Florida Keys News - Key West Citizen
Wednesday, February 5, 2014
Fewer findings in audit
Upbeat report offset by subfindings linked to construction project

The 2012-13 preliminary audit of the Monroe County School District contains far fewer findings than its predecessor, and will likely provide a morale boost to Superintendent of Schools Mark Porter and his administration.

However, the number of repeat findings and what appear to be numerous subfindings, in the case of the controversial Horace O'Bryant School construction project, may blunt the impact of the lower numbers.

The audit, which was performed by the state Auditor General (A.G.), contains just 10 findings, compared to the 19 from the fiscal year 2011-12 audit. Four of this year's findings are repeats.

Fiscal Year 2012-13 ended on June 30 of last year.

The document was discussed, though not released to the public, at an exit conference at the district headquarters on Trumbo Road. Representing the Auditor General's office was Jim Bell. For the district, Porter, his Executive Director of Finance and Performance Jim Drake, and Drake's assistant, Candace Kerns, attended. Stuart Kessler, chairman of the district's Audit and Finance Committee, was also present.

Among the findings:

• The AG found -- for the third year running -- that the process used to determine differentiated pay for some of its employees needs "clarification."

The district "still needs a legal basis on which to base its salary schedule," Kessler said during the meeting. "I'd like to know how people are paid."

• Finding #2 regards the net position of the district's Workers' Compensation fund. This is another repeat finding, and while the balance is currently in a deficit position, steps taken by the district appear to have shrunk the size of that deficit "substantially," according to Bell.

Kessler questioned the method used to help eliminate the deficit, i.e., paying for it out of the district's Instructional Fund.

"It's not a fair and accurate reporting," Kessler said, adding that the fund isn't yet paying its own way, leading Drake to reply that there's "no set way to [reduce Workers' Comp deficits] in the state."

• Once again this year, the A.G. found that the district isn't keeping an eye on instructional hours reported in its Adult General Education program, with instances of students and teachers claiming to have been in different classes at the same time.

• In a similar vein, the A.G. found fault with district payroll processing practices, with some schools using a sign-in sheet and others using timecards, leading to "no uniform method throughout the district."

The auditor also found evidence that some employees reported being at work while being on sick leave. The previous two audits of the district had found similar problems.

"This is a failing at the school level right now," Bell said.

Each school should be checking for conflicts within their record-keeping process, he added. According to Drake, a new computer system being considered by the district will include electronic time sheets.

• Finding #5 was that too many employees have access to accounting records and have made journal entries without supervision. Too many people have access to the records, and the ability to change them.

• Regarding facilities management, the district needs to better evaluate the effectiveness of its facilities and maintenance operations in order to establish and maintain a "safe, clean and attractive learning environment," according to Bell.

He noted that the district has no committees including stakeholder input to develop long-term construction priorities, and suggested more cost-effective maintenance techniques, such as establishing expected timeframes for existing jobs. A recent public push by the district to evaluate ancillary facilities, with an eye towards possibly moving many of its operations out of Key West, focuses on future plans and not existing facilities, Bell pointed out.

• The district also needs to do a better job of staying on top of supporting documents for its construction project before cutting checks to contractors and architects, the document suggests, reflecting the current legal stand-off between the district and HOB contractor Coastal Construction over documents needed for a postconstruction audit.

• Finding #9 states that the district still has more to do to get its fund balance reporting under control.

"We're going to bring forth a fund balance policy," Drake said. "It's something that would be simple to correct."

• Lastly, and this finding is federal, the A.G. says the district is taking in more federal and state instructional dollars for its Exceptional Student Education program than it is spending, to the tune of $1.3 million.

"This is something that happens every year," Kessler said.

Porter described the situation as the result of a "staffing decision made in 2012. ... We will resolve this one in a timely way," he added.

Following the meeting, Porter pronounced he was pleased with the reduced overall number of findings in the audit.

"Generally, it's a sign of improvement," he said. "It appears that we are addressing some of their ongoing concerns. They've been reduced in number, and severity. Our goal is zero on all fronts, but it's all part of a process of improvement."

Asked about the number of subfindings in Finding #8, Porter said. "I don't think they're trying to blend multiple findings into single findings to do us any favors. I think they're giving an accurate portrayal of genuine progress on our part."

Kessler, generally seen as a critic of both Porter and district policies, saw it differently.

"There were just as many issues this year as there have been in past years, which in my view is unsatisfactory," Kessler said. "They grouped findings under topics, and it appears that while there were fewer total findings, there were just as many issues raised as subtopics under each main topic."

Kessler was especially concerned about the HOB construction-related finding.

"The A.G., in my mind, strongly confirmed that there were a whole series of things, regarding HOB and the facilities planning, that were amiss," Kessler said. "There's still a lot of work to be done. Some of these findings were technical, but some, particularly in regards to HOB, are very serious. The big issue with HOB is that bills were paid without proper documentation. Every dollar not properly documented is a dollar out of the classroom."

The audit will be made available to the school district and the public online in about two weeks. The district then has a month to officially reply to the state Department of Education. The Audit Finance Committee and school board will discuss the audit at their next meetings.

tschmida@keysnews.com

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