Grandview School District audit reveals failures

08/27/2014 5:58 PM

08/27/2014 6:00 PM

Winning voter approval for any multimillion-dollar bond issue is difficult. But managing the money and the projects is essential to maintaining the community’s trust.

The Grandview School District apparently dropped the ball. That surfaced in a state audit that district patrons sought, because school officials also failed to be accountable. The Missouri auditor found deficiencies in internal controls, noncompliance with legal provisions and a need for management improvements.

The audit examined a $6 million bond issue voters approved in 2007, a $7 million bond issue passed in 2011 and a $9 million bond issue approved in 2013. It found that the district, with about 4,000 students and 535 full-time employees, failed to carry out an agreement with Bank Midwest on providing services such as student internships under one bond program provision that allows for federal tax credits in lieu of cash interest payments.

Also, in financing the bonds, the district used a financial adviser who additionally acted as underwriter, which “creates an inherent conflict of interest.” The audit also found that the district improperly used $117,000 in bond proceeds for band and athletic uniforms. In addition, the district failed to share with the public plans documenting how the bond money would be used or develop mechanisms to track the costs. Other audit findings included problems with record-keeping on capital assets, computer security and Sunshine Law compliance.

The school district, in its response published with the audit, said it was taking steps to comply with the recommendations. That’s good, because school officials will have to regain voters’ trust if they ever hope to win approval of ballot issues in the future.

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