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SUMMARY
The Office of the Auditor General has conducted a performance
audit of the Union Elementary School District pursuant to Arizona Revised
Statutes §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 (ELL) program.
Administration (see pages 7 through 11)
In fiscal year 2006, the District’s $671 per-pupil
administration costs were 21 percent lower than the $847 per-pupil average of
similarly sized districts largely because it employed fewer administrative
positions. However, district officials did not control costs, overspending the
Maintenance and Operation (M&O) Fund budget in fiscal years 2005 through 2007,
including estimated overspending of approximately $1.2 million in fiscal year
2007. In May 2007, the District was unable to pay its employees, and subsequent
emergency legislation required that the District be placed into receivership.
While districts are typically given 2 years to recover overspending through
reduced budget limits, the legislation putting the District into receivership
also gives it 5 years to recover the amounts it overspent. In addition, the
District did not always follow required procurement rules. For example, over the
course of 2 fiscal years, the District used the services of four special needs
transportation vendors without proper procurement and written contracts. During
fiscal years 2006 and 2007, the District paid these vendors a combined total of
more than $497,000.
Student transportation (see pages 13 through 19)
In fiscal year 2006, the District spent 41 percent more per
pupil on student transportation, and its cost per mile was more than three times
the average for similar-sized districts. As a result, the District subsidized
its transportation program with $434,000 that potentially could otherwise have
been spent in the classroom. While it previously contracted for transportation
services, in fiscal year 2007, the District began operating the program
in-house. This lowered its per-pupil costs by about 15 percent; however, the
District continued to subsidize the program by more than $482,000. Outsourced
special needs transportation was the largest component of the District’s fiscal
year 2007 transportation costs. The District paid two vendors more than $257,000
to transport its special needs students to programs outside of the District
despite not having written contracts with either vendor. Without written
contracts, the District could not ensure that vendor billings were appropriate,
and it also could not ensure that the vendor met the State’s minimum safety
standards and that the District was properly protected from liability. The
District’s current high transportation costs, together with overspending its M&O
budget, highlight the need for monitoring its transportation program, including
developing and monitoring performance measures. The District also needs to
implement required bus preventive maintenance and random drug and alcohol
testing for its drivers.
Plant operation and maintenance (see pages 21 through 26)
In fiscal year 2006, the District spent 41 percent more per
square foot on plant operation and maintenance costs than comparable districts.
The District’s plant operation costs accounted for 13.4 percent of its total
current expenditures, which is slightly higher than the comparison districts’
average and over 2 percent higher than the state-wide average. Even though the
District employed fewer plant-related positions than the comparable districts,
it had high overtime costs, which inflated its salary and benefit costs.
Further, the District had high water and energy costs and lacked conservation
plans to help control these costs. Telephone costs were also high, largely
because the District uses five T-1 lines to handle its phone and data needs,
while comparable districts used only one or two lines. In fiscal year 2007, the
District’s per-square-foot plant costs increased by approximately 6 percent,
largely due to hiring additional staff.
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’s plan for spending its Proposition 301 monies was
incomplete in that it did not describe how base pay and menu option monies were
to be allocated. However, the District spent its fiscal year 2006 Proposition
301 monies for purposes authorized under statute. On average, each teacher and
librarian received base pay increases of $939 and performance pay of $1,532.
Menu option monies paid to eligible employees who participated in AIMS
intervention activities averaged $1,194 each.
Classroom dollars (see pages 31 through 34)
Statute requires the Auditor General to determine the
percentage of every dollar Arizona school districts spend in the classroom.
Therefore, auditors reviewed the District’s recording of classroom and other
expenditures to determine their accuracy. After correction for classification
errors, the District’s fiscal year 2006 classroom dollar percentage increased
from 50.1 percent to 50.3 percent, which is eight points below the state average
of 58.3 percent for the same fiscal year.
In addition, the District spent $6,256 per pupil, which was
$916 lower than the comparable districts averaged and almost $600 lower than the
state average of $6,833. The District spent fewer operating dollars than the
comparable districts because it received less federal and state program monies
and transportation revenues per pupil. Also, the District spent comparatively
more per pupil on food service because it had a high percentage (68 percent) of
students who were eligible for free or reduced price lunches, and it served more
meals than the comparable districts. However, the District spent less on student
support services and instruction support services than the state averages.
English Language Learner programs,
costs, and funding (see pages 35 through 39)
English Language Learners are students whose native language
is not English and who are not currently able to perform ordinary classroom work
in English. During fiscal year 2006, the District’s ELL program served 253
students and primarily consisted of language instructional software and
bilingual instructional aides to assist students during language arts classes.
In fiscal year 2007, the District served 401 ELL students at a cost of
approximately $128,900, and it received $132,000 in funding to serve its ELL
students, including additional state aid known as ELL B-weight monies, and
federal Title III monies. Statute requires the ELL Task Force to adopt models
for districts to provide 4 hours of English language acquisition for first-year
ELL students. Currently, the District’s fiscal year 2007 ELL program provided
only 45 minutes of language acquisition tutoring for students at the lowest
levels of English proficiency. Students who were more proficient were placed in
mainstream classes and were assisted by bilingual instructional aides during
language arts classes.
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