Auditor cites schools' progress

Auditor cites schools' progress

By Sanjay Bhatt
Seattle Times staff reporter

Seattle Public Schools has made progress in complying with laws and accounting for public funds, State Auditor Brian Sonntag said yesterday.

After three consecutive audits critical of the district's stewardship of public funds, Sonntag's office reported no significant problems in its "accountability audit" of the state's largest school district. But in a separate 14-page letter to the School Board, the state auditor flagged several weaknesses in the district's internal controls.

The audit said the district awarded contracts without competitive bids, made improper reimbursements to employees, didn't collect revenue and deleted e-mails that should have been kept for six years as required by state public-records law.

The deficiencies are more isolated than in previous audits, Sonntag said. "There's also a greater willingness to be responsive," he said. "That attitude means a lot."

Seattle Public Schools spokeswoman Patti Spencer said the district is "delighted at the overall direction" of the audit.

"I think these audit reports indicate the steps taken around fiscal integrity and culture in this organization are paying dividends in terms of a very robustly well-managed financial organization," she said. Still, the public is scrutinizing Seattle Public Schools' finances as the district attempts to balance its future budgets without closing schools.

Schools Superintendent Raj Manhas in April proposed the closure of 10 schools in 2006-07. After a backlash from the community, Manhas decided to appoint an outside committee to make recommendations later this year.

The incidents identified by the state include:

• No competitive bidding: The district did not competitively bid $79,820 in remodeling work at the district's headquarters, even though state law requires competitive bidding on projects estimated to exceed $50,000. District officials told auditors they estimated the work would cost less than $50,000 and sought less-formal quotes, as state law requires. But the district couldn't provide evidence that they had sought quotes.

• Travel expenses: The district paid an elementary-school principal $1,489 — $1,301 for meals, $105 for a zoo membership and $83 for alcohol. Auditors could find no documents to prove these payments were for legitimate business purposes. In another instance, the district paid a consultant $32,775 without the invoices to detail the work. "We also found the district paid travel vouchers and other reimbursement requests that were initiated and approved by the same employee," state auditors wrote. This violated the district's policy.

• Payroll: In a review of 10 teachers' files, auditors found all of them contained errors in reporting of credits for courses taken by teachers or years of experience, both of which can alter the amount of state funding the district receives.

• Public-records retention: A former Head Start program manager, who left the district after the audit uncovered $1,034 in suspicious travel costs and $4,593 in inappropriate tuition reimbursements, provided a copy of an e-mail that he said showed his supervisor approved the tuition reimbursement.

"When we asked the District to verify the authenticity of the e-mail, we learned the District does not keep e-mails for more than six weeks," auditors wrote. Local governments are required to keep public records for six years.

Sonntag said he doubted that resolving the problems would amount to the magnitude of savings the district needs to close an $18 million budget gap in 2006-07. He also said the weaknesses were common to large, complex organizations.

Sanjay Bhatt: 206-464-3103 or sbhatt@seattletimes.com