Performance audit, Cave Creek Unified School District

              Performance Audit
Cave Creek Unified
School District
Division of School Audits
Debra K. Davenport
Auditor General
June • 2012
Report No. 12-06
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
Ann Orrico, Manager and Contact Person
Judy Fitzgerald
Chris Moore
Valerie Volanti
Copies of the Auditor General’s reports are free.
You may request them by contacting us at:
Office of the Auditor General
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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
June 26, 2012
Members of the Arizona Legislature
The Honorable Janice K. Brewer, Governor
Governing Board
Cave Creek Unified School District
Dr. Debbi Burdick, Superintendent
Cave Creek Unified School District
Transmitted herewith is a report of the Auditor General, A Performance Audit of the Cave 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 June 27, 2012.
Sincerely,
Debbie Davenport
Auditor General
In fiscal year 2010, Cave Creek USD’s
plant operations costs were 8 percent
higher than peer districts’ average per
square foot and 16 percent higher per
student. Costs were high primarily
because of higher electricity and water
usage, which was affected by frequent
community use of the District’s facilities,
operating higher-than-average square
footage per student, and the lack of a
formal energy conservation plan. Both the
District’s electricity and water costs were
more than 35 percent higher per square
foot than peer districts’.
Frequent community use of facilities—
According to district officials, community
groups, such as churches, athletic clubs,
and Boys and Girls Scouts, frequently rent
district facilities. We reviewed 2 months’ of
facilities usage requests during fiscal year
2010 and found that community groups
used the District’s facilities an average of
600 hours each month. Information from
one recently audited peer district showed
that community rentals at that district
averaged only about 300 hours each
month. According to district officials,
community use increased electricity and
District is working to address high plant operations costs
REPORT Higher student achievement and efficient operations
HIGHLIGHTS
PERFORMANCE AUDIT
Student achievement higher than peer
and state averages—In fiscal year 2010,
Cave Creek USD’s student AIMS scores
were higher than peer districts’ and much
higher than state averages. In addition, all
of the District’s eight schools met
“Adequate Yearly Progress” for the federal
No Child Left Behind Act. Further, its
95-percent graduation rate was slightly
higher than the 92-percent peer district
average and much higher than the
78-percent state average.
District operated efficiently overall—In
fiscal year 2010, Cave Creek USD’s
administrative costs were slightly lower
than peer districts’ and its transportation
program was reasonably efficient with
similar or lower costs per pupil and per
mile. The District’s transportation costs per
rider were higher because it transported
its riders more miles, on average. Further,
although food service per-meal costs were
slightly higher than peer districts’, the
District’s food service program revenues
covered its costs. However, the District’s
plant operations costs were higher both
per square foot and per pupil because of
frequent community usage of its buildings
and fields, maintaining more square
footage per student, and not having an
energy conservation plan or procedures.
Our Conclusion
In fiscal year 2010, Cave
Creek Unified School
District’s student
achievement was higher
than peer districts’ and
state averages. Further,
the District operated
efficiently overall, with
costs that were lower than,
or similar to, peer districts’
in most operational areas.
The District’s
administrative costs were
slightly lower than peer
districts’, and its
transportation program
was reasonably efficient.
Although the District’s per-meal
food service costs
were slightly higher than
peer districts’, the
program’s revenues were
sufficient to cover its costs.
However, plant operations
costs were higher than
peer districts’ because of
higher electricity and water
costs due to frequent
community use of district
buildings and fields,
excess square footage,
and the lack of an energy
conservation plan.
2012
June • Report No. 12-06
Cave Creek
Unified
School District
Operational
Area
Cave Creek
USD
Peer Group
Average
Administration $ 719 $748
Plant operations 1,011 874
Food service 286 322
Transportation 409 396
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
Cave Creek USD Peer Group State-wide
closure, the District’s elementary schools’ average
capacity rate rose to only 66 percent in fiscal year
2011.
No formal energy conservation plan—Cave Creek
USD did not have a formal energy conservation
plan in place during fiscal year 2010. As a result, the
District had several inefficient energy practices
during that fiscal year. For example, the District’s
exterior lights were left on from dusk to dawn, and
the District cooled school buildings until 9 p.m. on
weeknights, even if they were unoccupied.
District making efforts to reduce energy
consumption and costs—Since fiscal year 2010,
Cave Creek USD has implemented several
energy-saving measures. For example, the District
has set formal heating and cooling temperature
polices, and it enforces these policies through a
centrally controlled energy management system.
The District also replaced and upgraded outdated
equipment, such as lighting and water fixtures and
central plant heating and cooling equipment, with
more efficient models, and began shutting off all
external lights at midnight each day. As a result, the
District expects to save nearly $312,000 annually.
Finally, the middle school closure in fiscal year 2011
should help lower electricity usage and costs.
Recommendations—The District should:
••Continue analyzing the prices it charges
community groups for the use of its facilities.
••Review its building capacity usage to determine
whether any schools or sections of schools can
be closed to reduce maintenance and utility
costs.
••Continue its efforts to reduce energy and water
costs.
water usage because the District has to heat or cool
district buildings during nonschool times and water
fields more frequently because of the increased
wear and tear.
Further, although the District received rental fees
from the community groups, the fees did not cover
all of the District’s additional costs to operate and
maintain its facilities for community use. However, in
fiscal year 2012, the District began looking at
revising its facilities’ usage fee schedules to help
ensure it will be able to better cover its costs when
renting out its facilities in the future.
More building space—Cave Creek USD’s higher
electricity costs were also due to its operating and
maintaining 6 percent more square footage per
student than the peer districts. The additional space
occurred primarily at the District’s elementary
schools, which averaged 161 square feet per
student, while the peer districts’ elementary schools
averaged 134 square feet per student. This was
also double the 80 square feet per student state
minimum standard for kindergarten through
6th-grade students. Operating more building space
per student is costly because the majority of a
district’s funding is based on its number of
students, not its amount of square footage.
As shown in the table below, in addition to having
more space, Cave Creek USD’s elementary schools
operated well below their designed capacities,
ranging from 45.9 percent full to 70.1 percent full.
On average, the District’s elementary schools
operated at a 56-percent capacity usage rate, while
the peer districts’ elementary schools operated at a
74-percent capacity usage rate.
In fiscal year 2011, the District closed one of its
middle schools. However, even with this school
REPORT
HIGHLIGHTS
PERFORMANCE AUDIT
June 2012
A copy of the full report is available at:
www.azauditor.gov
Contact person:
Ann Orrico (602) 553-0333
Cave Creek
Unified
School District
School Name
Number
of
Students Capacity
Capacity
Usage
Black Mountain Elementary School 503 1,097 45.9%
Desert Sun Elementary School 416 829 50.2
Desert Willow Elementary School 592 845 70.1
Horseshoe Trails Elementary School 498 899 55.4
Lone Mountain Elementary School 527 885 59.5
Number of Students, Capacity, and
Capacity Rate by Elementary School
Fiscal Year 2010
(Unaudited)
TABLE OF CONTENTS
continued
page i
Office of the Auditor General
District Overview 1
Student achievement higher than state and peer districts’ averages 1
District operated efficiently overall 1
Finding 1: District working to address its high plant operations costs 3
High utilities costs drive high plant operations costs 3
District has made efforts to reduce energy consumption and costs 5
Recommendations 6
Other Findings 7
1. District did not accurately report its costs 7
Recommendation
2. Some Classroom Site Fund monies paid to ineligible employees 7
Recommendation
Appendix
Objectives, Scope, and Methodology a-1
District Response
TABLE OF CONTENTS
concluded
page ii
State of Arizona
Tables
1 Comparison of Per-Pupil Expenditures by Function
Fiscal Year 2010
(Unaudited) 2
2 Comparison of Costs Per Square Foot
Fiscal Year 2010
(Unaudited) 3
3 Number of Students, Capacity, and Capacity Rate by Elementary School
Fiscal Year 2010
(Unaudited) 4
Figure
1 Percentage of Students Who Met or Exceeded State Standards (AIMS)
Fiscal Year 2010
(Unaudited) 1
DISTRICT OVERVIEW
page 1
Office of the Auditor General
Cave Creek Unified School District is located in Maricopa County, approximately 30 miles northeast
of downtown Phoenix. In fiscal year 2010, the District served 5,608 students at its eight schools: five
kindergarten-through-6th-grade elementary schools, two 7th-through-8th-grade middle schools, and
one 9th-through-12th-grade high school.
In fiscal year 2010, Cave Creek USD compared favorably with peer districts in student achievement,
with AIMS scores higher than peer districts’ and much higher than state averages.1 Further, the
District operated efficiently overall, with costs that were lower than or similar to peer districts’ in all
areas except plant operations. The District operated its administration and transportation program
with per-pupil costs that were slightly lower than peer districts’, and its food service program had
mixed costs but operated efficiently overall. However, the District should take steps to lower its
higher-than-average plant operations costs.
Student achievement higher than state and peer districts’ averages
In fiscal year 2010, 79 percent of the District’s students met or exceeded state standards in math, 91
percent in reading, and 89 percent in writing. As shown in Figure 1, these scores were higher than
peer districts’ and much higher than the state averages. In that same fiscal year, all of the District’s
eight schools met all “Adequate Yearly Progress” objectives for the federal No Child Left Behind Act.
In addition, the District’s fiscal year 2010 graduation rate
of 95 percent was higher than the peer group average
of 92 percent and much higher than the state average
of 78 percent.
District operated efficiently overall
As shown in Table 1, in fiscal year 2010, Cave Creek
USD spent about $200 less per pupil overall when
compared to peer districts, and its classroom spending
was about $300 less than the peer district average. The
District’s plant operations costs, which were about $140
more per pupil than the peer districts’ average, were the
main factors contributing to the lower classroom
spending.
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
Cave Creek USD
Peer Group
State-wide
page 2
State of Arizona
Administrative costs were slightly
lower—At $719 per pupil, the District’s
administrative costs were slightly lower than
the peer districts’ average of $748.
Higher plant operations costs—In
addition to being higher on a per-pupil
basis, the District’s $6.14 per-square-foot
plant operations costs were 8 percent
higher than the peer districts’ average of
$5.70 per square foot. These higher costs
resulted from the District’s higher utilities
costs, its maintaining more square feet per
student than peer districts, and its lack of
an energy conservation plan or procedures.
(See Finding 1, page 3.)
Food service costs per meal slightly
higher, but program revenues cover costs—Cave Creek USD’s per-pupil food
service costs were lower than peer districts’ only because it served 17 percent fewer meals
per student. The District’s $2.80 cost per meal was about 5 percent higher than the peer
district’s average of $2.66 primarily because the District regularly offered vendor-prepared
meals, which were more expensive than district-prepared meals. However, because the
District charged students higher prices for the vendor-prepared meals, the District’s food
service program revenues were sufficient to cover its costs. Therefore the higher per-meal
costs did not require a district subsidy, which would lower the amount of money available for
classroom spending.
Transportation program reasonably efficient—Cave Creek USD’s transportation
costs were similar to or lower than peer districts’ costs on a per-pupil and per-mile basis, but
its costs per actual rider were considerably higher. Per-rider costs were higher because the
District transported students 20 percent more miles for a similar number of riders. Although
the transportation program is reasonably efficient, the District struggled with keeping certain
bus routes full because many of the District’s students live far from the schools they attend.
Specifically, all of the District’s schools are located within the southwestern portion of the
District’s boundaries while students are spread throughout the District. Therefore, at least 20
percent of district buses traveled over 100 miles each day with ride times of an hour or more
for students who live in other parts of the District. The District could potentially reduce certain
operating costs, such as fuel, if it could send smaller buses or vehicles instead of full-size
buses on these longer, lower-ridership routes. However, the District does not have smaller
buses available at this time.
Spending
Cave
Creek USD
Peer
Group
Average
State
Average
Total per pupil $6,892 $7,096 $7,609
Classroom dollars 3,576 3,889 4,253
Nonclassroom
dollars
Administration 719 748 721
Plant operations 1,011 874 914
Food service 286 322 366
Transportation 409 396 342
Student support 602 578 581
Instructional
support 289 289 432
Table 1: Comparison of Per-Pupil
Expenditures by Function
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
District working to address its high plant operations costs
In fiscal year 2010, Cave Creek USD’s per-square-foot plant operations costs were 8 percent higher
than the peer districts’ average and 16 percent higher per student. Costs were high primarily because
of higher energy and water usage, which were affected by frequent community use of the District’s
facilities, higher-than-average square footage per student, and the lack of a formal energy
conservation plan. However, since fiscal year 2010, the District has closed a school, undergone an
energy assessment, and implemented some energy conservation practices to help control its energy
usage.
High utilities costs drive high plant operations costs
In fiscal year 2010, Cave Creek USD’s $6.14
per-square-foot plant operations costs were 44
cents higher than the peer districts’ average, and its
$1,011 per-pupil costs were $137 higher. As shown
in Table 2, the District’s electricity costs were 49
cents higher per square foot than the peer districts’
average, while water costs were 14 cents per square
foot higher—in both cases, a difference of more
than 35 percent. Three factors contributed to the
difference: (1) frequent community use of facilities,)
(2) larger-than-average facilities, and (3) the lack of
a formal energy conservation plan.
Frequent community use of facilities—The community’s use of the District’s facilities and
fields after school and during weekends and school breaks are a contributor to the District’s higher
energy and water consumption and costs. According to district officials, Cave Creek USD
experiences frequent community use of the District’s facilities through the year. Auditors reviewed
2 months of facilities usage requests during fiscal year 2010 and found that community groups
used the District’s buildings, gyms, or fields an average of 600 hours each month. Therefore, the
District operated and maintained its facilities and grounds an additional 600 hours each month
beyond what was needed for normal school operations. Information about community use of
facilities was not readily available from most districts in the peer group, but information available
FINDING 1
District
Total Plant
Operations
Costs
Electricity
Costs
Water
Costs
Cave Creek USD $6.14 $1.80 $0.52
Average of the peer group 5.70 1.31 0.38
Table 2: Comparison of Costs Per Square Foot
Fiscal Year 2010
(Unaudited)
Source: Auditor General staff analysis of fiscal year 2010 School
Facilities Board square footage information and district-reported
accounting data.
page 4
State of Arizona
from one recently audited peer district showed that community rentals at that district averaged
only about 300 hours per month. Cave Creek USD’s facilities were used by various community
groups, such as churches, athletic clubs, Girl Scouts and Boy Scouts, and arts groups.
Although statutorily the District is able to rent its facilities to community groups such as these,
the additional use increases utility consumption and costs in the following ways:
•• More frequent and year-round watering—According to district officials, the additional
wear and tear on the fields requires more watering to maintain the grass in good condition.
Further, because the fields continue to be used over the summer break, the District waters
several of its fields more often during that time than it would otherwise need to. Three
recently audited districts within Cave Creek’s peer group reported that they do not water
their fields during the summer months.
•• Increased energy use—Community use of the buildings or gyms during the evenings
and nonschool days requires heating and cooling of rooms or buildings at more
comfortable temperatures than would have otherwise been required, increasing energy
consumption. Further, the District cools some of its schools using chillers rather than air
conditioners. However, according to district officials, the chillers operate less efficiently
when they are used to cool only a room or building rather than when they are used to cool
an entire school.
Further, although the District received rental fees from the community groups, the fees did not
cover all of the District’s additional costs to operate and maintain its facilities for community
use. However, in fiscal year 2012, the District began looking at revising its facilities’ usage fee
schedules to help ensure it will be able to better cover its costs when renting out its facilities
in the future. Arizona Revised Statutes (A.R.S.) §15-1105 requires that districts charge fees
that are at least equal to their costs for utilities, services, supplies, or personnel that they
provide when renting their facilities.
More building space and schools operating below capacity—Another reason for
the District’s high energy costs is that it had more square footage to heat and cool than the
peer districts, on average. Overall, the District operated and maintained 165 square feet per
student, which was 6 percent higher than the
peer districts. The District’s additional space
occurred primarily at its elementary schools,
which operated with an average of 161 square
feet per student. This was 20 percent more than
the 134 square feet per pupil averaged by the
peer districts’ elementary schools and is double
the State’s minimum square-feet-per-student
standard of 80 square feet for students in
kindergarten through 6th grade established by
the Arizona School Facilities Board. Additionally,
in fiscal year 2010, the District’s five elementary
schools operated at an average capacity rate of
only 56 percent. On average, the peer districts’
elementary schools operated at an average of 74
School Name
Number
of
Students Capacity
Capacity
Usage
Black Mountain Elementary School 503 1,097 45.9%
Desert Sun Elementary School 416 829 50.2
Desert Willow Elementary School 592 845 70.1
Horseshoe Trails Elementary School 498 899 55.4
Lone Mountain Elementary School 527 885 59.5
Table 3: Number of Students, Capacity, and
Capacity Rate by Elementary School
Fiscal Year 2010
(Unaudited)
Source: Auditor General staff analysis of district-reported fiscal year 2010
average daily membership information obtained from the Arizona
Department of Education and fiscal year 2010 gross square footage
and designed capacity information obtained from the Arizona School
Facilities Board.
page 5
Office of the Auditor General
percent capacity. Maintaining more building space per student is costly to the District since the
majority of its funding is based on its number of students, not its amount of square footage.
In fiscal year 2011, the District closed its Desert Arroyo Middle School to reduce administrative and
plant operations costs. Even with the school closure, however, the District’s elementary schools’
average capacity rose to only 66 percent, which is still low compared to peer districts. In light of
the excess capacity even after closing a school, the District should continue to evaluate how to
reduce its excess capacity.
No formal energy conservation plan—The District did not have a formal energy conservation
plan in place during fiscal year 2010. Energy conservation plans typically (1) establish acceptable
room temperatures and light settings for different times of the day, (2) require that energy
consumption be monitored, and (3) set criteria for equipment use, such as not allowing teachers
to keep mini refrigerators, space heaters, and coffeemakers in their classrooms. The lack of a
formal energy conservation plan resulted in the District’s having several inefficient energy practices
during fiscal year 2010. For example, district officials stated that it was their practice to leave all of
the District’s exterior lights on from dusk to dawn, including parking lot lights and school building
lights. Further, the District cooled school buildings until 9 pm on weeknights, even if they were
unused by school or community groups in the evenings. As a result, electricity was being
consumed even when the District’s buildings and grounds were unoccupied.
District has made efforts to reduce energy consumption and costs
Although the District does not have a formal energy conservation plan in place, it has implemented
several energy-saving measures since fiscal year 2010:
•• Temperature settings—In fiscal year 2011, the District set formal heating and cooling
temperature policies, and it enforces these policies though a centrally controlled energy
management system.
•• Lighting timing—The District is also conserving energy by having all external lights shut off at
midnight each day, including parking lot lights and outside building lights.
•• Guaranteed energy savings contract—During fiscal year 2011, the District began an energy
savings project to replace and upgrade some older equipment with newer, more efficient
models. The cost of the project, including financing, is $5.42 million, paid over 15 years. The
estimated annual savings after project payments will be nearly $312,000. The project included
upgrading lighting fixtures, water fixtures, and energy management systems at three schools
and the transportation building, and replacing or repairing central plant cooling and heating
equipment. The project was completed in early fiscal year 2012.
•• School closure—Although it did not calculate the specific amount it expects to save, the
District’s closure of one of its middle schools in fiscal year 2011 is anticipated to contribute to
lower energy costs.
page 6
State of Arizona
Recommendations
1. The District should continue analyzing the prices it charges community groups for the use
of its facilities to ensure the fees better reflect the District’s costs as required by A.R.S.
§15-1105.
2. The District should review its building capacity usage to determine whether additional
schools or unused sections of schools can be closed to reduce maintenance and utility
costs.
3. The District should continue its efforts to reduce its energy and water usage to lower costs.
OTHER FINDINGS
page 7
Office of the Auditor General
In addition to the main finding presented in this report, auditors identified two other less significant
areas of concern that require district action. These additional findings and their related
recommendations are as follows:
1. District did not accurately report its costs
Cave Creek USD did not consistently classify its fiscal year 2010 expenditures in accordance with
the Uniform Chart of Accounts for school districts. As a result, its annual financial report did not
accurately reflect its costs, including both classroom and nonclassroom expenditures. Auditors
identified classification errors totaling approximately $1.6 million of the District’s total $38.6 million in
current spending.1 The dollar amounts shown in the tables and used for analysis in this report reflect
the necessary adjustments.
Recommendation
The District should classify all transactions in accordance with the Uniform Chart of Accounts for
school districts.
2. Some Classroom Site Fund monies paid to ineligible employees
In fiscal year 2010, the District paid Classroom Site Fund (CSF) monies to four ineligible employees
who were not directly involved in student instruction. According to the Attorney General’s definition
of a teacher, only those employed to provide instruction to students related to the school’s educational
mission are eligible to receive CSF monies. Auditors reviewed all 315 employees who received CSF
monies in fiscal year 2010 for eligibility and found that the District paid salary increases and
performance pay to four positions, such as coordinators and facilitators, that were not involved in
student instruction. Instead, these positions helped support instructional staff. These positions were
paid nearly $10,000 in CSF monies in fiscal year 2010.
Recommendation
The District should ensure that only eligible employees receive Classroom Site Fund monies.
1 Current expenditures are those incurred for the District’s day-to-day operation. For further explanation, see Appendix, page a-1.
page 8
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 Cave 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 and Cave Creek USD’s
fiscal year 2010 detailed accounting data, contracts, and other district documents; reviewing district
policies, procedures, and related internal controls; reviewing applicable statutes; and interviewing
district administrators and staff.
To analyze Cave 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
Cave Creek USD and the ten other high school and unified districts that also served between 2,000
and 7,999 students and were located in city/suburb areas. Within this operational peer group,
auditors also developed a subset of six districts that were being audited for their fiscal year 2010
operations. Auditors compared the more detailed accounting and staffing level data that was
available for these districts. 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. Cave Creek USD’s student achievement
peer group includes Cave Creek USD and the 13 other unified districts that also served student
populations with poverty rates between 5 and 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 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’. Auditors also reviewed utilities consumption and
costs for fiscal year 2010 and interviewed district staff about water and energy usage
practices.
•• To assess the District’s financial accounting data, auditors evaluated the District’s internal
controls related to expenditure processing and reviewed transactions for proper account
classification and reasonableness. Auditors also evaluated other internal controls that were
considered significant to the audit objectives.
•• 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
they were properly accounted for and appropriate. Auditors also reviewed the District’s
performance pay plan and analyzed how performance pay was being distributed.
•• 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 compared these to peer districts’.
•• 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. No significant issues were identified.
•• 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.
•• 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’.
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 Cave Creek Unified School
District’s board members, superintendent, and staff for their cooperation and assistance
throughout the audit.
DISTRICT RESPONSE
DISTRICT RESPONSE