Performance audit, Sacaton Elementary School District: a report to the Arizona Legislature

              A REPORT
TO THE
ARIZONA LEGISLATURE
Debra K. Davenport
Auditor General
Sacaton Elementary
School District
Division of School Audits
APRIL • 2003
Performance Audit
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
Senator Robert Blendu, Chair Representative John Huppenthal, Vice Chair
Senator Gabrielle Giffords Representative Tom Boone
Senator Peter Rios Representative Ted Downing
Senator Thayer Verschoor Representative Ken Clark
Senator Jim Weiers Representative Steve Yarbrough
Senator Ken Bennet (ex-officio) Representative Jake Flake (ex-officio)
Audit Staff
Sharron Walker, Director
Ann Orrico, Manager and Contact Person
Jason Blake
Bridget Harper
Vicki Hunter
Revea Schmidt
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.auditorgen.state.az.us
2 9 1 0 N O R T H 4 4 t h S T R E E T • S U I T E 4 1 0 • P H O E N I X , A R I Z O N A 8 5 0 1 8 • ( 6 0 2 ) 5 5 3 - 0 3 3 3 • F A X ( 6 0 2 ) 5 5 3 - 0 0 5 1
DEBRA K. DAVENPORT, CPA
AUDITOR GENERAL
STATE OF ARIZONA
OFFICE OF THE
AUDITOR GENERAL
WILLIAM THOMSON
DEPUTY AUDITOR GENERAL
April 2, 2003
Members of the Arizona Legislature
The Honorable Janet Napolitano, Governor
Governing Board
Dr. Leon Ben, Superintendent
Sacaton Elementary School District
Transmitted herewith is a report of the Auditor General, A Performance Audit of the Sacaton
Elementary School District, conducted pursuant to A.R.S. §41-1279.03.A.9. I am also
transmitting with this report a copy of the Report Highlights to provide a quick summary for
your convenience.
As outlined in its response, the District agrees with most but not all of our
recommendations. We have attached brief comments to the District’s response to
address some inaccuracies in the response.
My staff and I will be pleased to discuss or clarify items in the report.
This report will be released to the public on April 3, 2003.
Sincerely,
Debbie Davenport
Auditor General
Enclosures
The Office of the Auditor General has conducted a performance audit of the Sacaton
Elementary School District pursuant to Arizona Revised Statutes (A.R.S.) §41-
1279.03.A.9. This performance audit examines five aspects of the District's opera-tions:
administration, food service, student transportation, expenditure of sales taxes
received under Proposition 301, and the accuracy of district records used to calcu-late
the percentage of dollars spent in the classroom.
Administration (see pages 7 through 18)
Sacaton Elementary School District’s administrative costs are significantly higher
than other similar districts within the State. Not only does the District have double the
number of administrators than most of the comparable districts, it also generally paid
its administrators higher salaries and provided greater benefits. The District also
made more extensive use of consultants than other comparable districts. During fis-cal
year 2002, the District spent over $212,000 on three administrative consultants to
perform duties that apparently its own staff should perform. Further, the terms of the
District's contracts with one consultant result in a high hourly billing rate. Finally, the
District overpaid this same consultant approximately $30,000.
In addition to consulting costs, the District spent much more than comparable dis-tricts
on travel expenses. During fiscal year 2002, the District spent over $42,600 on
administrative travel, while the comparable districts averaged only about $6,600. To
reduce the amount it spends on administrative travel, the District should limit travel to
conferences and seminars that help the District achieve its goals and objectives.
Further, the District should limit those attending a conference to key staff members
who need to attend and ensure that all travel expenses are allowable and reasonable
by requiring travelers to submit proper documentation of expenses.
The District also did not follow the procurement procedures that statute required.
When reviewing district purchases, auditors found problems ranging from lack of
supporting documentation to a potential conflict of interest. To ensure it adheres to
required procurement procedures, the District should maintain proper documenta-tion
for each purchase, use appropriate vendor selection methods, and ensure that
employees with conflicts of interest are not involved in authorizing the purchases.
page i
Office of the Auditor General
SUMMARY
A detailed listing of the District's administrative positions, duties, salaries, and bene-fits
is included in the Appendix (see page a-iii).
Food service (see pages 19 through 25)
The District could not effectively manage its food service program because it did not
perform basic management oversight functions, such as monitoring financial infor-mation.
The District also lacked inventory management procedures as well as pro-gram
performance measures, such as meals per labor hour and cost per meal. To
better manage its food service program, the District should implement financial man-agement
procedures, such as monitoring the food service program's budget, estab-lishing
inventory management procedures and calculating and monitoring program
measures such as meals per labor hour and cost per meal.
Taking these steps is especially important because the District's food service pro-gram
operates at a deficit and must be subsidized with money from other funds,
including the District's Maintenance and Operation Fund. During fiscal year 2002, this
fund contributed over $6,200 to food service operations that instead could have been
spent in the classroom. In addition, the food service program also received over
$124,000 from the Gila River Indian Community Fund. If not needed to subsidize the
food service program, the District could have chosen to use all or some of this money
in the classroom.
To ensure a safe and sanitary work environment, the District should strengthen its
food service policies and procedures and ensure that they are enforced. Further, the
District should obtain required health inspections twice each year. The District's food
service operations have not had a health inspection since February 2001.
Student transportation (see pages 27 through 29)
The District's student transportation function appeared to be generally operating effi-ciently
and effectively. The District's transportation costs were reasonable when com-pared
to similar districts. In addition, the District operated efficient and effective bus
routes and appropriately accounted for its route mileage. Further, the District has
adopted appropriate policies and procedures that were consistent with state and
federal law to help ensure the safety of the students it transported.
page ii
State of Arizona
Proposition 301 monies (see pages 31 through 34)
In November 2000, voters passed Proposition 301, which increased the state-wide
sales tax to provide additional resources for education programs. The District spent
these monies in accordance with statute. However, the District should ensure that its
Proposition 301 plan specifies which allowable options the District intends to address
with the menu option monies. In addition, the District should obtain Governing Board
approval of any revisions it makes to the plan. Finally, the District should ensure that
eligible employees have met performance measures before performance pay
monies are distributed.
Classroom dollars (see pages 35 through 36)
Statute requires the Auditor General to determine the percentage of every dollar
Arizona school districts spend in the classroom and to analyze school district admin-istrative
costs. Therefore, auditors reviewed the District's recording of classroom and
administrative expenditures to determine their accuracy. The District did not consis-tently
record expenditures in compliance with the Uniform Chart of Accounts for
school districts. Therefore, its financial reports did not accurately reflect its instruc-tional
and administrative costs. Correcting these errors decreased the District’s
classroom dollar percentage for fiscal year 2002 by 0.7 percent. The District’s cor-rected
classroom dollar percentage for fiscal year 2002 was 43.9 percent. The State’s
average for that year was 58.2 percent.
Administrative positions (pages a-iii through a-iv)
As required by Laws 2002, 2nd Regular Session, Chapter 330, Section 54, this report
also contains detailed information about the District’s administrative positions includ-ing
their duties, salaries and benefits.
page iii
Office of the Auditor General
page iv
State of Arizona
pagev
Office of the Auditor General
TABLE OF CONTENTS
continued
1
7
7
8
10
14
14
16
16
17
18
18
19
19
21
23
24
25
Introduction & Background
Chapter 1: Administration
What are administrative costs?
On average, the District’s administrative costs per pupil were sig-nificantly
higher than comparable districts
The District uses consultants extensively, pays higher hourly rates,
and does not monitor billings
Recommendations
The District’s $42,000 administrative travel costs far exceed peer
districts’ average of $6,600
Recommendations
The District does not follow proper purchasing practices and
allowed a potential conflict of interest
Recommendations
The District’s Governing Board meetings were cancelled or post-poned
without proper notice
Recommendations
Chapter 2: Food service
Background
The District did not effectively manage its food service program
Recommendations
The District did not take sufficient action to ensure the safety and
sanitation of its food service operations
Recommendations
continued
page vi
State of Arizona
TABLE OF CONTENTS
Chapter 3: Student transportation
Background
The District’s transportation costs, routes, and reported route miles
are reasonable
The District maintained and followed appropriate policies and pro-cedures
to ensure the safety of student riders
Chapter 4: Proposition 301 monies
Background
District’s Proposition 301 plan
The District’s Proposition 301 plan needs several improvements
Recommendations
Chapter 5: Classroom dollars
The District did not correctly report its administrative costs
Recommendation
Appendix
Agency Response
Auditor General Comments to
Agency Response
27
27
27
29
31
31
31
33
34
35
35
36
a-i
page vii
Office of the Auditor General
TABLE OF CONTENTS
20
21
8
9
9
11
15
15
28
33
Figures:
1 Food Service Expenditures
Fiscal Year 2002
(Unaudited)
2 Food Service Operating Revenues
Fiscal Year 2002
(Unaudited)
Tables:
1 District Staffing Level Comparisons
Fiscal Year 2002
(Unaudited)
2 Total and Per-Pupil Administrative Costs Comparison
Fiscal Year 2001
(Unaudited)
3 Comparison of Per-Pupil Administrative Costs by Category
Fiscal Year 2001
(Unaudited)
4 Personnel Assigned to Grant Activities in Comparable Districts
Fiscal Year 2002
5 Number of Days Administrators Were on Travel Status,
and Related Expenditures
Fiscal Year 2002
6 Number of Employees Attending Conferences
Fiscal Year 2002
7 Students Transported, Route Mileage, and Costs
Fiscal Year 2001
(Unaudited)
8 Average Per-Employee Budgeted and Actual Expenditures
Fiscal Year 2002
(Unaudited)
concluded
page viii
State of Arizona
page1
Office of the Auditor General
INTRODUCTION
& BACKGROUND
The Office of the Auditor General has conducted a performance audit of the Sacaton
Elementary School District pursuant to A.R.S. §41-1279.03.A.9. This performance
audit examines five aspects of the District's operations: administrative costs, food
service, student transportation, expenditure of sales taxes received under Proposition
301, and the accuracy of district records used to calculate the percentage of dollars
spent in the classroom.
The Sacaton Elementary School District is located in Pinal County, approximately 35
miles south of Phoenix. The District, which is in the Gila River Indian Community, is 1
of 13 Arizona school districts located on a reservation; Native Americans make up 98
percent of its student population. The District has an elementary school, serving stu-dents
in pre-kindergarten through 4th grade, and a middle school, serving students
in 5th through 8th grades. During the 2001-2002 school year, approximately 527 stu-dents
attended the District's two schools.
A five-member board governs the District and a superintendent manages it. Each
school has its own principal, who oversees the day-to-day operations. The District
has approximately 46 certified teachers, 20 instructional aides, 10 other certified
employees, such as a special education program director, and 53 classified employ-ees,
such as administrative staff.
District programs
The District conducts a wide range of instructional and extracurricular activities (see
figures on page 2). It also offers a number of school and community resources, such
as counseling and crisis intervention services, clothing and school supplies
allowances, immunization and health programs, Boys and Girls Club activities, a
School Safety Program, and GED literacy classes.
In addition, the District offered students and community members services through
the following federal grant programs:
􀁺 State Incentive Grant 1999-2002, which focused on alcohol and substance
abuse prevention and intervention.
􀁺 21st Century Learning, which provided activities that stress educational, fitness,
and leadership development.
􀁺 GEAR-UP Grant 1999-2004 provided middle school students an early aware-ness
and readiness for college through academics, guidance, and support.
􀁺 Community Technology Center 2000-2003 at the middle school, to provide Gila
River Indian Community members with a staffed facility for educational learning,
research and enrichment through computer technology.
The District is also part of the Rural Systemic Initiative, which is committed to the
improvement of science, mathematics, and technology education in rural and tribal
areas.
page2
State of Arizona
Elementary School
􀁺 Pre- and full-day kindergarten
􀁺 Computer technology class
􀁺 After-school special interests classes
􀁺 Success for All Reading and Math
Programs
􀁺 Accelerated Reader Program
􀁺 21st Century After-School Program
􀁺 Quest Diabetes Prevention Program
􀁺 After-school tutoring
􀁺 Yearbook
􀁺 Student council
􀁺 Band/music
􀁺 Parent/student nights
􀁺 Computer labs
􀁺 Gym/stage
􀁺 Media center/library
􀁺 Breakfast, lunch, and summer food
programs
Middle School
􀁺 On-site special education
􀁺 Gifted program
􀁺 Success for All Reading and
Math Programs
􀁺 Title I summer school/tutoring programs
􀁺 GEAR-UP Program
􀁺 Project Venture/State Incentive Grant
􀁺 Leadership Club, Central Junior High
League Sports, Garden Club, and
KidStar Radio Program
􀁺 Yearbook
􀁺 Student council
􀁺 Band/music
􀁺 Computer labs
􀁺 Media center/library
􀁺 Sports facilities
􀁺 Breakfast, lunch, and summer
food programs
District challenges
The District faces many challenges. For example:
􀁺 Enhancing academic achievement—In fiscal year 2001, the District’s elemen-tary
school was identified as a failing school under the school improvement pro-cess,
and the middle school followed in fiscal year 2002. Also, the District’s stu-dents’
overall standardized test scores were well below average when com-pared
with other Arizona schools.
􀁺 Achieving English proficiency—Over one-half of the District’s students were
identified as Limited English Proficient (LEP). To address this, the District has an
agreement with the Central Arizona College to prepare teachers to become ESL
(English as a Second Language) endorsed.
􀁺 Strengthening special education—In fiscal year 2001, the Arizona Department of
Education found the District’s special education program to be out of compli-ance,
so the District hired a consultant to manage the program and psycholo-gists
to test the students. Subsequently, during fiscal year 2002, the District hired
a full-time Director of Special Education to oversee the program.
􀁺 Competing with other districts for personnel��Although the District is considered
an urban district, it is still somewhat isolated when compared with other urban
districts. The District reports that this sometimes makes it difficult to hire employ-ees
or contract for service providers.
Scope and methodology
Based in part on their effect on classroom dollars, as reported in the Auditor
General’s March 2002 report, Arizona Public School Districts' Dollars Spent in the
Classroom, this audit focused on three main aspects of school district operations:
administration, food service, and transportation. Further, due to the underlying law ini-tiating
these performance audits, auditors also reviewed the District's use of
Proposition 301 sales tax monies and how accurately it accounted for dollars spent
in the classroom. In addition, as required by Laws 2002, Chapter 330, Section 54,
auditors also assessed the accuracy of district-reported administrative costs and
reported detailed information about district and school administrative personnel
duties, salaries, and related costs.
In conducting this audit, auditors used a variety of methods, including examining var-ious
records such as available fiscal year 2001 summary accounting data for all dis-tricts
and the Sacaton Elementary School District's fiscal year 2002 detailed account-page3
Office of the Auditor General
ing data, contracts, board minutes, and other district documents; reviewing district
policies and procedures; reviewing applicable statutes; and interviewing district
administrators and staff. Additionally:
􀁺 To assess the accuracy of the District's administrative costs, auditors evaluated
management controls relating to expenditure processing and tested the fiscal
year 2002 expenditures accuracy that could affect the District's administrative or
instructional expenditures. Auditors also reviewed personnel files and inter-viewed
district and school administrators about their duties, salaries, and relat-ed
costs, and compared these costs to other similar districts.
􀁺 To assess whether the District's food service program was managed appropri-ately
and functioned efficiently, auditors reviewed fiscal year 2002 food service
revenues and expenditures, including labor and food costs; observed meals
being prepared and served to students; and evaluated functions such as meal
production, purchasing and inventory control, and waste management.
􀁺 To assess whether the District's transportation program was managed appro-priately
and functioned efficiently, auditors reviewed and evaluated transporta-tion
costs, including those associated with special-needs students; driver files;
bus maintenance and safety records; and bus routing.
􀁺 To assess whether the District was in compliance with Proposition 301's
Classroom Site Fund requirements, auditors reviewed expenditures to deter-mine
whether they were appropriate, properly accounted for, and remained with-in
statutory limits. Auditors also reviewed the District's performance pay plan and
analyzed how performance pay was being distributed.
􀁺 To assess the accuracy of the District's classroom dollars expenditures, auditors
reviewed accounting records to determine whether costs were properly record-ed.
The audit was conducted in accordance with government auditing standards.
Following are the main conclusions related to the audit objectives:
􀁺 Administration—The District's administrative costs were high due to several
factors, including the number of administrators employed, the District's depen-dency
on consultants, and high administrative travel costs. In addition, the
District needs to improve its purchasing practices.
􀁺 Food service—The District could improve its food service program by review-ing
and monitoring financial management information, implementing inventory
page4
State of Arizona
management methods, and calculating and monitoring standard performance
measures. Further, the District should strengthen its policies and procedures
and have regular health inspections to ensure the safety and sanitation of its
kitchens and the food it serves.
􀁺 Student transportation—The District's student transportation program
appeared to be operating efficiently and effectively.
􀁺 Proposition 301 monies—The District spent its Proposition 301 sales tax
monies according to statute. However, the District should ensure that its plan
identifies which allowable programs the District plans to address with its monies.
Further, the District should obtain Governing Board approval of any revisions it
makes to its plan. Finally, the District should ensure it has proper documentation
demonstrating that eligible employees met performance measures before per-formance
pay monies are distributed.
􀁺 Classroom dollars—The District needs to classify expenditures accurately to
ensure compliance with the Uniform Chart of Accounts for school districts.
The Auditor General and her staff express their appreciation to the Sacaton
Elementary School District's board members, superintendent, and staff for their
cooperation and assistance throughout the audit.
page5
Office of the Auditor General
page6
State of Arizona
page7
Office of the Auditor General
CHAPTER 1
Administration
The Sacaton Elementary School District's administration costs are much higher than
other comparable districts, and the District should take steps to reduce them. The
District employs more administrators than most comparable districts and pays them
higher salaries and provides greater benefits. Costs for using consultants are anoth-er
reason for the District's high administrative costs. The District relies on consultants
to perform tasks that personnel in comparable districts tend to perform as part of
their overall responsibilities. In addition, the District overpaid one consultant by
approximately $30,000 in fiscal year 2002. Travel is another area where the District
spends much more than comparable districts. For fiscal year 2001, the District spent
$42,000 for travel—more than six times the State’s average for districts with fewer
than 1,000 students. Finally, adhering to proper procurement procedures could result
in cost savings for the District in the form of lower cost goods and services. Several
reviewed purchases revealed problems such as lack of proper documentation, fail-ure
to obtain the required number of bids, and conflict of interest.
As required by Laws 2002, 2nd Regular Session Chapter 330, Section 54, the
Appendix presents a detailed listing of the District's administrative positions, along
with the duties, salary, and benefits.
What are administrative costs?
Administrative costs are those associated with directing and managing a school dis-trict's
responsibilities at both the school and district level. At the school level, admin-istrative
costs are primarily associated with the principal's office. At the district level,
administrative costs are primarily associated with the governing board, superinten-dent's
office, business office, and support services, such as planning, research, data
processing, etc. For purposes of this report, only current administrative costs such as
salaries, benefits, supplies, and purchased services were considered.1
1 Current expenditures are those incurred for the day-to-day operation of the district. They exclude costs associated with
repaying debt, capital outlays (such as purchasing land, buildings, and equipment), and programs such as adult edu-cation
and community service that are outside the scope of preschool to grade 12 education.
On average, the District's administrative
costs per pupil were significantly higher
than comparable districts
The District's administrative costs were significantly higher than
other districts of similar size. Using an unaudited database of fis-cal
year 2001 accounting records received from the school dis-tricts
within the State, auditors selected districts that had a similar
number of schools (one to three) and students (between 400 and
600) as Sacaton Elementary School District to serve as compara-ble
districts. As noted in the Auditor General's November 2002
special study, Factors Affecting School Districts' Administrative
Costs, district type does not appear to affect administrative costs,
and therefore district type was not a primary factor in selecting
comparable districts.
As seen in Table 1, the District had twice as many administrators
than most of the comparable districts for fiscal year 2002.
Further, as seen in Table 2 (see page 9), the District's administra-tive
costs per pupil were 36 percent higher than the next compa-rable
district during fiscal year 2001. Auditors used fiscal year
2001 costs because that is the most recent fiscal year for which
the comparable districts' cost data was available.
page8
State of Arizona
Administrative costs are monies spent
for the following items and activities:
􀁺 General administrative expenses are associated
with governing boards and superintendent's offices,
such as elections, staff relations, and secretarial,
legal, audit, and other services; the superinten-dent's
salary, benefits, and office expenses; com-munity,
state and federal relations; and lobbying;
􀁺 School administration expenses such as salaries
and benefits for school principals and assistants
who supervise school operations, coordinate activi-ties,
evaluate staff, etc., and for clerical support
staff;
􀁺 Business support services such as budgeting and
payroll; purchasing, warehousing, and distributing
equipment, furniture and supplies; and printing and
publishing; and
􀁺 Central support services such as planning,
research, development, and evaluation services;
informing students, staff, and the general public
about educational and administrative issues;
recruiting, placing, and training personnel; and
data processing.
Source: Auditor General staff analysis of the USFR Chart of
Accounts.
Number of
District Name Administrators
Students
per Administrator
Sacaton ESD 24.00 23.42
Cedar USD 17.00 28.24
Gila Bend USD 12.00 41.50
Mayer USD 10.90 54.20
Ajo USD 10.60 47.55
Nadaburg ESD 8.25 56.20
Average of the comparable
districts
11.75
45.53
District Staffing Level Comparison
Fiscal Year 2002
(Unaudited)
Source: Auditor General staff analysis of the Districts’ average daily membership counts and the School District Employee
Report 30-3, as of April 4, 2002.
Table 1:
As seen in Table 3, when the District’s per-pupil administrative costs are compared
by category, Sacaton paid significantly more for benefits, purchased services, and
supplies. In some cases, these costs were more than double those of other districts.
In addition, the District’s total administrative costs are more than double the average
for all small districts, those with 200 to 600 students.
Overall the District had more discretionary monies available for administrative expen-ditures
because it receives most of its monies from the federal Impact Aid Program.
Because districts such as Sacaton and Cedar have little or no property tax base, a
page9
Office of the Auditor General
District Name
Total Administrative
Cost1
Number of
Students
Cost
Per-Pupil
Sacaton ESD $1,247,512 562 $2,220
Cedar USD 782,899 480 1,631
Gila Bend USD 560,608 498 1,126
Mayer USD 469,081 591 794
Nadaburg ESD 354,051 464 763
Ajo USD 358,096 504 711
Average of the comparable
districts
504,947
507.4
1,005
Total and Per-Pupil Administrative Costs Comparison
Fiscal Year 2001
(Unaudited)
1 To help ensure consistency among the districts, auditors excluded telephone charges from administrative costs.
Source: Auditor General staff analysis of district-reported fiscal year 2001 accounting data, and average daily membership counts obtained from the Arizona
Department of Education.
District Name Salaries Benefits
Purchased
Services
Supplies
and Other
Total
Sacaton ESD $1,126 $225 $740 $129 $2,220
Cedar USD 1,174 126 267 64 1,631
Gila Bend USD 726 178 176 46 1,126
Mayer USD 582 103 86 23 794
Nadaburg ESD 545 107 93 18 763
Ajo USD 523 89 59 40 711
Average of the comparable
districts
710
121
136
38
1,005
Comparison of Per-Pupil Administrative Costs by Category
Fiscal Year 2001
(Unaudited)
Source: Auditor General staff analysis of district-reported fiscal year 2001 district-reported accounting data and average daily membership information obtained from
the Arizona Department of Education.
Table 2:
Table 3:
large part of their Maintenance and Operation (M&O)
funding comes from the federal Impact Aid Program.
Significant budgeting differences result in these districts
getting more total revenues than statutory expenditure lim-its
generally allow them to spend. The effects of the addi-tional
revenue can be seen in the District’s fund balance.
While Sacaton has been using some money for capital
improvements, as of the end of fiscal year 2002, the
District had $7.2 million in its M&O Fund. Fiscal year 2001
expenditures from this fund totaled approximately $3.5
million. Therefore, the District could operate using its M&O
Fund for over 2 years without receiving additional rev-enues.
The District uses consultants exten-sively,
pays higher hourly rates, and
does not monitor billings
The District should take steps to control and reduce its
consultant costs. During fiscal year 2002, the District spent
over $212,000 on administrative consultants to perform
duties such as grant writing, curriculum development, and
business management functions. The District was depen-dent
on consultants because it did not make effective use
of its own staff, whose job descriptions include many of
the duties the consultants performed. Further, the District
needs to better manage the contracts it currently has in place. During fiscal year
2002, the District paid a higher hourly rate to one consultant, including $30,000 in
overpayments. The District also does not monitor its business office consulting ser-vices
contract.
The District spent over $212,000 on administrative consultants—
During fiscal year 2002, the District spent over $212,000 on three separate contracts
for administrative consultants. The contracts and amounts were as follows:
􀁺 General administrative services—The District paid a general administrative con-sulting
firm approximately $165,000. Of this amount, approximately $115,000
was for identifying potential funding sources, preparing grant applications,
assisting with grant activities management, and preparing required grant
reports. The District made $49,000 in additional payments to the consultant for
various other administrative services, including hiring a curriculum director,
preparing financial documents for federal grant programs, helping with school
improvement plans, and providing Title I program support.
page10
State of Arizona
Federal Impact Aid
Although State Equalization assistance is calculated using
the same formula for most Arizona school districts, some
districts have an additional source, Impact Aid. These
monies are meant to assist districts that have lost property
tax revenue due to the presence of tax-exempt federal land
or that have been impacted by the enrollment of children
living on federally connected land, such as children living
on reservations. Districts are required to reduce the
amount of State Equalization Assistance they receive by
the amount of their qualifying property tax levy. In con-trast,
they are not required to adjust their amount of State
Equalization Assistance for the federal Impact Aid they
receive. As a result, districts receiving Impact Aid have the
ability to receive more total revenue than they otherwise
would. However, due to statutory budgeting limits, dis-tricts
generally need to obtain voter-approved budget over-rides
or make other budget adjustments to be able to
spend these additional monies.
Although in some situations, budgeting limits may not
allow districts to spend all of their Impact Aid monies,
A.R.S. §15-962(F) gives districts the ability to budget and
accumulate for school construction, building renovation,
or soft capital purposes a portion of the prior year��s end-ing
cash balance up to the amount of Impact Aid received
during the prior year.
􀁺 Curriculum-related services—The District paid another consultant $24,169 to
work as the District's interim curriculum coordinator. The consultant was hired to
primarily work with district staff on curriculum-related issues. However, the con-sultant
also assisted with other top-level district management decisions, includ-ing
planning and program management.
􀁺 Business services—The District paid a third consultant a $24,000 fixed fee to
provide assistance to business office personnel. According to the consulting
contract, this consultant provided budgeting and long-range financial planning
assistance, assistance with proper accounting procedures; collection supervi-sion,
safekeeping, and distribution of funds; advice on business and financial
questions; and consulting and staff training on relevant topics.
By comparison, while the District was heavily dependent on outside consultants, the
comparable districts were not. Of the five districts comparable to Sacaton in size, all
had no or negligible administrative consultant expenditures during fiscal year 2002.
The District did not effectively use its own staff—The District does not fully
utilize its existing staff, making it dependent on consultants. Many of the duties the
three consulting firms performed are included in district employees' job descriptions.
Specifically:
􀁺 Grants management—When compared to five other districts of similar size,
Sacaton was the only district using a consultant to write grants and assist in the
management of grant programs. The following table (Table 4) illustrates how
grant writing, program management, and grant financial activities were delegat-ed
to staff members in each of the five comparable districts:
page11
Office of the Auditor General
District Name
Grant Writing
Program
Management
Financial
Management
Ajo USD Superintendent, Business
Manager, and School
Improvement Team
Business Manager Business Manager
Cedar USD Federal Programs Director and
Special Education Director
Federal Programs Director and
Special Education Director
Business Manager, Federal
Programs Director, and
Special Education Director
Gila Bend USD Team Comprising District
Management and Staff
Team Comprising District
Management and Staff
Business Manager
Mayer USD Special Education Director Superintendent and Principals Business Manager
Nadaburg ESD District Staff Superintendent or Teacher Business Manager
Table 4: Personnel Assigned to Grant Activities in Comparable Districts
Fiscal Year 2002
Source: Auditor General staff interviews with district officials
As illustrated in Table 4 (see page 11), all of the comparable districts were able
to delegate grant activities to existing employees without using consultants.
Further, only one of these districts delegated grant activities to a designated
grant manager. Cedar Unified indicated that it employed a federal programs
director at approximately $54,000.
Similarly, the District could delegate grant-writing responsibilities to one of its
program directors. The District employs program directors for each of its major
federal programs who are responsible for managing their respective programs
and preparing program reports. Further, several of the District's program direc-tors
have experience writing grants. Therefore, the District's program directors
could be responsible for writing grants, evaluating the operations of their respec-tive
programs, and preparing progress reports the applicable grant contracts
require. Currently the consultant contacts program directors for information con-cerning
their grant programs and accumulates the information into the required
report format. By having the program directors prepare the reports, the District
could eliminate the need for contracted grant program evaluation services.
􀁺 General management and curriculum—Many of the general management con-sulting
and curriculum development tasks that consultants performed are out-lined
in the superintendent's position description. According to the Sacaton
Board Policy Manual Qualifications and Duties of Superintendent, the superin-tendent
"… administers the development, coordination, maintenance, and eval-uation
of the educational program, including the special education program."
However, a large portion of these responsibilities has been delegated to con-sultants.
For example, the Arizona Department of Education required the District
to work with an approved school improvement coordinator when one of the
District's schools was found to be performing below state minimum standards.
The District paid its general administrative consultant to work with this school
improvement coordinator to develop and implement a school improvement
plan. In addition, the District contracted with a separate consultant to coordinate
curriculum and manage the operations of the District's two schools. In a small
district such as Sacaton, these duties may fall within the scope of the superin-tendent's
responsibilities.
􀁺 Business office—Many of the duties outlined in the third consultant's contract
were included in the District’s business manager’s job description. This con-sulting
agreement provided that the consultant assisted with budget develop-ment,
provided assistance with proper accounting procedures, and advised
administrative staff on business and financial questions. These same activities
were also included in the business manager’s job description. However, it
appeared in this case that the District knowingly hired a person to fill this posi-tion
with the understanding that the person would need a consultant’s assis-page12
State of Arizona
tance to perform the duties. When the District hired the business manager in
2001, it selected the candidate with the least amount of education and experi-ence
of the six applicants interviewed. At that time, the superintendent told the
Governing Board that the District would require the services of the consulting
firm if the least qualified candidate was offered the position. However, the District
did not estimate the cost of such a decision prior to hiring the least qualified
candidate. During 2002, the District paid a fixed fee of $24,000 for these con-sulting
services.
Need for better contracts management—In addition to reducing its depen-dency
on consultants, the District needs to better manage the consulting agree-ments
it currently has in place. The contract with the general administration consul-tant
calls for billing grants management services at a flat rate of 7.5 percent of the
grant monies the consultants obtained on the District’s behalf of the District. Most of
these grants are multi-year grants. However, according to the contract, the District
must continue to pay the 7.5 percent fee each year it receives funding, regardless of
the amount of services the consultant provides to the District. As a result, the District
pays a high hourly rate for services actually received. For example, during fiscal year
2002, the District paid approximately $115,000 for 556 hours of grants management
services, which equates to an hourly rate of about $207. In addition, the consultant
also performed 681 hours of general management consulting services, such as cur-riculum
improvement, at a cost of over $45,000, or $75 per hour.
While the District pays from $75 to over $200 per hour for these services, another
school district that contracts with the same consultant negotiated an hourly rate of
$62.50 for similar services. If the District had negotiated this same rate, it could have
saved over $80,000 for the grant management services.
The District overpaid the administrative consultant by over $30,000—
The District's failure to properly manage the general administrative services contract
resulted in overpayments totaling $30,038 in fiscal year 2002. According to the con-tract,
the District is required to pay the consultant 7.5 percent of the revenues actu-ally
received from the grants that the consulting firm obtained for the District.
However, the consultant has instead billed the District for 7.5 percent of the budget-ed
grant revenues, which have been higher than the amounts the District actually
received.
According to district management, they were unaware of the consulting contract's
specific terms and of the process that the consultant used to determine billing
amounts. As a result, the District paid the consulting firm the full amounts billed.
Lack of contract management extends to other contracts—The
District's need for better contracts management is not limited to its contract for grant
writing and administrative assistance. For example, the District's general business
page13
Office of the Auditor General
consulting contract called for payment of a $24,000 flat annual rate instead of being
billed for services provided. The District did not monitor the contract to ensure that it
received an appropriate amount of services for the amount paid to the contractor.
Recommendations
1. The District should better manage existing personnel to reduce its dependence
on consultants. For example, the District should delegate grant writing respon-sibilities
to one of its program directors, and it should ensure that its business
manager can perform all required job duties.
2. The District should revise its hiring practices to ensure the most qualified person
is hired.
3. The District should evaluate its contracts more carefully to ensure that it obtains
the desired services at a reasonable cost. Contract rates and amounts should
be compared to those of similar districts.
4. The District should recover the $30,000 overpayment it made to the general
administrative consulting firm for grant writing services received in fiscal year
2002.
5. The District should be familiar with its contracts terms and thoroughly review
billings to ensure that contractors are not overpaid. In addition the District should
ensure that it pays contractors only for services they have actually provided.
The District’s $42,000 administrative travel costs far
exceeded peer districts’ average of $6,600
The District should better manage its administrative travel costs, including limiting
travel to essential conferences and seminars that will most benefit the District, and
requiring documentation before paying travel costs. The District spent $42,629 for
administrators and governing board members to travel to conferences and meetings
during fiscal year 2002. By contrast, the other 93 Arizona school districts with fewer
than 1,000 students averaged only $6,626 in administrative travel costs. The District's
administrative travel costs are high for several reasons. Specifically:
􀁺 Frequent trips—As seen in Table 5 (see page 15), several administrators travel
frequently. Besides increasing travel costs, these staff are absent from their
duties for a significant amount of time.
page14
State of Arizona
page15
Office of the Auditor General
􀁺 Multiple attendees—The District sends several people to the same conferences.
Table 6 shows the conferences that three or more administrative employees
and/or board members attended:
􀁺 Last-minute changes—Auditors identified three instances during 2001 when
district employees or board members changed travel plans at the last moment
resulting in either additional charges for air fares or forfeited expenditures. These
last minute changes cost the District approximately $1,140.
In addition to having high administrative travel costs, most of the District’s adminis-trative
travel expenditures were not supported by adequate documentation. For
many of the expenditures, no appropriate documentation such as receipts or invoic-es,
was provided. Further, administrative staff rarely provided documentation such as
certificates for professional development hours or conference materials showing that
Administrator
Days on
Travel Status
Travel
Expenditures
Superintendent 32 $ 6,302
21st Century Grant Director 27 5,560
GEAR-UP Grant Director 16 1,085
Business Manager 16 3,126
Total 91 $16,073
Number of Days Administrators Were on Travel Status
and Related Expenditures
Fiscal Year 2002
Source: Auditor General staff analysis of district fiscal year 2002 travel and payroll records.
Table 5:
Number
Attending
Conference
Conference
Location
6 Fall 2001 National Association of Federally Impacted Schools Conference Washington, D.C.
5 Arizona State Impact Aid Association Conference Pinetop
4 National School Board Association 62nd Annual Conference New Orleans
4 Legal Perspective 2001—Arizona School Boards Association Tempe
3 Arizona School Personnel Administrators’ Association Conference Prescott
3 National Indian Impacted Schools Association Conference Seattle
3 Summer Leadership Institute—Arizona School Boards Association Flagstaff
3 Fall 2001 Workshop—Arizona Association of School Business Officials—
Student Attendance
Phoenix
Table 6: Number of Employees Attending Conferences
Fiscal Year 2002
Source: Auditor General staff analysis of district travel records for fiscal year 2002.
page16
State of Arizona
they actually attended the conferences. Although the District's travel policy requires
documentation, it pays travel claims without it. This appears to occur because most
expenses are charged to the District's credit card and the superintendent and board
members are among those not following the policy.
Recommendations
1. To reduce its administrative travel costs, the District should:
􀁺 Consider the costs and benefits of sending staff to a conference. Travel
should be limited to conferences and seminars that help the District achieve
its goals and objectives.
􀁺 Limit the number of employees attending a given conference to the key staff
members who need to attend.
􀁺 Require travelers to justify or personally pay for any changes to travel
arrangements that cost the District additional money.
2. To ensure that all travel expenses are reasonable and allowable, the District
should require travelers to submit proper documentation. Even when expenses
are placed on the District's credit card, travelers should be required to submit
supporting documentation, such as receipts and invoices. Further, the superin-tendent
and board members should also abide by the District's travel policy.
The District does not follow proper purchasing practices
and allowed a potential conflict of interest
The District did not follow the procurement procedures required by Arizona Revised
Statutes and the purchasing procedures outlined in the Uniform System of Financial
Records for Arizona School Districts. Based on a review of district purchases, audi-tors
found problems ranging from lack of supporting documentation to a potential
conflict of interest. The District's independent financial auditor also cited the District
for failing to comply with state procurement laws. In addition to following the law, the
District could realize cost savings as competitive procurements may result in lower
prices for the goods and services that the District buys.
􀁺 Lack of documentation—None of the 12 fiscal year 2002 purchases reviewed
had adequate documentation to support the District's purchasing decisions. For
example, the District did not document obtaining written competitive quotations
when it purchased over $25,000 worth of computer equipment. For a separate
purchase the District had no supporting documentation on file. Instead, the
District gathered other vendors' pricing information after the auditors' request
was made for the competitive quotes.
􀁺 Unfamiliarity with vendor selection procedures—Auditors found that district staff
were unaware of what methods they should use when selecting vendors. For
example, the District purchased $60,723 in computer equipment from a single
vendor without obtaining competitive sealed bids. District staff indicated that
they were unaware that the purchase was subject to competitive sealed bidding
requirements.
􀁺 Potential conflict of interest—Several purchases the District made from one
company involved a potential conflict of interest. Specifically, a district adminis-trator
initiated ten purchases totaling $12,132 from her daughter's catering busi-ness.
The administrator was allowed to initiate and/or approve these purchase
orders. Further, the District did not disclose the relationship between the vendor
and the district administrator, and the District did not require its administrative
staff to prepare conflict-of-interest statements as the law requires.
The District's independent auditor reported a number of similar concerns regarding
the procurement process in the fiscal year 2001 audit of the District's financial state-ments,
as well as previous years' audit reports. However, the District has not yet taken
corrective action in its procurement processes.
Recommendation
District staff with purchasing authority should be adequately trained in purchasing
procedures in accordance with Arizona Revised Statutes and the Uniform System of
Financial Records for Arizona School Districts, including:
􀁺 Maintaining proper purchasing documentation.
􀁺 Ensuring proper vendor selection methods are used.
􀁺 Documenting any conflicts of interest for each purchase and ensuring that the
employees with conflicts of interest are not involved in authorizing those pur-chases.
page17
Office of the Auditor General
The District’s Governing Board meetings were cancelled
or postponed without proper notice
On four different occasions in less than 2 months, governing board meetings were
canceled or postponed without notice. In addition, the meetings that were held
began at least 30 minutes later than the scheduled start times.
During a special Governing Board meeting that had been scheduled several weeks
in advance, board members voted to table all agenda items because the District’s
administrators had not given them the board information packet until the day of the
meeting. Therefore, the board members did not have sufficient time to analyze the
information and make decisions.
Recommendations
1. The District should strive to promote public participation in governing board
meetings by consistently meeting at scheduled times.
2. To ensure that the board receives all necessary information to make informed
decisions in a timely manner, District management should provide board mem-bers
with the information packets at least several days prior to a board meeting.
page18
State of Arizona
page19
Office of the Auditor General
Food service
The Sacaton Elementary School District should take steps to ensure its food service
program functions efficiently and effectively. Auditors reviewed the overall operations
and management of the District's food service program, including observing kitchen
facilities and lunch service, analyzing revenues and expenditures, and reviewing poli-cies
and procedures. The District did not effectively manage its food service opera-tions
because it did not perform some basic oversight duties, such as compiling and
analyzing financial reports, ensuring that it properly manages inventory, and calcu-lating
common food service performance measures. In addition, the District could do
more to ensure that proper food safety and sanitation measures are taken.
Background
The District's food service program serves both a middle school and
an elementary school on a single campus, utilizing a program super-visor,
along with five permanent kitchen staff and two temporary food
servers.
During fiscal year 2002, the District served breakfast, lunch, and a
snack to approximately 180 middle school and 300 elementary stu-dents.
During that same fiscal year, the District cooked and served
meals at both of its schools. However, in August 2002, the District
moved to a centralized-kitchen concept. As part of the centralized
kitchen, food was cooked at the elementary school, and the middle
school's meals were transported to the middle school using food
carts and a cargo truck. The District's food service program operat-ed
year-round, both during the regular school year and also during
the summer school program.
CHAPTER 2
Food service facts for
Fiscal Year 2002
Students participating 480
Average cost per meal $2.84
Number of meals served:
Breakfast 35,860
Lunch 79,662
Total 115,522
Kitchens/cafeterias 2
Number of staff 7
Total revenues $102,227
Total expenditures $276,750
Percentage of students
eligible for free and
reduced price lunches 65%
page20
State of Arizona
The District purchased bulk food items, commodity foods, and supplies, such as
cooking tools and disposable eating utensils, through a contract with the
Aspin/Mohave Consortium. The District estimated that approximately 40 percent of
its food inventory consisted of USDA commodity foods that required further pro-cessing,
such as meats, cheeses, and flour. This helped cut the costs of the food
service operation since the District receives the commodities for free and pays only
$3.50 per case for shipping and storage.
As shown in Figure 1, salaries and benefits costs represented 47 percent of the food
service program expenditures, which totaled approximately $277,000 for fiscal year
2002. Food purchases were another 40 percent of that total.
Although only 65 percent of the District's students qualified for free or reduced-price
lunches under the National School Lunch Program, the District had decided not to
charge any of its students for their meals. However, the District was only reimbursed
for the students who qualify for the program. In addition, district staff or other adults
purchased meals for $2 each.
Figure 1: Food Service Expenditures
Fiscal Year 2002
(Unaudited)
Source: Auditor General staff analysis of district fiscal year 2002 accounting records.
Purchased
Services
$6,451 Salaries and
Benefits
$130,518
Food
$110,382
Equipment
$21,240
Supplies
$8,159
As seen in Figure 2, federal reimbursements such as those from the the National
School Lunch Program and the School Breakfast Program, totaling approximately
$96,000 for fiscal year 2002, comprised the largest portion of the program's operat-ing
revenues. The program's total operating revenues only pay for about 43 percent
of food service expenditures. Therefore, the District must subsidize the program with
other district monies. During fiscal year 2002, the program received approximately
$160,000 in subsidies, including over $124,000 from the Gila River Indian Community
Donation (GRIC) Fund. Another $6,000 of the monies used to subsidize the program
came from the District's Maintenance and Operation Fund. These monies could have
been used in the classroom if they had not been needed for food service. If the
District had not had the monies from the GRIC Fund available, even more money
may have had to be taken from the classroom.
The District did not effectively manage its food service
program
The District did not effectively manage its food service program because it did not
perform basic management oversight functions, such as monitoring financial infor-mation
and implementing inventory management methods. As a result, the District
page21
Office of the Auditor General
Figure 2: Food Service Operating Revenues
Fiscal Year 2002
(Unaudited)
Maintenance
and Operation
2%
Federal
Reimbursements
35%
Other
6%
Gila River Indian
Community Donation
45%
Adult
Meals
2%
Capital
Outlay
8%
Title 1
2%
Source: Auditor General staff analysis of district fiscal year 2002 accounting records.
did not have sufficient information to make important decisions, such as whether to
centralize its cooking operations, and to identify and correct problems, such as
inventory waste or abuse. In addition, the District's food service program lacked per-formance
measures to guide the District in determining if the program was running
efficiently and effectively.
The District did not perform basic management oversight duties—
The District did not perform typical management oversight functions, such as prepar-ing
and reviewing financial management reports and managing inventory. Despite
the fact that the food service program operated at a deficit, the District did not pre-pare
periodic reports for use in managing the program, such as reports comparing
food service budgeted amounts to actual expenditures. As a result, district staff pur-chased
food and other supplies without knowing the food service program's budget
limitations or the current status of program expenditures. Performing basic manage-ment
oversight functions could help reduce the program's operating deficit and
increase the program’s effectiveness and efficiency.
Further, without adequate financial management information, the district did not have
a sound basis for decision-making because it did not have the information needed
to conduct standard analyses, such as a cost-benefit evaluation. For example:
􀁺 The District centralized its cooking operations in August 2002 under the premise
of increased efficiency and lower costs. However, the District did not conduct
any type of formal analysis before centralizing its cooking operations. In fact, this
decision cost the District approximately $32,000 for a truck and insulated food
carts. Specifically, the District moved all of its cooking operations to its elemen-tary
school. To transport the cooked food the short distance from the elemen-tary
to the middle school, the District purchased a large delivery truck and six
insulated food carts at an approximate cost of $32,000. Despite these purchas-es,
one food service employee reported that food typically arrived at the middle
school cold and had to be reheated. Performing a cost-benefit analysis and tak-ing
into account factors such as staffing needs, food quality, and the costs of a
new truck could have demonstrated whether this was an efficient and effective
manner of cooking student meals before the additional expenditures were
made.
􀁺 Because it did not want to repair broken dishwashers, the District began using
disposable plates, knives, forks, and spoons. Although using disposable
kitchenware may be appropriate, the District did not perform any type of analy-sis
to determine whether this decision was the most economical means for serv-ing
food. Further, the District had made no provisions for disposing of its idle
dishwashing equipment.
Besides managing financial operations, the District should be managing critical
expenditures, such as food purchases. The District lacked procedures for the receipt,
delivery, storage, and usage of food inventory. For example, once staff members had
page22
State of Arizona
page23
Office of the Auditor General
purchased food and other supplies, they did not have standard methods for ensur-ing
that the District had received the proper products in the correct amounts. In addi-tion,
the District did not use its food items according to the first-in-first-out inventory
method and did not keep physical inventory lists. Further, auditors observed food
items that could not be easily accessed or rotated because storage areas in both
schools were overcrowded. In fact, some food items were stored directly on the floor
in crushed boxes while others were stored in the refrigerator in open containers. Lack
of appropriate inventory management practices can result in oversupplies of food
and makes the District's food inventory vulnerable to spoilage and even theft.
The District lacked performance measures to help guide the pro-gram—
The District's ability to properly manage its food service function is further
hindered by the absence of program performance measures. The District did not col-lect
data and calculate common food service performance measures, such as meals
per labor hour and cost per meal. Calculating and monitoring these performance
measures could help the District determine important information, such as whether it
has the correct number of staff and whether its food costs are appropriate. Without
such performance measures, the District could not compare its operations to estab-lished
industry benchmarks or to other similar school districts to evaluate whether
improvements were needed.
Recommendations
1. To ensure that the District has sufficient information to manage its food service
program and make sound decisions, the District should conduct typical man-agement
oversight activities. Specifically, the District should:
􀁺 Implement financial management procedures, including monitoring the
food service program's comparison of budget and actual expenditures.
􀁺 Perform cost-benefit analyses prior to making large expenditures.
2. To help reduce the potential for waste and abuse and to ensure that adequate
control over inventory is maintained, the District should implement inventory
management procedures, including:
􀁺 Managing inventory on a first-in-first-out basis, including regular rotation of
food items so that the oldest items are used first.
􀁺 Establishing receiving procedures for items ordered, including assigning an
authorized person to receive and check deliveries.
page24
State of Arizona
􀁺 Establishing inventory tracking and documentation procedures, including
physical inventory counts, reorder points, and monthly inventory reconcilia-tion
procedures.
3. To assist the District in determining the efficiency and effectiveness of its food
service program, the District should identify, document, and monitor program
measures, such as meals per labor hour and cost per meal, and compare them
with similar districts or industry standards.
The District did not take sufficient action to ensure the
safety and sanitation of its food service operations
The District's failure to ensure a safe and sanitary work environment in which to pre-pare,
serve, and store food places students' and district staff's health at risk. Auditors
identified several safety or sanitation issues while observing the District's food service
operations. Specifically:
􀁺 None of the District's food service workers had current county health cards and
only one worker had a current food handler's card.
􀁺 Food storage temperatures exceeded the recommended ranges for frozen
foods as well as foods kept in dry storage.
􀁺 Food temperatures in the serving line were not monitored to ensure proper tem-peratures
were maintained.
􀁺 One refrigerator contained foods that were kept beyond their "use by" dates.
􀁺 Both food preparatory areas were cluttered with various items, such as paper,
chewed gum, half-eaten food, and the food service workers' personal effects.
In addition, the District did not obtain a sufficient number of health inspections, which
potentially placed the health and safety of its students and staff at risk. Further, fail-ure
to obtain inspections could result in loss of the District's funding from the National
School Lunch Program (NSLP). According to the NSLP's guidelines, districts receiv-ing
program monies must receive a health inspection at least twice a year to ensure
that they meet federal and local health regulations. However, the District's food ser-
vice operating areas have not been inspected since February 2001. Because the
District is located on reservation land, the Gila River Indian Community was respon-sible
for conducting these inspections. However, the District was also responsible for
informing the community of its inspection needs.
Recommendations
1. To ensure a safe and sanitary work environment in which to prepare, serve, and
store food, the District should ensure that:
􀁺 All food service workers have current food handler and health cards.
􀁺 Food storage areas are maintained at the proper temperatures.
􀁺 The temperatures of foods on the serving line are monitored to ensure
proper temperatures.
􀁺 "Use by" dates of food items are tracked and all outdated foods are dis-posed
of.
􀁺 Food preparation areas are clean and do not contain items that could com-promise
the sanitation of food being prepared.
2. To further ensure the sanitation of the work environment and the safety of its stu-dents
and staff, as well as continued funding from the National School Lunch
Program, the District should obtain health inspections at least twice per year.
page25
Office of the Auditor General
page26
State of Arizona
page27
Office of the Auditor General
Student transportation
The District's transportation function appears to be generally operating efficiently and
effectively. Auditors reviewed various aspects of the District's student transportation
function, such as routes and route mileage, bus maintenance, and staff qualifica-tions,
with the goal of determining whether the District provided safe, and efficient
student transportation in a timely manner. Based on this review, auditors determined
that the District's transportation costs are reasonable and that it effectively managed
its bus routes, reported route mileage, and ensured student safety.
Background
The District transported students to and from its two schools
located on the same campus in Sacaton. A transportation
supervisor, nine bus drivers, two special education bus
aides, and one mechanic staffed the District's transportation
program. During fiscal year 2002, the District reported that
510 of its approximately 527 students were eligible for trans-portation
services. In addition to its nine regular bus routes,
the District operated two routes specifically to transport its
special needs students.
The District's transportation costs, routes,
and reported route miles are reasonable
During fiscal year 2001, the District's student transportation
costs appeared reasonable given the number of route miles
driven and students transported. To determine whether the District's costs were
appropriate, auditors compared it with other districts having a similar number of route
CHAPTER 3
Transportation facts for
Fiscal Year 2002
Riders 510
Bus drivers 9
Aides 2
Regular routes 9
Special-needs routes 2
Average daily route miles 792
Total route miles 139,490
Total non-capital expenditures $297,123
page28
State of Arizona
miles driven and a similar number of student riders, including regular and special-needs
riders. Fiscal year 2001 data was used for this comparison because it was the
most recent fiscal year for which comparable districts had data available.
As illustrated in Table 7, the District's costs are higher than two of the three other dis-tricts
that had a similar number of route miles. However, the District transported sev-eral
more special needs students than Round Valley. Transporting special-needs stu-dent
riders requires separate buses and bus routes as well as additional staff to
assist them in getting to and from school. Thus, these are inherently higher cost ser-vices
to provide. Also, the District had to transport some of its special-needs students
to an accommodation school outside of its geographic area. This may explain why
the District had higher transportation costs than Mayer, which only transported its
students within its district.
The District's routes appeared efficient and effective. Although the routes had not
been changed significantly in past years, the District had made some adjustments to
make the routes more efficient. For example, some stops along the routes were rear-ranged
in a more logical order to minimize the amount of time students must be on
the bus. The District's shortest regular route was approximately 9.6 miles long, while
its longest regular route was about 41 miles. Depending on how far from the District
they live, students spent anywhere from 50 minutes to 1 hour and 25 minutes to get
to or from school.
The District also appropriately accounted for its route mileage. A district's current year
transportation funding is based on the number of route miles driven the previous
school year. Therefore, it is important that districts develop a mechanism for accu-rately
reporting these miles to the Arizona Department of Education. The District
tracked its route miles by requiring its bus drivers to record beginning and ending
odometer readings on a log every time they drove a bus route. From these logs, the
District's transportation supervisor calculated the average daily mileage for each
District
Regular
Riders
Special-
Needs
Riders
Total
Route
Miles
Total
Expenditures
Cost
Per
Rider
Cost
Per
Mile
Colorado River UHS 509 21 140,207 $403,817 $762 $2.88
Sacaton ESD 515 19 151,615 383,601 718 2.53
Round Valley USD 568 5 195,275 332,776 581 1.70
Mayer USD 502 17 129,036 198,166 382 1.54
Table 7: Students Transported, Route Mileage, and Costs
Fiscal Year 2001
(Unaudited)
Source: Auditor General staff analysis of Arizona Department of Education fiscal year 2001 district route mileage reports and
and district-reported fiscal year 2001 accounting data.
page29
Office of the Auditor General
route. This information was then used to calculate total route mileage driven by the
District for the first 100 days of the school year and to estimate what the route mileage
would be for the remaining 75 days. Auditors reviewed the district's route mileage
logs and verified that the District's reported route mileage was accurate based on the
drivers' logs.
The District maintained and followed appropriate policies
and procedures to ensure the safety of student riders
The District adopted appropriate policies and procedures and took other steps to
ensure the safety of the students it transports. Specifically, the District adopted stu-dent
transportation policies and procedures that were consistent with state and fed-eral
law, such as the minimum standards for school buses and school bus drivers
set forth in administrative code. In addition, the District kept sufficient records to
demonstrate that it was in compliance with applicable laws. For example, auditors
verified that the District kept documentation demonstrating that each of its bus
drivers had received required physical examinations, drug and alcohol testing, and
training. Further, the District kept documentation on repairs and maintenance for
each of its buses, including records of daily bus inspections performed by the bus
drivers before they began driving their routes and any accidents that involved its
buses. Since 2000, district buses were involved in three accidents and no students
were injured.
In addition to adopting policies and procedures that address safety factors, the
District undertook other measures, such as disciplinary guidelines, to ensure student
safety. The District's disciplinary guidelines clearly set out the rules that students were
expected to follow. For example, the rules prohibited behaviors such as fighting or
carrying weapons or weapon-like items. The consequences of violating the District's
bus rules ranged from a verbal warning to suspension to revocation of bus-riding
privileges. To identify and discipline students who violate bus rules, the District used
four video cameras that were rotated periodically among its buses.
page30
State of Arizona
page31
Office of the Auditor General
Proposition 301 monies
In November 2000, voters passed Proposition 301, which increased the state-wide
sales tax to provide additional resources for education programs. The District spent
its portion of the monies in accordance with statute. In this first year, the District spent
all of its Proposition 301 monies on salaries and benefits, an approach the law allows.
However, the District should ensure that it has adequately documented that eligible
employees met performance measures before performance pay monies are dis-tributed.
In addition, the District should ensure that the menu options portion of its
Proposition 301 plan specifies which options the District intends to address with
these monies, and the District should obtain governing board approval of any revi-sions
it makes to the plan.
Background
In approving Proposition 301, voters increased the state-wide sales tax by six-tenths
of 1 percent for 20 years. Under statute, after allocations for ten state-wide educa-tional
programs such as school facilities revenue bonds and university technology
and research initiatives, the remainder of the revenue goes to the Classroom Site
Fund. The monies districts receive from this fund are to be spent in specific propor-tions
for three main purposes: teacher base pay increases, teacher performance pay,
and certain menu options. The options include reducing class size, providing
dropout prevention programs, and making additional increases in teacher pay.
District's Proposition 301 plan
A panel consisting of administrators and teachers developed the District's
Proposition 301 plan and it was formally approved by the Governing Board. The
District was budgeted to receive approximately $178,000 in Proposition 301 monies
for fiscal year 2002, and as of fiscal year-end, the District had received approximate-ly
$133,000.
CHAPTER 4
page32
State of Arizona
Base pay increases—The District's base pay increases, averaging approximate-ly
$700 per employee, were built into the salary schedule at the beginning of the year,
and the increases were also written into each eligible employee's contract. Base pay
increases were to be paid to employees throughout the year in their regular pay-checks.
Performance pay—As with base pay increases, any employee on the certified
salary schedule was eligible for performance pay, given they met the specific perfor-mance
measures. The elementary and middle school principals were responsible for
evaluating and scoring their employees on each performance measure. The amount
of performance pay each eligible employee received based on these scores was
paid out in a lump sum at the end of the school year. The District's performance pay
plan consisted of the following components:
􀁺 Teacher attendance bonus (5 percent)—Eligible employees must have used 12
hours or less of sick time during the year.
􀁺 Effective evaluations (20 percent)—Eligible employees must have scored an
overall rating of at least "effective" on their annual evaluation and had no correc-tive
action plans in place.
􀁺 Stipends (25 percent)—Employees were eligible if they served as a mentor
teacher, grade-level representative, or committee chairperson.
􀁺 District, school, and individual goals (50 percent)—Eligible employees must
have met their individual goals of improving parent contact and classroom man-agement.
In addition, the District must have met its goal of improving Stanford
9 reading test scores, and the two schools must have implemented a program
to improve student attendance.
Menu options—Statute allows school districts to choose among six different
options for allocating the menu option monies, including:
􀁺 AIMS intervention programs
􀁺 Class size reduction
􀁺 Dropout prevention programs
􀁺 Teacher compensation increases
􀁺 Teacher development
􀁺 Teacher liability insurance premiums
Despite these choices, the District’s plan for menu options money was aimed at help-ing
reduce disruption to student learning. Thus, the plan proposed to increase sub-stitute
pay, hire one full-time substitute teacher for each school site, compensate
teachers for lost preparation time, and provide a sick leave buy-back option. In the
end, the District did not use its menu options monies for this purpose, but instead,
used these monies to pay for additional teacher compensation.
Proposition 301 monies distribution—Under the District's fiscal year 2002
plan, all staff members on the certified salary schedule, including approximately 45
teachers, 4 counselors, and 1 librarian, were eligible to receive Proposition 301
monies. As seen in Table 8 below, eligible employees received, on average, approx-imately
$2,600 each, and the District's expenditures, by fund, were within allowable
budgeted expenditures. Most eligible employees received less Proposition 301
monies than was possible because they did not meet all of the criteria required in
order to receive additional performance pay. For example, some employees did not
meet the criteria for serving as a mentor, grade-level representative, or committee
chairperson. Additionally, many employees used more than 12 hours of sick time
during the school year.
The District’s Proposition 301 plan needs several
improvements
The District should take steps to improve its Proposition 301 plan. First the District
should ensure that all performance goals are thoroughly documented and are mea-surable
and attainable before performance pay is distributed to eligible employees.
In addition, the District should ensure that its plan specifies which of the statutorily
allowable programs the menu option expenditures will be addressing. Finally, the
District should ensure that its governing board approves all revisions to the plan.
page33
Office of the Auditor General
Category Budgeted Actual
Base Pay $ 713 $ 701
Performance Pay 1,425 587
Menu Options 1,425 1,306
Total $3,563 $2,594
Table 8: Average Per-Employee Budgeted and Actual Expenditures
Fiscal Year 2002
(Unaudited)
Source: Auditor General staff analysis of the District’s fiscal year 2002 budget, accounting records, and other sup-porting
documentation.
page34
State of Arizona
Performance pay measures—When disbursing employee performance pay,
the District did not retain supporting documentation to demonstrate that eligible
employees met performance measures prior to receiving performance pay increas-es.
Further, the District’s performance measure requiring increased Stanford 9 read-ing
scores for fiscal year 2002 could not actually be measured until after the District
distributed performance pay; the Stanford 9 test scores were not available until after
the payment date. In addition, although each principal completed a “Performance
Score Card” for each eligible employee, the District could only supply documenta-tion
for two of the stated six goals: teacher attendance and evaluations. The District
could only provide partial support or no support at all for measuring the remaining
four goals.
Menu options plan—The District’s plan for its menu options monies did not spec-ify
which of the six allowable options the District intended to address with these
monies. In addition, although it eventually spent its menu options monies on allow-able
items, the District did not obtain governing board approval for spending the
monies for other than the specified purpose. The District built into its salary schedule
and employee contracts over twice the base pay increases that were budgeted in its
Proposition 301 Plan. To compensate for this shortfall, the District used its menu
options monies to fund the base pay increases promised in employee contracts.
While additional teacher pay was an allowable use of the menu options money, the
District did not obtain its governing board’s approval to spend the monies for this
purpose.
Recommendations
1. The District should revise its performance pay plan and/or the related disburse-ment
dates to ensure that all goals are measurable and attainable before the
pay is distributed. Further, the District should implement policies and procedures
to ensure that each performance requirement is measured and the results are
documented.
2. The District should ensure that the plan addresses only those allowable options
provided in statute.
3. The District should obtain governing board approval of any revisions to its
Proposition 301 plan.
page35
Office of the Auditor General
Classroom Dollars
A.R.S. §41-1279.03.A.9 requires the Auditor General to determine the percentage of
every dollar that Arizona school districts spend in the classroom. Additionally, Laws
2002, 2nd Regular Session, Chapter 330, Section 54, requires the Auditor General to
analyze school district administrative costs. Because of these requirements, auditors
reviewed the District's recording of classroom and administrative expenditures to
determine their accuracy.
The District did not correctly report its administrative
costs
The District did not accurately classify its fiscal year 2002 expenditures in compliance
with the Uniform Chart of Accounts for school districts. As a result, its financial reports
did not accurately reflect its costs, including both instructional and administrative
expenditures. For example:
􀁺 Salaries for three employees were recorded as administrative expenditures,
although half of their activities should have been classified as instruction. As a
result, administrative expenditures appeared higher than they should have been,
and instruction expenditures appeared lower by the same amount.
􀁺 The District incorrectly classified payments to a consulting firm as student sup-port
services. Many of the activities the consultant performed were administra-tive
in nature; therefore the District should have classified a portion of the expen-ditures
as administrative costs.
􀁺 Expenditures totaling approximately $122,000 for tuition paid to another district
were also incorrectly classified. These expenditures were not recorded to the
required level of detail. As a result, the District's instruction expenditures were
overstated.
CHAPTER 5
page36
State of Arizona
As a result of all of the errors noted, the District overstated its fiscal year 2002 instruc-tion
expenditures by $95,538 and understated its administrative expenditures by
$82,590. Correcting these errors decreased the District’s classroom dollar percent-age
by 0.7 percent. The District’s corrected classroom dollar percentage for fiscal
year 2002 was 43.9 percent. The State’s average for that year was 58.2 percent.
Recommendation
The District should classify all transactions in accordance with the Uniform Chart of
Accounts for school districts.
Office of the Auditor General
a-i
APPENDIX
State of Arizona
page a-ii
Office of the Auditor General
page a-iii
Position FTE Duties Salary Benefits
District Administration
Superintendent 1 Administered board policies and provided leadership to the
school district
$86,491
(included $4,000 in
tax-sheltered
annuities)
$ 12,530
(includes a $4,000
allowance for life
and short-term
disability insurance)
Director of Special
Services
1 Planned, organized, and coordinated special education, and
services 53,431 5,524
Finance Director 1 Directed business office functions and managed the District’s
finances 49,787 5,147
Drug Prevention and
School Safety
Coordinator
1 Administered the District’s safe school and drug prevention
programs
49,628 5,131
21st Century Project
Director
1 Provided instructional leadership to grades 3 through 5 and
administered the 21st Century Grant Program 47,236 4,884
CTC
Director/Instructor
0.5 Provided technology and training to extend student academic
engagement time, provided adult and continuing education, and
expanded technology into the home 22,000 2,275
Technology Director 1 Managed the District’s technology resources 44,000 4,549
Project Director
(GEAR-UP)
0.5 Administered the GEAR-UP Grant Program for the purpose of
ensuring that middle and secondary students were prepared to
succeed in post-secondary education 18,953 1,960
Administrative
Assistant to the
Board and
Superintendent
1 Relieved the Board and superintendent of paperwork and other
impediments
27,726 2,866
Administrative
Assistant to the
Finance Director
1 Assisted the finance director with the District’s operation by
relieving her paperwork and routine tasks
25,917 2,679
Bookkeeper 1 Assisted with the administration of the District’s business affairs 25,314 2,617
Payroll Clerk 1 Performed payroll and support duties related to the operation of
the business office
22,298 2,305
Personnel Clerk 1 Assisted with the planning and operation of the personnel
services office
20,488 2,118
Warehouse Clerk 1 Managed the District’s inventories and performed receiving
functions
19,926 2,060
Special Education
Secretary
1 Assisted the special education staff and contractors who
provided special education services
19,365 2,002
Appendix Administrative Positions, Duties, Salaries, and Benefits
Fiscal Year 2002
(Unaudited)
(continued)
page a-iv
State of Arizona
Position FTE Duties Salary Benefits
School Administration
Middle School
Principal
1
Planned, organized, and directed school staff and resources 63,000 10,514
(includes $4,000 for
dependent health
coverage)
Elementary School
Principal
1 Planned, organized, and directed school staff and resources
51,300 5,304
School Secretary 2.5 Assisted the principal and staff in dealing with students, parents,
administrators, and community members
23,052
18,992
13,611
2,384
1,964
1,407
Teaching Center
Assistant
0.5 Provided technology and training to extend student academic
engagement time, provided adult and continuing education, and
expanded technology into the home 10,847 1,122
Health insurance payments not separately identified by
employee 87,249
TOTAL 19 1 $713,362 $168,591
Appendix (concluded)
1 This number differs from the 24 total used for comparative analysis within the report. For comparative purposes, auditors used the only state-wide
data available, the School District Employee Report, which is self-reported by districts to the Arizona Department of Education. The School
District Employee Report groups both administrative and non-administrative positions together in some clerical and other categories.
Source: Auditor General staff analysis of the District’s fiscal year 2002 employee contracts, job descriptions, and accounting data.
Office of the Auditor General
AGENCY RESPONSE
1
March 18, 2003
Ms. Debbie Davenport
Auditor General
Office of the Auditor General
2910 N 40th Street
Suite 410
Phoenix Arizona 85018
Dear Ms. Davenport,
Attached is the Sacaton School District’s response to the Auditor General’s performance
audit preliminary report. The district appreciates the time, effort and assistance provided
by the Office of the Auditor General. You have provided us benchmarks that we can use
to measure our success as we progress toward creating an exemplary school system that
will be recognized for its accomplishments.
Be assured that the district will strive to institute the highest quality programs and
opportunities for our students, their families, and the community in the most cost efficient
manner. Also, be assured that our efforts will be conducted in accordance with both the
spirit and letter of applicable statutes and regulations.
Finally, you listed in the report challenges that impact the district. The impact these have
on operations should not be underestimated. Nor, should the effects that other challenges
such as the high incidence of violence, alcoholism, and disease (e.g. Diabetes)
historically have had on the schools be discounted. These factors drive many of the
initiatives that the district has undertaken, the programs that were established, and costs
incurred.
Finally, Sacaton School District has made tremendous improvements in creating a safe
learning environment, extending school based programs and reaching out to our students
and their families. These efforts have resulted in improved attendance, reduced violence,
and reduced drop out rates for both our students and our graduates. Unfortunately, these
are not identified in the report.
We will continue successful programs, work toward improving curriculum and
instruction, and incorporate relevant recommendations. Working together, we are
2
confident that we can provide our students an extraordinary education so that all of our
students will be successful.
Please do not hesitate to contact me if you have any questions or require further
clarification.
Sincerely,
Dr. Leon Ben, Superintendent
Encl.
3
SACATON SCHOOL DISTRICT #18
RESPONSE TO
PERFORMANCE AUDIT
February 27, 2003
CHAPTER 1
Administration
Administrative Costs
Recommendation:
1. The District should better manage existing personnel to reduce its dependence on
consultants. For example, the District should delegate grant writing responsibilities to
one of its program directors, and it should ensure that its business manager can
perform all required job duties.
Response:
In order to address this recommendation the following background needs to be
established:
LEVEL OF FUNDING
As shown in Table 1, Sacaton School District has received significantly more funding
from Federal Grants than any of the other comparison Districts. In order to successfully
bid for the awarded grants, Sacaton has leveraged its internal resources and outsourced
for those skills not possessed by Sacaton personnel. In addition, Sacaton is staffed to
operate all Federal programs with soft dollars from the grants. All grants are written on
an award contingency basis; if the grant is not awarded, the District does not pay
anything. To the contrary, the Sacaton School District does not have resources to prepare
the bids on any of the previously and future awarded grants.
4
Table 1
Analysis of Federal and State Funding
SY 2001 and
2002 Obligated
Discretionary
Funds
Source: U.S.
Department of
Education
SY 2002
Federal and
State
Entitlement
Budgets
Source:
Arizona
Department of
Education
Administrative
Costs: Federal
Entitlement
Funds
Administrative
Costs as a percent
of Entitlement
Funds received
Source of Information
District
U.S
Department of
Education
Grants and
Awards
AZ. Dept of
Education:
Grants
Management
Approved
Budgets
AZ. Dept of
Education:
Grants
Management
Approved
Budgets
Administrative
Costs divided by
Entitlement Funds
Sacaton $2,465,734* 1,274,047.08 30,000 2.4%
Ajo 67,875 422,060.39
Cedar 641,671* 1,143,858.10 65,693 5.7%
Gila
Bend
61,165 492,781.22
Mayer 22,393 281,888.58
Nadaburg 0 503,666.99
* Both Cedar and Sacaton received a Grant for School Repair and Renovation because
they are on Native American lands. Cedar received $547,717 (or 85% of the USED
grants) and Sacaton received $677,540 (27% of the total). These funds are formula-driven
and can not be used for program operations.
CONSULTING FEES
The consulting fees paid to the general administrative consultant have been itemized and
pre-approved by the funding source in the specific federal grants at seven and a half
percent (7.5%) of the amount awarded. This rate represents payment for the
administration, monitoring, evaluation, and reporting requirements for each grant. Most
importantly, it includes all required management and technical assistance within the
scope of the grant on a 24- hour, 365 days per year basis.
DISTRICT STAFFING LEVEL COMPARISON
The number of administrative personnel (24) included in the report is overstated by six
FTEs. The count in the reports includes six individuals that do not have any
administrative duties as a normal part of their job duties. These individuals spend their
5
entire day on normal programmatic and program operational issues. These individuals
are:
· Connie Jackson, CTC Coordinator/Lead Teacher
· Dorian Rivera, 21st CCLC Coordinator
· Joyce Baldwin, GEAR UP Coordinator/Lead Teacher
· John Fooks, Technology Coordinator
· Mykal Lucero, CTC Teacher Assistant
· Candy Williams, Middle School Coordinator
The district staff does not have the expertise to write grant applications and perform their
program duties on a concurrent basis. Grant writing is composed of several very time
consuming processes. The first is the identification of available funding sources. The
second is the preparation of the application that includes, at a minimum: a needs
assessment; a matching of existing human resources to grant requirements; development
of deliverables; and preparation of corresponding budgets. At the present time, none of
the existing staff has the expertise to complete an entire grant application like the ones
required to obtain existing funding.
Recommendation:
2. The District should revise its hiring practices to ensure the most qualified person is
hired.
Response:
The current Business Manager is capable of performing most of her assigned job
responsibilities. She has been employed at the District for over ten years and has always
received excellent performance ratings. She has far exceeded her performance
expectations.
Recommendation:
3. The District should evaluate its contracts more carefully to ensure that it obtains the
desired services at a reasonable cost. Contract services should be compared to those
of similar district.
Response:
The District reviews and evaluates all of its prospective contracts to ensure that the
District is placed in the most favorable position with respect to all parties involved. The
rates included in the contract represent a blended rate for a variety of services requiring a
discerning difference in skill, education, and experience. The District utilizes a mix of
contractual payment terms depending on the services required. These include flat rates,
cost-reimbursement plus, and contingent with flat rate percentages, to name a few. The
District will continue to exercise due diligence in contracting for desired services.
6
Recommendation:
4. The District should recover the $30,000 overpayment it made to the general
administrative consulting firm for grant writing services received in fiscal year 2002.
Response:
The District paid the contractor in accordance with the contract for the services provided.
The applicable clause of the contract reads:
For grants funded for multiple years or renewable over multiple years: Each year
over the multiple year life of the grant, and upon receipt of each year’s funding
allocation, Sacaton Public School District No. 18 shall issue a purchase order to
Goals, Inc in the amount of 7.5% of each year’s funding allocation for the
following services to be provided by Goals, Inc:
The term allocations is the grant award, not disbursements. Therefore, it is clear that the
District paid in compliance with the contract.
Recommendation:
5. The District be familiar with the contracts and thoroughly review billings to ensure
that contractors are not overpaid. In addition the District should ensure that it pays its
contractors only for services that they have actually provided.
Response:
The District reviews all disbursements to ensure that all services have been provided in
accordance with all contractual obligations prior to making any disbursement.
Travel
Recommendation:
1 To reduce its administrative travel costs, the District should:
· Consider the costs and benefits of sending staff to a conference. Travel
should be limited to conferences and services that help the District achieve
its goals and objectives.
· Limit the number of employees attending a given conference to the key
staff members who need to attend.
· Require travelers to justify or personally pay for any changes to travel
arrangements that cost the District additional money.
Response:
Conferences are attended only by key District personnel and for whom the subject area
the conference has a direct relationship to their specific job assignment.
7
It should be considered that three of the eight conferences listed on page 15, table six of
the report pertained to Impact Aid, a federally funded program which is critical to the
District. If Impact Aid related conferences is excluded from this list, then all but one of
the remaining conferences are in state and the number attending conferences is reduced
from 31 to 17.
It must also be noted that it is a cultural requirement of the Community to include
students, immediate family and extended family on these trips and the District at times
has done that. The District has been told/asked to include members of the Community on
a number of these trips such as the Federal Association of Federally Impacted Schools
Conference held in Washington, D.C.
It is the policy of the district to require justification for all travel arrangements that cost
the District additional money.
Recommendation:
2 To ensure that all travel expenses are reasonable and allowable, the District should
require travelers to submit proper documentation. Even when expenses are placed on
the District’s credit card, travelers should be required to submit supporting
documentation, such as receipts and invoices. Further, the superintendent and board
members should also abide by the District’s travel policy.
Response:
The District evaluates all travel expenses for reasonableness and requires documentation
from all employees for all travel expenses submitted for reimbursement. In the future it
will increase its efforts to enforce the District’s travel policy for all travel claims
submitted by the Superintendent and board members.
Purchasing Practices
Recommendations:
District staff purchasing authority should be adequately trained in purchasing
procedures in accordance with Arizona Revised Statutes and the Uniform System of
Financial Records for Arizona School Districts, including:
· Maintaining proper purchasing documentation.
· Ensuring proper vendor selection methods are used.
8
· Documentation any conflicts of interest for each purchase and ensuring that
the employees with conflicts of interest are not involved in authoring those
purchases.
Response:
The District will develop and implement for all personnel with purchasing authority a
training program that will include purchasing documentation requirements, vendor
selection and conflict of interest.
Governing Board
Recommendation:
1. The District should strive to promote public participation in governing board
meetings by consistently meeting at scheduled times.
Response:
The District strives to hold all of its meetings at the schedule date and time. However, on
four occasions the meetings were postponed/cancelled or were started at a later time for
the following reasons:
Meetings cancelled or postponed
The special meeting of July 17, 2002 was cancelled due to a lack of quorum.
The regular board meeting of August 13, 2002 was cancelled due to a lack of quorum
Meetings started after the scheduled time
The meetings of August 1, 2002 and August 20, 2002 did not begin on time because the
board members required to form quorum arrived late.
Recommendation:
2. To ensure that the board receives all necessary information to make informed
decisions in a timely manner, District management should provide board members
with the information packets at least several days prior to a board meeting.
Response:
The District generally prepares all material for the Governing Board on timely basis.
However, on one isolated occurrence, for the meeting of July 9, 2002, the budget
information required for the meeting was not prepared in time for the board meeting and
consequently the meeting had to be postponed.
All materials required for all board meetings since that date have been prepared and made
available to the board compliance with all of the boards directions prior to the board
meetings.
9
CHAPTER 2
Food Service
Management of Food Service Program:
Recommendation:
1. To ensure that the District has sufficient information to manage its food service
program and make sound decisions, the District should conduct typical management
oversight activities. Specifically, the District should:
· Implement financial management procedures, including monitoring the food
service programs comparison of budget and actual expenditures.
· Perform cost-benefit analyses prior to making large expenditures.
Response:
The District will implement financial management procedures and conduct cost-benefit
analyses. This will include formalizing procedures to ensure first-in- first-out
inventorying.
Please note:
· Ref. Audit Report, Page 19. The financial analysis in the report does not
match total expenditures for FY 2002 against revenue produced for the same
period. Food Service is reimbursed. Also, reference third bullet below.
· Ref. Audit Report, Page 22. Although a formal cost analysis was not
conducted when the district changed to a centralized kitchen in SY 2003, the
district seriously considered several conditions before taking this course of
action. First, beginning in SY 2003, the schools were reorganized and the fifth
grade moved to the Elementary school. A staffing analysis was performed and
it was determined that transferring the staff to the Elementary school would
allow for better supervision and quality control. Second, the equipment at the
schools is old and in constant need of repair. It was determined that it would
be optimal to operate and maintain just the one kitchen.
· Ref. Audit Report, Page 21. Until the Governing Board changes policy, the
Food Service costs will exceed revenues and GRIC (Tribal) funds will be used
to offset the deficit. In 1999, a decision was made to serve meals to all
children regardless of whether their parents submitted a free or reduced lunch
eligibility survey. Even though efforts are made to have 100% returned, a
substantial number of families do not respond.
· Several statements in the report require clarification.
For example:
· Ref. Audit Report, Page 22. The findings indicate that “food typically
arrived cold”. The District was in the first week of operating a
centralized kitchen when this finding occurred. After the initial start up
period, these issues had been corrected and the kitchen now operates
properly.
10
· Ref. Audit Report, Page 22. The statement that “it (District) did not
want to repair broken dishwashers” is incorrect. The District has
repaired the equipment several times. The last time the equipment
broke the District was advised by the manufacturer that it was not
feasible to repair the equipment again. The use of disposable dishware
is an interim solution. The kitchen equipment is on a planned
replacement schedule.
· Ref. Audit Report, page 23. The overcrowded storage facility observed
by the auditors was an isolated emergency situation that occurred
while equipment was being repaired. Adequate storage is now in
place.
Recommendation:
2. To help reduce the potential for waste and abuse and to ensure that adequate control
over inventory is maintained, the District should implement inventory management
procedures, including:
· Managing inventory on a first- in- first-out basis, including regular rotation of
food items so that the oldest items are used first.
· Establishing receiving procedures for the items ordered, including assigning
and authorized person to receive and check deliveries.
Response:
The District has developed and is implementing procedures for inventory control and
ordering shipme nts and receipting deliveries.
Recommendation:
3. To assist the District in determining the efficiency and effectiveness of its food
service program, the District should identify, document, and monitor program
measures, such as meals per labor hour and cost per meal, and compare them with
similar districts or industry standards.
Response:
The district has a contract with Crandell & Associates for menu preparation. This will
ensure compliance with USDA requirements and proper management of inventory.
Crandell & Associates also assists the district in fully utilizing its commodity
allocation.
Safety and Sanitation of Food Service Operators:
Recommendation:
1. To ensure a safe and sanitary work environment in which to prepare, serve, and store
food, the District should ensure that;
· All food service workers have current food handler and health cards.
· Food storage areas are maintained at the proper temperatures.
· The temperatures of foods on the serving line are monitored to ensure proper
temperatures.
11
· “Use By” dates of food service items are tracked and all outdated foods are
disposed of.
· Food preparation areas are clean and do not contain items that could
compromise the sanitation of food being prepared.
Response:
The District is finalizing procedures to ensure a safe and sanitary work environment.
These will be implemented immediately.
Please note the following discrepancies in the report.
· Ref. Audit Report Page 24. The report indicates that none of the food service
workers had current county health cards. And only one held a current food
handlers card. Response: First, the district utilizes the Tribal Health card in
lieu of the county. All but one individual, who was newly rehired at the time
of the visit, held the proper Tribal Health Card (Reference attached). The one
individual who did not hold this card has since applied for and received such
card. Second, the district has arranged for training of staff so they obtain their
food handlers card.
Recommendation
2. To further ensure the sanitation of the work environment and the safety of its students
and staff, as well as continued funding from the National School Lunch Program, the
District should obtain health inspections at least twice per year.
Response:
Ref. Audit Report, Page 24. As noted in the report, since the schools are located on
reservation land, the Gila River Indian Community is responsible for conducting
health inspections. The District has informed the Tribal authorities of the need for the
inspections. In the future, the District will document its contact with the authorities so
as to document that it is carrying out its responsibilities.
CHAPTER 4
Proposition 301 monies
Recommendation
1. The District should revise its performance pay plan and/or the related disbursement
dares to ensure that all goals are measurable and attainable before the pay is
distributed. Further, the District should implement policies and procedures to ensure
that each performance requirements is measured and the results are documented.
2. The District should ensure that the plan addresses only those allowable options
provided in statute.
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3. The District should obtain governing board approval of any revisions to its
Proposition 301 plan.
Response:
The District formed a committee earlier this year that is currently evaluating and revising
the entire Proposition 301 Plan including the performance pay plan. The plan will be
reviewed to ensure all options comply with the applicable state statutes. The plan will
also be submitted to the governing board for approval prior to implanting it.
CHAPTER 5
Classroom dollars
Recommendation
The District should classify all transactions in accordance with the Uniform Chart of
Accounts for school districts.
Response:
The District will comply with all USFR Uniform Chart of Accounts classification
requirements.
State of Arizona
Based on discussions with the District during the audit and at two separate draft
report meetings as well as follow-up research, the following auditor comments are
provided to address certain district responses to the report recommendations.
Chapter 1, Administration
As noted in the report, according to data maintained by the Arizona Department of
Education, the District has significantly more administrators than comparable dis-tricts.
Further, the District makes significantly greater use of consultants than other
districts to perform administrative functions, such as grant writing, even though some
district administrators report having experience writing grants. Other districts with
fewer administrators use district staff instead of consultants to perform all grant activ-ities.
􀁺 District’s Use of Consultants, Recommendation 4: Recovering $30,000
Overpayment—Although the contract with the general administrative consultant
does state that the District shall issue a purchase order based on funding allo-cation,
it further specifies “The Sacaton School District will make commission
payments to (consultant) for the above described services based on a percent-age
of 7.5% (sic) of the total amount of the funds actually received from the fund-ing
source.”
Chapter 2, Food Service
Because the District’s food service program operates at a deficit, it is particularly
important that the District perform basic management oversight duties, including
conducting analyses before making decisions, ensuring proper inventory manage-ment,
and using performance measures to help it evaluate and manage the pro-gram.
The report also points out the importance of operating the program in a safe
and sanitary environment, which includes ensuring that all food service staff meet the
proper health and training requirements.
Office of the Auditor General
AUDITOR GENERAL COMMENTS
TO AGENCY RESPONSE
􀁺 Management of Food Service Program, Recommendation 1: Conducting Cost-
Benefit Analyses—The District did not provide documentation from the manu-facturer
of its broken kitchen dishwasher to indicate that repair of the equipment
was not feasible. In addition, the District did not provide a kitchen equipment
replacement schedule or previously indicate that the use of disposable ware
was an interim solution.
􀁺 Food Service Safety and Sanitation, Recommendation 1: Ensure Workers Have
Health Cards—Although two of the four health cards referenced in the District’s
response were dated at approximately the same time that auditors requested
copies, the District was unable to provide any health cards during the course of
the audit. Further, the rehired employee’s card is new and does not apply to the
time of the audit. The District should always maintain copies of health cards in
its records to demonstrate that its employees meet all health requirements to
safely prepare and serve food.
State of Arizona