Missouri audit of Hickman Mills School District exposes past turmoil

03/10/2014 9:57 PM

03/10/2014 9:57 PM

A state audit

of the Hickman Mills School District released Tuesday depicts a district whose top leadership was feuding and making a series of missteps as its schools were about to fall from full accreditation in 2012.

Then-board President Breman Anderson Jr. was, according to the auditors, arranging contracts and moving to reassign top administrators mostly on his own while scrambling to contest some $150,000 in claims for unpaid vacation and sick leave by retired Superintendent Marge Williams.

The administration Williams left behind was exposed for many episodes of poor management, including loosely monitored use of purchase cards, numerous seemingly unnecessary or unreasonable expenditures and a weak capital asset accounting system that had lost track of dozens of iPad computer tablets.

The audit also indicates that Anderson did not fully cooperate with the state’s review team — as numerous auditor requests for information and contracts had to be obtained by court-issued subpoenas or by placing Anderson under oath for sworn testimony.

“It is unusual for our authority to be challenged that seriously,” Deputy Auditor Harry Otto said Tuesday night before a crowd of about 100 at Hickman Mills Junior High School.

The resistance was the main reason the audit dragged on for most of two years, he said.

Several board members attended the presentation, but Anderson did not. He could not be reached for comment.

Williams, reached at home Tuesday night, said the audit had just begun when she left the district in 2012 and she had not seen the document. Therefore, she could not speak to details.

But Williams did say that the requested payout for unused vacation and sick time was due under the provisions of her contract. The audit also questioned her travel, but any travel she did was for district business, Williams said.

In Hickman Mills’ favor is the fact that it changed its leadership in 2013.

A new superintendent — Dennis Carpenter — and new board leadership under Eric Lowe are guiding the south Kansas City district with an enrollment of some 6,000 students.

“The cooperation recently has been excellent,” Otto said. “Things have changed.”

The new leadership is admitting to most of the audit’s findings and promising fixes. Some repairs, like reducing the number of purchase cards in the district from 44 to four, are already in place.

Overall, the district received a “fair” rating from Auditor Tom Schweich — which means that the district needs to improve operations in several areas and that the audit contained several findings, some of which need immediate attention.

There was no evidence of theft or fraud, Otto said.

Overall audit ratings can be excellent, good, fair or poor.

Hickman Mills was downgraded to provisionally accredited status in October 2012 and remains provisional. The audit did not explore the academic practices that directly affect the schools’ performance and led to the loss of full accreditation, Otto said, but the review showed faults that have been depriving the district of important financial resources.

Despite the operational flaws outlined in the audit, the district’s overall financial situation has improved since the 2009-2010 school year. But its reserve fund balance of $9.6 million in 2011-2012 was still below minimum recommended levels.

Poor practices made recovery all the harder, the audit stated.

“While improvement in the financial condition of the district is underway,” it said, “our audit identified numerous instances of inefficient spending and a general lack of regard for procurement/purchasing policies…”

Superintendent imbroglio

Williams’ retirement as superintendent in June 2012 stirred up several weaknesses in the district’s policies and practices.

At her departure, Williams said she had used only three of her vacation and sick days in her last seven years and requested a payout of her accrued days — which a district-hired review determined would be $150,000.

The state audit showed that board members thought the small number of vacation days claimed by Williams was unrealistic, but the district did not have an effective monitoring system.

Anderson, according to the audit, took matters largely into his own hands, putting an auditing firm and a law firm to work contesting the issue without full board knowledge and without a bidding process.

In the end, including auditor and legal fees, the district paid out $184,000.

The audit also found fault in how Anderson brought on a search firm to recruit a superintendent to replace the interim leader who followed Williams.

The contract with the search firm was not provided to the administration, and the terms shared with the board were inconsistent with documents controlled by Anderson, the audit said. One board member even resorted to a Sunshine Law request to see the signed contract.

The contract was one of several documents that Anderson did not provide a copy of before a subpoena.

Loose travel, lost iPads

The district’s use of purchase cards — which Carpenter has already curtailed — helped foster spending that the auditors thought was at times excessive and unnecessary.

Some purchases included capital expenditures for computer equipment and a digital camera not allowed by district policy for purchase cards.

Some expenditures that may have had good value — incentive prizes for students — were not covered by an accounting system to show who received the gifts.

The auditor also found what they described as an overall weak system for keeping track of district assets. The review team based much of that finding on an attempt to account for 149 district-owned iPads and 47 more on loan from another district.

After several school visits, the district could locate only 83 of the owned iPads, leaving 66 unaccounted for, and 25 of the loaned tablets, leaving 22. After several weeks, the district eventually found all but eight.

Anderson was the focus of another concern raised by the audit. While most of the board members who went to a national association conference in Boston in 2012 attended several of the work sessions, Anderson attended only one. Board member Bonnaye Mims attended only two.

The auditors also questioned why Williams used 39 travel days out of the district in her last year in the office, including two out-of-state trips in her final month.

“District travel should be limited to necessary trainings or conferences,” the audit said.

Fixes underway

The new leadership in the district is promising a more efficient operation.

The board essentially mounted a coup and voted Anderson out of his presidency role in May 2013. Carpenter took over the superintendent role July 1.

In addition to eliminating most of the purchase cards, the district is working with the Missouri School Boards’ Association to tighten its policies. It will monitor vacation time spent and pay out any accrued time yearly. And it is developing a new inventory and management system of its assets and promising tighter restrictions on travel.

“We are going go make progress,” Carpenter said after the presentation. “We are going to rebuild trust in the community.”

Many longtime community activists in Hickman Mills came to see the presentation, including Lou Austin, who said he found the findings disgraceful.

He was stunned by “the sheer arrogance of power and privilege to think this was satisfactory conduct.”

The auditor’s office will be back before the end of the year to see if the district is making good on its promises, and Austin sees new cause for hope.

“I’m the perennial optimist,” he said. “There is a new chief. There is a future.”

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