AS THE SEATTLE School District prepares to go into debt by $26.7 million and optimistically tries to pencil out other funding sources for a new $43 million headquarters, district financial managers can't seem to keep count of the public's nickels and dimes. A new state audit shows school officials are once again unable to justify, track, or find some fixed assets and as much as $100,000 in student and government dollars entrusted to district oversight.
Some of the "lost" equipment and funds were stolen, such as almost $2,700 taken by persons unknown in apparent thefts of student body and school lunch money turned up in a limited audit sampling. The losses constitute pocket change compared to the district's annual $360 million budget. But if it's the little things that matter in accounting, it's no confidence-builder that school officials have lacked adequate controls over some of the same troubled funds four years in a row.
Most confounding, an audit of the district's immigrant student enrollment figures—used to obtain federal funds—found the district claimed that 3,947 students qualified as immigrants. But school officials could provide auditors with only 3,000 names, and in a sampling of just 20 of those students, state auditors discovered almost a third were born in the US.
Auditors concluded that the district received more funds than it was entitled to, but couldn't establish a figure due in part to "missing records." However, congressional funding reports show the US pays about $200 in support per immigrant student— suggesting that if the district is even 500 short of its claim, it may have wrongly received well over $100,000. The district is now attempting to determine exact figures.
According to the July 28 report by state auditor Brian Sonntag, the district lacks the accounting controls and record-keeping needed to watch over all its receipts and assets. The auditor's office was unable, for example, to fully document distribution of $20,000 in gift certificates bought to aid families of students in need. A sampling last year also found that an unspecified number of "computers, TVs, and VCRs could not be located [along with] other small and attractive items that had not been tagged and entered into the inventory" (the district is required to appoint a staff member at each administrative or school site to monitor district assets, but a review of 11 schools showed only two had such overseers).
Standard procedures such as requiring central accounting and school cashiers to log and pre-number receipts, and to independently review and reconcile funds and deposits, were often lacking, says the auditor.
"These weaknesses unnecessarily increase the risk [that] fraud or abuse could occur and not be detected in a timely manner, if at all," the auditor says. His office thus had no way of knowing just how much money could be missing district-wide.
Inadequate lunchroom cash control is cited as an audit issue for the second year in a row, and student body activity funds handling has been problematic for four straight years. On the plus side, Sonntag says the district has adequate controls over its larger accounts. The district, in a statement, says it agrees with the findings and promises—again—to develop "new procedures . . . to address the weaknesses identified."