The State Auditor's office released its audit of the Seattle School District of June 21, 2010.  Here is a quick summary of its findings:

1. The District is not recording meeting minutes and making them public, in violation of the law.

2. The District did not report the theft of computers, digital cameras and camcorders, worth at least $7,412.

3. The District used $1.8 million of capital funds to pay for the salaries and other costs of the Small Business Development Program.  These funds are restricted funds which are collected from taxpayers for use on specific renovation, building and other projects.  This violates the law.

4.  The District overpaid employees due to a lack of adequate internal controls during a payroll system conversion, which has cost the district $187,437 in funds it has not yet recovered. 

5.  The District has not implemented sufficient policies and controls to ensure that it complies with state laws, its own policies, or address the findings of prior audits.

a.  The District continues to make errors in reporting the "staff mix," of its teachers, or years of experience and academic credits earned, which is the basis for state funding of employee salaries.  This means the district is receiving an inappropriate level of funding.

b.  The District makes multiple errors in the way it reports the basic enrollment of students.  It tracks students based on whole hours, rather than reporting class time and passing time.  Again, this results in an inappropriate level of funding provided to the district by the state.

c.  Personal service contract providers are receiving substantial payments from the district before their contracts are approved.

d.  Asset tracking is flawed.  The auditor checked 120 items and of those found 28 missing printers, laptops and desktop computers. 

c.  Credit card use--28 employees have credit cards.  They bought $5,102 for hotels and food, which is not allowed.  Five transactions were charged over the $1000 limit.   Cardholders are incurring substantial late fees as they are not paying these credit cards on time.  The District can't track this as it does not require the card holder to submit the credit card statements for review.  And credit card receipts are not retained---the auditor found $5,172 worth of missing receipts.

d.  Fuel cards--The district purchased $250,000 in fuel during the 2008-9 school year.  One of the months the auditor checked revealed that 23% of the fuel purchases occurred between 1 and 4 am, when no one was working. 

e.  Collection of rental revenue--rent on Memorial Stadium was $1,364,484 for 2009 and checks are supposed to be deposited within 24 hours of receipt.  Yet these checks sat in an unsecured folder on the responsible person's desk for over a week. 

f.  Initiative 728 funds--the District is not complying with the annual reporting requirements of the law.

The State Auditor says the District and its upper management have placed public resources at risk (page 31) by not familiarizing themselves with the reporting requirements of the law and by not responding to prior audits revealing many of these shortcomings.