Audit finds numerous issues with Capital School District’s maintenance

DOVER — An audit of the Capital School District released this week found funds were spent on unnecessary and unapproved items, district vehicles were used and stored improperly and overtime was not distributed among all employees.

Conducted by Auditor Kathy McGuiness’ office after receiving multiple tips, the findings center on transactions between July 1, 2018, and March 31, 2019, and paint a picture of potential misuse of state and district dollars, specifically in the Buildings and Grounds Department.

The analysis does note some of the specific allegations, such as employees charging personal purchases to the district, could not be proven. At the same time, it says, the problems in the department should not be ignored.

“The overall lack of controls provide the opportunities for misuse and misappropriation to occur,” the report says. “The District should implement or establish controls and processes to ensure compliance with the union contract, track equipment and vehicles, and comply with procurement laws.”

To remedy the issues, the Auditor’s Office suggested a range of ideas, such as stronger restrictions on when district funds can be used, guidelines spelling out bidding procedures and a thorough listing of all equipment and cars Capital owns.

In a response letter to the auditor, the district pushed back against the claim it has violated state policies while noting it has taken steps to address the cited violations. Contained in its feedback are several arguments: there have not been any problems with overtime, all items are approved by supervisors before purchase, there is no credit agreement with businesses and some of the identified bid issues are overblown or not the district’s fault.

“We were under the impression they would be incorporated into the text and influence the findings,” Superintendent Dan Shelton wrote in an email Thursday in reference to the placement of the district’s response in the report. “We were surprised they were simply added as an appendix since it seems as though they would be very relevant facts of the investigation, not afterthoughts.”

In reply to Capital’s letter, the Auditor’s Office backed its initial recommendations and described several of the district’s claims as inaccurate: “Based on interviews, we were informed that 8 of the 10 employees wanted but were not permitted paid overtime. These employees were forced to take compensatory time. At the fieldwork entrance conference, the Business Manager confirmed that available overtime was not posted because all overtime was given to one individual. The finding remains as written.”

Issues

According to the analysis, while the Maintenance Division in the Buildings and Grounds Department consists of 10 employees, overtime was performed solely by one person. Management did not notify all employees of extra opportunities as required by the union contract, which states OT must first be offered to the employee with the least amount of accrued overtime.

Additionally, the audit says, an employee in the division performed numerous HVAC services without the proper certifications, violations that could lead to hundreds of thousands of dollars in fines.

Per the audit, maintenance workers had credit agreements with 23 stores, but, contrary to state accounting guidelines, only two had been approved by the Department of Finance, and many purchases were made without submitting the proper paperwork.

Equipment was bought in some cases a year before it was expected to be needed, and in at least one instance, defective items were not returned. Multiple goods and products were not included on a list of equipment owned by the district.

Furthermore, the proceeds from bits of unneeded metal occasionally sold at a scrap yard were kept at an employee’s house and used to buy minor tools for the maintenance staff.

“Without record keeping, the district cannot ensure that surplus items are disposed of timely, and whether such disposals should have corresponding cash proceeds. In addition, petty cash accounts without adequate controls and safeguards could allow employees to skim District money before transactions are recorded in the District’s ledger,” the report says. “In addition, cash transactions cannot be monitored if they are not being recorded.”

Per the audit, the district had poor controls on the 56 vehicles it owns, as it lacked a record-keeping system for any of the keys and corresponding vehicles. Despite the state requiring GPS monitoring, nearly all the vehicles are not tracked in this way.

The district’s fleet records are incomplete as well, the report says.

The audit also outlines troubles with vendors: While bids are mandated for all orders of at least $50,000 and purchases exceeding $5,000 must be preceded by paperwork, the Buildings and Grounds Department did not go through the proper process.

Capital did not negotiate a contract with three separate vendors despite spending more than $60,000, the report says, because the district incorrectly used the larger public works threshold for routine maintenance issues.

Staff writer Matt Bittle can be reached at 741-8250 or mbittle@newszap.com. Follow @MatthewCBittle on Twitter.

WP RSS Plugin on WordPress