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SUMMARY
The Office of the Auditor General has conducted a performance audit of the Phoenix Union High School District pursuant to A.R.S. §41-1279.03(A)(9). This performance audit examines seven 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, the District’s English Language Learner (ELL) programs, and the expenditure of desegregation monies.
Administration (see pages 5 through 15)
Phoenix UHSD paid high salaries to its administrators, incurred high benefit costs for an employee severance plan with questionable savings, and provided a generous benefit plan for retirees. As a result, the District’s per-pupil administrative costs were 15 percent higher than comparable districts’ costs, on average. In addition, management failed to establish proper procedures and provide adequate oversight over the rental of district facilities and a fund-raiser, which lead to a significant loss of revenues. Further, the poor procedures and inadequate oversight were brought to the District’s attention 3 years earlier, but district management failed to take action to address the deficiencies.
Student transportation (see pages 17 through 22)
Phoenix UHSD’s decision to use the City of Phoenix public transit system to provide transportation for the majority of its students has provided the District a very low-cost means of transporting its students to and from school. However, high costs associated with other vendor-contracted transportation eliminated those savings and resulted in the District’s overall cost per rider being similar to the comparable districts’ average. The District owns many buses that are not being used, and these buses could be used to reduce the need for contracted transportation. Under the current state funding formula for student transportation, Phoenix UHSD received $5 million more in transportation funding than its reported mileage would have generated, primarily because funding is increased from year to year based on increases in mileage or bus pass costs, but it is not decreased if there is a subsequent decrease in these figures.
Plant operation and maintenance (see pages 23 through 26)
Phoenix UHSD’s plant operation and maintenance costs were 29 percent higher per square foot than comparable districts’. The District’s high costs occurred because it paid its plant operation employees higher salaries, employed many more security guards, and had higher telephone costs, in part because of its large number of cell phones. Further, future plant costs are likely to increase as the District opened its 11th traditional high school in fiscal year 2008 despite having a very low occupancy rate at many of its schools.
Proposition 301 monies (see pages 27 through 30)
In November 2000, voters passed Proposition 301, which increased the state-wide sales tax to provide additional resources for education purposes. The District paid its Proposition 301 monies to employees and for purposes authorized under statute.
Classroom dollars (see pages 31 through 33)
Phoenix UHSD’s fiscal year 2007 classroom dollar percentage was 57.5 percent, about 2.8 points below the comparable districts’ average and 3.5 points below the national average. Despite this lower percentage, the District’s per-pupil spending in the classroom was higher than the state average because it had significantly more dollars available. The District’s additional funding came primarily from taxes levied for desegregation, and to a lesser extent, additional federal grant monies. Because of this additional funding, Phoenix UHSD was able to spend $9,836 per student while comparable districts averaged $7,010.
English Language Learner programs, costs, and funding
(see pages 35 through 41)
In fiscal year 2007, the District identified approximately 14 percent of its students as English language learners and provided them between one and three hours per day of English language development (ELD) instruction and up to three hours per day of content classes with other ELL students, depending on their proficiency level. The District also offered ELL classes during the summer to eligible students. The District’s operation of its ELL program needs improvement in three key areas:
- The District is not properly implementing the alternative ELL program it received approval to provide in fiscal year 2009.
- The District failed to test the English proficiency of some students who may have been eligible to receive ELL instruction.
- The District is not meeting a state requirement to identify the incremental costs of ELL instruction—that is, only those costs that are in addition to the cost of teaching students who are fluent in English.
Desegregation (see pages 43 through 52)
Phoenix UHSD was 1 of 19 Arizona school districts budgeting monies to address desegregation issues in fiscal year 2007. The District’s per-pupil spending on its desegregation program, which is the State’s largest, has lost its clear link with the District’s original desegregation court order. In 2007, the District spent $49.7 million, or $2,061 per student, which it mainly used to operate various magnet programs at 7 of its 13 schools and provide programs for its ELL students. Although the District met its court-ordered desegregation goal as early as 1992, it did not request the court to close the case, ending federal supervision over the court order, until 2004. Further, the District dramatically expanded its desegregation programs after 1992 in ways not required by the original desegregation court order. Finally, the District does not monitor the impact of its desegregation program and it appears likely that the District could meet the court-ordered desegregation goal without offering any desegregation programs. However, district officials indicated that they intend to continue levying taxes to operate their desegregation programs indefinitely.
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