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SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Lake Havasu Unified School District pursuant to A.R.S.
§41-1279.03(A)(9). This performance audit examines six aspects of the District’s
operations: administration, student transportation, plant operation and
maintenance, expenditures of sales taxes received under Proposition 301, the
accuracy of district records used to calculate the percentage of dollars spent
in the classroom, and the District’s English Language Learner programs.
Administration (see pages 5 through 11)
The District’s administrative costs were slightly higher than
comparable districts’ because it spent more for outside professional and
technical services and for printing and binding. More specifically, the District
paid a computer consortium to host and manage the software and hardware for its
accounting system while the comparable districts utilized district staff for
these purposes. Additionally, Lake Havasu USD outsourced many of its print jobs
to an outside printing company while comparable districts used their print shops
or district printers or copiers. As a result, the District spent a higher
percentage of its resources on administration than comparable districts and the
state average. Lake Havasu USD spent 10.2 percent of its available operating
dollars on administration, compared to the comparable districts’ average of 9.4
percent and the state average of 9.5 percent.
Also, the District did not adequately oversee the use of its credit cards and
cell phones. In fiscal year 2007, the District made over 500 purchases totaling
more than $100,000 using its seven credit cards. The District established a
system of policies and procedures to control the credit card purchases, but did
not effectively follow these policies and procedures. The District also provided
cell phones to 53 employees at a cost of over $27,000 without a formal district
cell phone policy or user agreements. Additionally, the District did not always
provide adequate security to protect sensitive electronic information. Lastly,
the District misclassified some beverage sale proceeds as donations. This could
lead to the misuse of public monies because districts may spend donations for
purposes that they cannot use other district monies for.
Student transportation (see pages 13 through 17)
In fiscal year 2007, Lake Havasu USD subsidized its
transportation program by about $217,000—monies that could otherwise have
potentially been spent in the classroom. The District’s cost per rider was more
than twice the comparable districts’ average. This occurred, in part, because
the District transports its students 2½ times farther than the comparable
districts, on average. However, the District could lower its costs by improving
its routes, which were found to be inefficient, and by establishing and
monitoring performance measures. Also, the District’s lack of adequate controls
over the use of its fuel cards made them susceptible to fraudulent fuel
purchases. Further, the District did not review or maintain driving records, as
required by the Department of Public Safety’s Minimum Standards.
Plant operation and maintenance (see pages 19 through 23)
The District’s plant costs were lower than comparable
districts’, but improvements can be made. Lake Havasu USD’s $5.79
per-square-foot plant costs were 11 percent lower than the comparable districts’
average of $6.53. These lower costs were primarily the result of having fewer
plant employees and not having to pay for water. Specifically, the District’s
custodians each maintained about 33,200 square feet, 58 percent more than the
21,000 square feet maintained by the comparable districts’ custodians, on
average. Additionally, through an agreement with Lake Havasu City, the District
does not incur water or sewage costs. However, the District could further reduce
its plant costs by reducing its energy costs. Lake Havasu USD’s electricity
costs per square foot were 41 percent higher than the comparable districts’
average.
Proposition 301 monies (see pages 25 through 28)
In November 2000, voters passed Proposition 301, which
increased the state-wide sales tax to provide additional resources for education
programs. The District’s Proposition 301 plan was incomplete as it did not
specify the amount of performance pay that eligible employees could earn.
Further, some performance monies were paid to employees for attending in-service
trainings that were already required under contract and performed during normal
contracted hours.
Classroom dollars (see pages 29 through 32)
Statute requires the Auditor General to determine the
percentage of every dollar that Arizona school districts spend in the classroom.
Because of this requirement, auditors reviewed the District’s recording of
classroom and other expenditures to determine their accuracy. After adjusting
approximately $1.3 million for accounting errors, the District’s revised
classroom dollar percentage of 60.2 percent remained about 2.5 percentage points
above the comparable districts’ and State’s averages. Despite this better than
average classroom dollar percentage, the District’s high food service costs and
certain spending in other noninstructional areas, such as administration,
transportation, and plant operation and maintenance could be reduced and more
dollars redirected into the classroom.
English Language Learner programs, costs, and funding (see
pages 33 through 38)
Statute requires the Auditor General to review school
district compliance with English Language Learner (ELL) requirements. In fiscal
year 2007, the District identified approximately 5 percent of its students as
English language learners and provided instruction for them in several different
types of programs, including Structured English Immersion, mainstream, and
Compensatory Instruction. The District has begun making changes to its ELL
program to meet state requirements adopted in September 2007. However, while the
District separately accounted for its ELL expenditures, it did not use the
proper fund and program codes required. In fiscal year 2007, the District
received about $103,800 more in ELL-related revenues than it spent for its ELL
program.
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