 553-0333 • FAX (602) 553-0051
MELANIE M. CHESNEY
DEPUTY AUDITOR GENERAL
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
October 30, 2012
Members of the Arizona Legislature
The Honorable Janice K. Brewer, Governor
Governing Board
Queen Creek Unified School District
Mr. Tom Lindsey, Superintendent
Queen Creek Unified School District
Transmitted herewith is a report of the Auditor General, A Performance Audit of the Queen
Creek Unified School District, conducted pursuant to A.R.S. §41-1279.03. I am also transmitting
within this report a copy of the Report Highlights for this audit to provide a quick summary for
your convenience.
As outlined in its response, the District agrees with all of the findings and recommendations.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on October 31, 2012.
Sincerely,
Debbie Davenport
Auditor General
Student achievement similar to peer
districts’—In fiscal year 2010, Queen
Creek USD’s student AIMS scores were
similar to peer districts’ and much higher
than state averages. Additionally, six of the
District’s seven schools met “Adequate
Yearly Progress” for the federal No Child
Left Behind Act, and its 92-percent high
school graduation rate matched the peer
district average, and was much higher
than the 78-percent state average.
District operated efficiently overall—In
fiscal year 2010, Queen Creek USD
operated efficiently overall with similar or
lower costs in all operational areas other
than transportation. The District’s
administrative costs were much lower
than peer districts’, its plant operations
costs were similar, and its food service
program operated efficiently with a cost
per meal that was 9 percent lower than
peer districts’. However, the District’s
transportation costs were higher per pupil
and per mile than peer districts’ in part
because its routes were likely inefficient,
which contributed to its need to subsidize
the program with $270,000 that otherwise
potentially could have been spent in the
classroom.
Similar student achievement and efficient operations overall
At $566, Queen Creek USD’s fiscal year
2010 per-pupil administrative costs were
$182, or 24 percent, lower than peer
districts’. The lower costs were primarily
the result of the District’s employing fewer
administrators and paying some positions
lower salaries. However, the District needs
to strengthen controls over its accounting
and student information systems.
Fewer administrative employees and
some with lower salaries—Queen Creek
USD employed fewer administrative
employees. The lower staffing was
primarily due to its employing fewer
administrative support positions at school
sites, including secretaries and
receptionists, and fewer support staff
positions in its business office, such as
clerks and bookkeepers. Further, the
District also employed fewer administrative
technology employees to maintain its
computer network and information
systems. Additionally, Queen Creek USD’s
superintendent was paid slightly less and
its assistant principals were paid much
less despite generally having a similar
number of years of experience as audited
peer districts’ administrators.
Much lower administrative costs, but some improvements
needed
REPORT
HIGHLIGHTS
PERFORMANCE AUDIT
Our Conclusion
In fiscal year 2010, Queen
Creek Unified School
District’s student
achievement was similar
to peer districts’ and much
higher than state
averages, and it operated
efficiently overall with most
costs similar to or lower
than peer districts’. The
District’s administrative
costs were much lower
than peer districts’, but
controls over its
accounting and student
information systems
should be improved. The
District’s plant operations
costs were similar to peer
districts’, and its food
service program operated
efficiently. However, the
District’s transportation
costs were higher than
peer districts’, which
contributed to its
subsidizing its program by
$270,000. Further, Queen
Creek USD over-reported
its fiscal year 2011 route
miles, resulting in its being
overfunded by $63,000.
2012
October • Report No. 12-13
Queen Creek
Unified School District
Operational
Area
Queen Creek
USD
Peer Group
Average
Administration $566 $748
Plant operations 821 874
Food service 293 322
Transportation 427 396
Per-Pupil Expenditures by
Operational Area
Fiscal Year 2010
Percentage of Students Who Met or
Exceeded State Standards (AIMS)
Fiscal Year 2010
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Math Reading Writing
Queen Creek USD Peer Group State-wide
Compared to peer districts’, Queen Creek USD’s
fiscal year 2010 transportation costs were 6 percent
higher per mile and 8 percent higher per pupil.
Additionally, the District over-reported its mileage for
state funding purposes in fiscal year 2011, resulting
in overfunding.
Higher costs led to subsidy—The District’s higher
transportation costs contributed to its spending
$270,000 more on its transportation program than it
received in state transportation funding, meaning
the District had to subsidize its transportation
program with monies that otherwise potentially
could have been spent in the classroom. Its costs
were higher primarily because its bus routes were
likely inefficient and it did not use performance
measures to help it evaluate and monitor the
efficiency of its program and proactively identify
operational issues. The District did not maintain
records supporting the number of bus riders
reported for fiscal year 2010, so auditors reviewed
bus route efficiency for fiscal year 2011 and found
that routes were not efficient. The District’s routes
filled buses to only 64 percent of bus capacity, on
average, and many routes filled buses to less than
50 percent of bus capacity. Districts with efficient
bus routes will typically operate routes that fill buses
to 75 percent or more of bus capacity. The District
had a similar number of students in fiscal years
2010 and 2011, and district officials stated that
routes did not change substantially between those
years. Therefore, it appears likely that the District’s
routes were also inefficient in fiscal year 2010 and,
as such, may help explain the District’s high costs.
Overstated mileage resulted in $63,000 of
overfunding—Queen Creek USD over-reported its
fiscal year 2011 route miles by 15,000 miles and
was overfunded by $63,000 in state transportation
funding. The District did not maintain detailed
records from previous years, so it could not be
determined with certainty whether the District was
overfunded in prior years also.
Recommendations—The District should:
••Closely review its bus routes to determine if
changes can be made to improve efficiency.
••Develop and monitor performance measures
such as cost per mile, cost per rider, and bus
capacity usage.
••Accurately calculate and report the miles driven
for state funding purposes.
••Contact the Arizona Department of Education
to correct its transportation funding and
expenditure budget.
••Maintain records supporting its reported
transportation miles and riders.
Improvements needed to lower transportation costs and accurately report
information
REPORT
HIGHLIGHTS
PERFORMANCE AUDIT
October 2012
A copy of the full report is available at:
www.azauditor.gov
Contact person:
Mike Quinlan (602) 553-0333
Computer controls need strengthening—Queen
Creek USD needs to improve controls over user
access to its accounting and student information
systems. Six district employees have more access
to the accounting system than is needed to perform
their job duties. Although no improper transactions
were detected in the items we tested, access
beyond that which is necessary to perform job
functions exposes the District to an increased risk of
fraud and errors. The District also needs to review
access to its student information system to help
ensure compliance with federal laws such as the
Family Educational Rights and Privacy Act. Fifty-eight
employees had access to student health
records, while only a few of those employees
appeared to need this access.
Recommendation—The District should limit
employees’ access to only those accounting
system functions and student information needed to
perform their work.
Queen Creek
Unified School District
TABLE OF CONTENTS
continued
page i
Office of the Auditor General
1
Student achievement similar to peer districts’ and much higher than state averages 1
District operated efficiently overall with most costs similar to or lower than peer
districts’, but can improve 2
Finding 1: Much lower administrative costs, but some improvements
3
Fewer administrative employees and lower salaries for some administrators 3
District should strengthen controls over access to accounting and student
information systems 3
4
Finding 2: Improvements needed to lower transportation costs and
5
5
District overstated mileage, which resulted in $63,000 of overfunding 6
7
9
9
9
Appendix
Objectives, Scope, and Methodology a-1
TABLE OF CONTENTS
concluded
page ii
State of Arizona
District Response
Table
1 Comparison of Per-Pupil Expenditures by Operational Area
2
Figure
1
Fiscal Year 2010
(Unaudited)
DISTRICT OVERVIEW
page 1
Office of the Auditor General
Queen Creek Unified School District is located about 40 miles southeast of Phoenix in Maricopa
County. In fiscal year 2010, the District served 5,250 students at its seven schools: four kindergarten-through-
4th-grade elementary schools, one 5th-through-6th-grade middle school, one 7th-through-
8th-grade junior high school, and one 9th-through-12th-grade high school. The District’s student
population grew quickly between fiscal years 2005 and 2010, increasing 76 percent and the District
opened two new schools.
In fiscal year 2010, Queen Creek USD’s student achievement was similar to its peer districts’ and
much higher than state averages.1 Overall, the District operated efficiently, with most costs similar to
or lower than peer districts’, but auditors noted some areas for improvement, as discussed later in
this report.
Student achievement similar to peer districts’ and much higher
than state averages
In fiscal year 2010, 72 percent of the District’s students
met or exceeded state standards in math, 86 percent in
reading, and 88 percent in writing. As shown in Figure 1,
these scores were similar to the peer districts’ averages
and much higher than state averages. Further, six of the
District’s seven schools met “Adequate Yearly Progress”
(AYP) for the federal No Child Left Behind Act. Despite
the District’s overall high passing rates on Arizona’s
Instrument to Measure Standards (AIMS), Queen Creek
USD’s middle school failed to meet AYP because some
students did not demonstrate sufficient academic
progress. The District’s 92-percent graduation rate in
fiscal year 2010 was the same as the peer group’s
92-percent average and much higher than the State’s
78-percent average.
1 Auditors developed two peer groups for comparative purposes. See page a-1 of this report’s Appendix for further explanation of the peer
groups.
Figure 1: Percentage of Students Who Met or
Exceeded State Standards (AIMS)
Fiscal Year 2010
(Unaudited)
Source: Auditor General staff analysis of fiscal year 2010 test results
on Arizona’s Instrument to Measure Standards (AIMS).
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Math Reading Writing
Queen Creek
USD
Peer Group
State-wide
page 2
State of Arizona
District operated efficiently
overall with most costs similar to
or lower than peer districts’, but
can improve
As shown in Table 1 and based on auditors’
review of various performance measures, in
fiscal year 2010, Queen Creek USD operated
efficiently overall with similar or lower per-pupil
costs in all operational areas other than
transportation. The District’s transportation
program operated with slightly higher costs
per pupil and per mile, and some improvements
in the program are needed. Operating efficiently
in most areas allowed the District to spend
more per pupil in the classroom than peer
districts despite its spending less per pupil
overall.
Much lower administrative costs—Queen Creek USD’s administrative costs were 24 percent
lower per pupil than peer districts averaged—$566 compared to $748. The District spent less on
administration primarily because it employed fewer administrative staff and paid some
administrators lower salaries. However, this report identified some administrative practices that
need strengthening (see Finding 1, page 3).
Similar plant operations costs—Queen Creek USD’s $5.76 plant operations cost per square
foot was similar to the peer districts’ average of $5.70. The District’s plant operations cost per pupil
was slightly lower primarily because it operated and maintained less square footage per pupil than
peer districts.
Efficient food service program—The District’s food service program operated efficiently with
a cost per meal of $2.43 that was 9 percent lower than the peer districts’ $2.66 average. Queen
Creek USD controlled costs by closely monitoring the program, including regularly calculating
meals per labor hour and making corresponding adjustments to the number of hours employees
worked. However, the costs for meals sold to some charter schools exceeded the revenues they
generated (see Other Findings, page 9).
Higher transportation costs—The District’s $427 cost per pupil was 8 percent higher than the
peer districts’ average of $396, and its $3.61 cost per mile was 6 percent higher than the peer
districts’ average of $3.40. These higher costs contributed to the District’s subsidizing its
transportation program with $270,000 that could potentially have been spent in the classroom.
The District’s costs were higher in part because its routes were likely not efficient and it did not
use performance measures to help evaluate and monitor the efficiency of its program. Further,
Queen Creek USD over-reported its fiscal year 2011 route miles to the Arizona Department of
Education for state transportation funding, resulting in its being overfunded by $63,000 in fiscal
year 2012 (see Finding 2, page 5).
Spending
Queen
Creek
USD
Peer
Group
Average
State
Average
Total per pupil $6,725 $7,096 $7,609
Classroom dollars 3,974 3,889 4,253
Nonclassroom
dollars
Administration 566 748 721
Plant operations 821 874 914
Food service 293 322 366
Transportation 427 396 342
Student support 471 578 581
Instructional
support 173 289 432
Table 1: Comparison of Per-Pupil
Expenditures by Operational Area
Fiscal Year 2010
(Unaudited)
Source: Auditor General staff analysis of fiscal year 2010
Arizona Department of Education student
membership data and district-reported accounting
data.
page 3
Office of the Auditor General
FINDING 1
Much lower administrative costs, but some improvements
needed
In fiscal year 2010, Queen Creek USD’s administration operated efficiently with costs that were 24
percent lower per pupil than peer districts’, on average. The District attained these lower costs
primarily by employing fewer administrative staff and paying some administrators lower salaries than
peer districts. However, the District should strengthen controls over access to its computerized
accounting and student information systems.
Fewer administrative employees and lower salaries for some
administrators
In fiscal year 2010, Queen Creek USD spent $566 per pupil for administration, which is $182 or 24
percent less than the peer districts’ average of $748 per pupil. Queen Creek USD spent less for
administration primarily because it employed fewer administrative employees and paid some
administrators lower salaries than peer districts. The District employed one administrative full-time
equivalent (FTE) position for every 112 students while the peer districts employed one FTE for every
95 students, on average. Queen Creek USD’s lower administrative staffing was primarily due to its
employing fewer administrative support positions at school sites, including secretaries and
receptionists, and fewer support staff positions in its business office, such as clerks and bookkeepers.
Further, the District also employed fewer administrative technology employees to maintain its
computer network and information systems. Additionally, in reviewing detailed information for the six
audited peer districts, auditors found that Queen Creek USD’s superintendent was paid slightly less
and its assistant principals were paid much less despite generally having a similar number of years
of experience as the audited peer districts’ administrators.1
District should strengthen controls over access to accounting and
student information systems
The District needs to improve controls over user access to its accounting and student information
systems. Although no improper transactions were detected in the items auditors reviewed,
1 Within the 11-district efficiency peer group, auditors compared administrative salaries and longevity among a 6-district subset that was
subject to performance audits for fiscal year 2010 operations.
page 4
State of Arizona
strengthening access controls to these systems is necessary to help prevent fraud and abuse
and to protect sensitive information.
Broad access to accounting and student information systems increased risk
of errors, fraud, and misuse of sensitive information—Auditors reviewed the
District’s user access report for the 15 primary users with access to the accounting system
and found that one employee had full access to all accounting system functions. Full access
in the accounting system provides an employee the ability to add new vendors, create and
approve purchase orders, pay vendors, add new employees, set employee pay rates, and
process payroll payments without independent review. Five additional employees had less
than full access, but still had accounting system access beyond what was required to com-plete
their job responsibilities. Although no improper transactions were detected in the payroll
and accounts payable transactions auditors reviewed, access beyond what is required to
fulfill job responsibilities exposes the District to a greater risk of errors, fraud, and misuse, such
as processing false invoices or adding nonexistent vendors or employees. The District also
needs to review access to its student information system to ensure that employees have
access to only the information required for them to perform their job duties and to help ensure
compliance with federal laws such as the Family Educational Rights and Privacy Act. Auditors
reviewed the District’s user access report for all 387 users with access to the student informa-tion
system and found that 58 employees had access to student health records while only a
few of those employees appeared to need that information to carry out their job duties.
Recommendation
1. The District should limit employees’ access to only those accounting system functions and
student information needed to perform their job responsibilities.
page 5
Office of the Auditor General
FINDING 2
Improvements needed to lower transportation costs and
accurately report transportation miles and riders
Compared to peer districts’, Queen Creek USD’s fiscal year 2010 transportation costs were 6
percent higher per mile and 8 percent higher per pupil. These higher costs contributed to the
District’s spending $270,000 more on its transportation program than it received in state transportation
funding, meaning the District had to subsidize its transportation program with monies that otherwise
potentially could have been spent in the classroom. The District’s costs were higher in part because
its routes were likely inefficient and it did not use performance measures to help it evaluate and
monitor the efficiency of its program and proactively identify operational issues. Additionally, the
District over-reported its mileage for state funding purposes in fiscal year 2011, resulting in its being
overfunded by $63,000 in fiscal year 2012. Queen Creek USD also did not have supporting
documentation for the number of route miles and riders that it reported for state transportation
funding in fiscal year 2010.
Higher costs led to subsidy of transportation program
In fiscal year 2010, Queen Creek USD’s $3.61 cost per mile was 6 percent higher than the peer
district’s average of $3.40, and its $427 cost per pupil was 8 percent higher than the peer district’s
average of $396. These higher costs contributed to the District’s subsidizing its transportation
program by $270,000. The District’s costs were higher primarily because its bus routes were likely
inefficient and it did not use performance measures to help it evaluate and monitor the efficiency of
its program.
Inefficient bus routes—The District did not maintain records supporting fiscal year 2010 bus
ridership to determine route efficiency for that year, so auditors reviewed bus route efficiency in
fiscal year 2011 and found that routes were inefficient. In fiscal year 2011, district routes filled
buses to only 64 percent of bus capacity, on average, and many routes filled buses to less than
50 percent of bus capacity. Districts with efficient bus routes will typically operate routes that fill
buses to 75 percent or more of bus capacity. Prior audits have shown that districts with high
transportation costs often operate inefficient bus routes. Further, the District had a similar number
of students in fiscal years 2010 and 2011, and district officials stated that routes did not change
substantially between those years. Therefore, it appears likely that the District’s routes were also
page 6
State of Arizona
inefficient in fiscal year 2010 and, as such, may help explain the District’s high costs. Although
district officials indicated they regularly review bus routes, the District should take a closer look
at routes with an emphasis on combining routes and potentially reducing the number of buses
and drivers needed.
Performance measures not established and monitored—The District did not
establish and monitor performance measures to help it evaluate the efficiency of its
transportation program. The District’s high costs and subsidy of its program emphasizes the
need for such monitoring. Measures such as cost per mile, cost per rider, miles per gallon,
and ride times can help the District identify areas for improvement. With such measures, the
District can better evaluate the efficiency of its program and proactively identify operational
issues.
District overstated mileage, which resulted in $63,000 of
overfunding
Districts receive state monies for student transportation based on a formula that uses primarily
the number of route miles traveled and secondarily the number of eligible students transported.
Route miles traveled do not include miles for bus maintenance, field trips, and other activity
miles. These miles are funded separately. Queen Creek USD did not maintain detailed records
supporting its reported number of route miles and other miles for fiscal year 2010, as required
by the Arizona State Library, Archives and Public Records retention schedule, so auditors
reviewed available fiscal year 2011 records and determined that the District reported its fiscal
year 2011 route mileage based on bus odometer readings, which included nonroute miles. As
a result, the District over-reported its fiscal year 2011 transportation route miles to the Arizona
Department of Education by about 15,000 miles and was overfunded by about $63,000 in state
transportation funding. The District did not maintain detailed records from previous years for
auditors to determine possible overfunding in those years; however, district officials stated that
they had used a similar methodology of using changes in odometer readings for reporting route
miles for many years, and therefore, the District was likely overfunded for those prior years as
well because the reported miles would have included nonroute miles.
Additionally, the District did not maintain records supporting the number of riders reported for
fiscal year 2010 as required by the Arizona State Library, Archives and Public Records retention
schedule. Because of the lack of rider information, efficiency benchmarks such as cost per rider
or bus capacity usage rates could not be calculated for fiscal year 2010 to help further evaluate
the efficiency of the District’s program.
page 7
Office of the Auditor General
Recommendations
1. The District should closely review its bus routes to determine if changes can be made to
improve route efficiency.
2. The District should develop and monitor performance measures such as cost per mile, cost
per rider, and bus capacity usage.
3. The District should accurately calculate and report the miles driven for state funding purposes.
4. The District should contact the Arizona Department of Education regarding needed corrections
to its transportation funding reports and corresponding adjustments to its expenditure budget.
5. The District should maintain its records supporting the reported number of transportation miles
and riders as required by the Arizona State Library, Archives and Public Records retention
schedule.
page 8
State of Arizona
OTHER FINDINGS
page 9
Office of the Auditor General
In addition to the two main findings presented in this report, auditors identified one other less
significant area of concern that requires district action.
District incurred a loss on lunches provided to some charter
schools
In fiscal year 2010, Queen Creek USD provided lunches for five local charter schools and provided
breakfasts and snacks for one of the five charter schools. The District charged the charter schools
for the costs of these meals with the intent that they would generate additional revenue for the
District’s food service program. However, the District did not charge some of the charter schools
enough for the meals to cover its costs. More specifically, auditors found that Queen Creek USD
incurred a loss on the lunches sold to two of the five charter schools. At these two charter schools,
the District’s costs for the meals exceeded its revenues by an estimated combined total of $3,700.
Before agreeing to provide services to other organizations, the District should carefully analyze all
costs and expected revenues to ensure such agreements are at least self-supporting.
Recommendation
The District should renegotiate prices with the charter schools to ensure that revenues generated
from selling meals at least cover the related costs.
page 10
State of Arizona
APPENDIX
page a-1
Office of the Auditor General
Objectives, Scope, and Methodology
The Office of the Auditor General has conducted a performance audit of the Queen Creek Unified
School District pursuant to A.R.S. §41-1279.03(A)(9). Based in part on their effect on classroom
dollars, as previously reported in the Auditor General’s annual report, Arizona School District
Spending (Classroom Dollars report), this audit focused on the District’s efficiency and effectiveness
in four operational areas: administration, plant operations and maintenance, food service, and
student transportation. To evaluate costs in each of these areas, only current expenditures, primarily
for fiscal year 2010, were considered.1 Further, because of the underlying law initiating these
performance audits, auditors also reviewed the District’s use of Proposition 301 sales tax monies and
how it accounted for dollars spent in the classroom.
In conducting this audit, auditors used a variety of methods, including examining various records,
such as available fiscal year 2010 summary accounting data for all districts, Queen Creek USD’s
fiscal year 2010 detailed accounting data, contracts, and other documents, and its fiscal year 2011
student transportation data; reviewing district policies, procedures, and related internal controls;
reviewing applicable statutes; and interviewing district administrators and staff.
To analyze Queen Creek USD’s operational efficiency, auditors selected a group of peer districts
based on their similarities in district size, type, and location. This operational peer group includes
Queen Creek USD and the ten other unified and high school districts that also served between 2,000
and 7,999 students and were located in cities and suburbs. Within this operational peer group,
auditors developed a subset consisting of six districts that were subject to performance audits for
their fiscal year 2010 operations. Auditors compared the more detailed accounting, salary, and
longevity data that were available for these districts to Queen Creek USD’s operations where
applicable. To compare districts’ academic indicators, auditors developed a separate student
achievement peer group using poverty as the primary factor because poverty has been shown to be
strongly related to student achievement. Auditors also used secondary factors such as district type,
size, and location to further refine these groups. Queen Creek USD’s student achievement peer
group includes Queen Creek USD and the 13 other unified districts that also served student
populations with poverty rates less than 14 percent. Additionally:
•• To assess the District’s student achievement, auditors reviewed the Arizona’s Instrument to
Measure Standards (AIMS) passing rates, “Adequate Yearly Progress” for the federal No Child
Left Behind Act, and high school graduation rates. AIMS passing rates were compared to the
state-wide average and the average of the student achievement peer districts.
1 Current expenditures are those incurred for the District’s day-to-day operations. They exclude costs associated with repaying debt, capital
outlay (such as purchasing land, buildings, and equipment), and programs such as adult education and community service that are outside
the scope of preschool through grade-12 education.
page a-2
State of Arizona
•• To assess whether the District’s administration effectively and efficiently managed district
operations, auditors evaluated administrative procedures and controls at the district and
school level, including reviewing personnel files and other pertinent documents, and
interviewing district and school administrators about their duties. Auditors also reviewed
and evaluated fiscal year 2010 administration costs and staffing levels and compared these
to peer districts’. To further evaluate costs, auditors compared Queen Creek USD’s
administrative staff salaries and longevity to the averages of the six-district subset described
previously.
•• To assess the District’s computer information systems and network, auditors evaluated
certain controls over its logical and physical security, including user access to sensitive data
and critical systems, and the security of servers that house the data and systems. Auditors
also evaluated certain district policies over the system, such as data sensitivity, backup, and
recovery.
•• To assess whether the District’s transportation program was managed appropriately and
functioned efficiently, auditors reviewed and evaluated required transportation reports,
driver files, bus maintenance and safety records, bus routing, and bus capacity usage.
Auditors also reviewed fiscal year 2010 transportation costs and compared them to peer
districts’. Because of the lack of documentation for fiscal year 2010 mileage driven and
riders transported, auditors reviewed and evaluated available documentation of fiscal year
2011 mileage, riders, and bus capacity usage.
•• To assess whether the District’s food service program was managed appropriately and
functioned efficiently, auditors reviewed fiscal year 2010 food service revenues and
expenditures, including labor and food costs, compared costs to peer districts’, reviewed
the Arizona Department of Education’s food service monitoring reports, and observed food
service operations. Auditors also reviewed the program’s costs and related revenues
generated from meals sold to outside organizations. The costs for these meals were
excluded from the calculation of the District’s food service cost per pupil used in this report.
•• To assess the District’s financial accounting data, auditors evaluated the District’s internal
controls related to expenditure processing and scanned all payroll and accounts payable
transactions for proper account classification and reasonableness. Additionally, auditors
reviewed detailed payroll and personnel records for 30 of 866 individuals who received
payments through the District’s payroll system and reviewed supporting documentation for
30 of the 17,833 accounts payable transactions. Auditors also evaluated other internal
controls that were considered significant to the audit objectives.
•• To assess whether the District’s plant operations and maintenance function was managed
appropriately and functioned efficiently, auditors reviewed and evaluated fiscal year 2010
plant operations and maintenance costs and district building space, and compared these
costs and capacities to peer districts’.
•• To assess whether the District was in compliance with Proposition 301’s Classroom Site
Fund requirements, auditors reviewed fiscal year 2010 expenditures to determine whether
page a-3
Office of the Auditor General
they were appropriate and if the District properly accounted for them. Auditors also reviewed the
District’s performance pay plan and analyzed how performance pay was being distributed. No
issues of noncompliance were identified.
We conducted this performance audit in accordance with generally accepted government auditing
standards. Those standards require that we plan and perform the audit to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and conclusions based on our
audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.
The Auditor General and her staff express their appreciation to the Queen Creek Unified School
District’s board members, superintendent, and staff for their cooperation and assistance throughout
the audit.
page a-4
State of Arizona
DISTRICT RESPONSE
DISTRICT RESPONSE
Queen Creek School District No.95
20217 East Chandler Heights Road, Queen Creek, Arizona 85142 Phone (480) 987-5935 Fax (480) 987-9714
Learning Is Our #1 Priority!
Together We Make A Difference!
Mr. Tom Lindsey, Superintendent of QCUSD Schools
October 17, 2012
State of Arizona
Office of the Auditor General
Debra Davenport, Auditor General
2910 North 44th Street, Suite 410
Phoenix, Arizona 85018
Ms. Davenport,
Queen Creek Unified School District (QCUSD) respectfully submits our response to the Performance Audit for
Fiscal Year 2010, which was conducted in conformity with Arizona Revised Statue (A.R.S.) §41-1279.03. QCUSD
understands that this Statue requires all Arizona public school districts to undergo a specialized audit to assess a
District’s comparative expenditure patterns with similar sized districts.
QCUSD welcomes the opportunity to improve our organization and appreciates the Auditor General staff that was
assigned to our District in regard to their professionalism while interacting with our staff. The A.G.’s staff was
sensitive to the additional time necessary for completion of this audit and has been extremely supportive and helpful
throughout the audit process.
QCUSD appreciates the auditor’s recognition of our student achievement, with AIMS scores similar to peer
districts’ scores and much higher than state averages. We further appreciate the acknowledgement that the District
operated efficiently overall, with costs that were lower than or similar to peer districts.
The Performance Audit lists two main findings regarding low administrative costs and improvements needed to
lower transportation costs and accurately report transportation miles and riders and one other less significant finding
in that the District incurred losses on lunches provided to some charter schools. On the following pages, in
compliance with the requirements of A.R.S. §41-1279.03, QCUSD has addressed each recommendation in the
report, stating whether the District:
1. Does or does not agree with the findings and recommendations, and
2. Will implement the recommendation, will implement a modification to the recommendation, or will not
implement the recommendation.
Please contact us if you have any questions regarding our response.
Sincerely,
Thomas Lindsey
QCUSD Superintendent
Cc: Shari Zara, Chief Financial Officer
Governing Board, Queen Creek Unified School District
Ross Ehrick, Division of School Audits Director
Ann Orrico, Division of School Audits Manager
Finding 1:
Response:
The District concurs with the finding and will ensure strengthened controls over access to accounting
and student information systems.
The District has reviewed employee job responsibilities and limited their access to the accounting and
the student information systems to be in alignment with their responsibilities.
Finding 2:
Response:
The Transportation Department agrees, with the findings of the Auditor General’s office in reference to
the operations of this Department.
It is the intent, of the Queen Creek Unified School District Transportation Department, to comply with all
of the recommendations in the report.
1. The District will closely review its bus routes to determine if changes can be made to
improve efficiency. We have already combined some routes and will continue to try to
combine other routes. More routes may be able to be combined, to reach the 75% ridership
desired. We have also already implemented a Transportation routing software system.
2. The District will develop and monitor performance measures such as cost per mile, cost per
rider, and bus capacity usage. We have already implemented new vehicle maintenance
software, in our vehicle repair area, which will assist us in more accurately measuring and
monitoring vehicle costs per mile, cost per rider, and bus capacity usage.
3. The District will accurately calculate and report the miles driven for state funding purposes.
This department has very recently received training on how to properly calculate and report
the miles driven for state funding purposes. There will be no further discrepancies in the
reporting of the mileage.
4. The District will contact the Arizona Department of Education regarding needed corrections
to its transportation funding reports and corresponding adjustments to its expenditure
budget.
5. The District will retain ALL supporting documentation to support the reported number of
transportation students and miles as required by the Arizona State Library, Archives, and
Public Records retention schedule.
Other Findings:
Response:
The District agrees with the finding and will renegotiate prices with the charter schools to ensure that
revenues generated from selling meals at least cover the related costs. The District has analyzed
prices with the charter schools to ensure that revenues generated from selling meals at least cover the
related costs. The preschool sites contracts will be reviewed to include all costs and will be kept with
contracts commencing 2013‐14 school year. A recent analysis was completed. A new contract that
increased lunch prices for the K‐8 charter schools was presented to the Governing Board for approval,
on June 2012.