Grandview School District mishandled bond projects, state audit says

08/26/2014 5:49 PM

08/26/2014 8:01 PM

The Grandview School District mishandled several obligations in managing $22 million in voter-approved bond issues since 2007, a state audit released Tuesday reported.

The audit, prompted by petition by Grandview residents, found that the district failed to carry out an agreement with Bank Midwest that was supposed to provide services, such as student internships, under one bond program provision that allows for federal tax credits in lieu of cash interest payments.

The district also used some $117,000 in bond proceeds to buy uniforms for sports, band and choir — purchases that aren’t allowed under bond program restrictions.

In financing the bonds, the district used a financial adviser who also acted as underwriter, creating a conflict of interest, the audit said.

And information shared with the public did not properly specify plans and budgets on how the bond proceeds would be used.

The audit overall was graded as “fair,” meaning that operational improvements are needed in several areas.

Missouri Auditor Tom Schweich said the bond concerns were “significant,” but other findings were not serious and the district generally was well run.

The audit also raised concerns with bank reconciliations, procurement practices, computer security, Sunshine Law compliance and record keeping on capital assets.

In its response, published throughout the audit, the district said that it accepted the auditors’ findings and that it is taking steps to comply with the auditors’ recommendations.

Voters approved a $6 million bond issue in 2007 for projects including safety and security upgrades, new science classrooms and an elementary school gymnasium. In 2011, a $7 million bond issue was dedicated to various projects, including building renovations, heating and cooling upgrades, and parking lot repair.

A 2013 bond issue was dedicated to more renovations, security upgrades, roof repair, athletic and fine arts facility improvements, and other work.

Some district patrons objected to some changes in bond projects and complained that the district was not providing enough information, prompting the petition for the audit.

“The school district owes it to the taxpayers to show where the money goes and how it is being spent,” said Don Fisher, a former Grandview school board member who helped lead the petition process.

Superintendent Ralph Teran said the Grandview district is trying to restore a student internship program to comply with the special federal bond program.

He said the district will also try to be more specific in developing project plans under the bonds. The district has been using the funds primarily to make repairs to its aging buildings and wanted to keep some flexibility to react to problems.

The district cooperated with the auditors and will receive a follow-up visit in a few months, Schweich said.

The administration and board have shown “a 100 percent commitment to fix these problems,” Schweich said.

To reach Joe Robertson, call 816-234-4789 or send email to jrobertson@kcstar.com.

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