Auditor Galloway calls on Hazelwood School District to scrutinize spending decisions, address poor cash handling

District receives rating of "fair" in citizen-requested audit
May 2, 2018

JEFFERSON CITY, Mo. (May 2, 2018) State Auditor Nicole Galloway today released a citizen-requested audit of the Hazelwood School District which gave the district a rating of "fair." The report highlights weaknesses in cash handling and questionable spending decisions in a district that recently proposed significant budget cuts affecting student programs.  

"Taxpayers initiated this audit to get clear answers on the school district's spending practices after the district proposed cuts to services for their children," Auditor Galloway said. "We found a need for greater accountability in spending and a lack of checks and balances that must be addressed to ensure student needs are the top priority."

The report found the school district collected more than $1.3 million in cash for the 2016-2017 school year, but highlighted numerous weaknesses in the district's cash handling internal controls and procedures. Money is collected from student activity fees, athletic fees and event admissions, and concession sales.

A lack of cash controls means there is a greater risk of loss, theft or misuse of funds. This was the case with funds that went missing between August 2015 and October 2016. A  Central High School principal admitted to taking an unspecified amount and repaid $3,080 to the district. However, an additional $5,095 is missing and the district did not seek repayment for the additional amount. Checks and balances would have allowed quicker detection of unaccounted-for money and better tracking of the total funds missing.

Given the district's financial situation, the audit questioned a series of purchases including flowers, meals, gifts and travel expenses. While the report acknowledged some spending may be appropriate, the audit recommends better scrutiny of these types of expenses to ensure they are reasonable.

The report also detailed a project to lease 16,000 Chromebook computers for $4.7 million. The district did not conduct a comprehensive cost study and the district did not follow its bid policy to ensure they were receiving the best value. A total of 1,150 students have opted out of receiving a Chromebook, resulting in a significant number of computers not being used as intended.  

"Every dollar the school district spends should be scrutinized and weighed against the needs of students," Auditor Galloway said. "These are taxpayer dollars and families expect their money to be spent enhancing the educational experience in classrooms."

Auditor Galloway said the audit also showed that the district attendance records didn't comply with guidelines set by the Missouri Department of Elementary and Secondary Education. The improperly reported attendance resulted in the district receiving at least $95,000 in excess state funding.

The district also did not always comply with the Sunshine Law, and there was a lack of consistency or transparency on notifying the public of board meetings.

The audit was initiated through the citizen petition process; the petition requesting the audit contained more than 5,000 certified signatures from district residents. The district includes 29 K-12 schools and covers areas of Hazelwood, Florissant, Black Jack, Spanish Lake, Ferguson, Bellefontaine Neighbors and Bridgeton in St. Louis County.

Auditor Galloway presented the findings of the audit during a public meeting today in the Hazelwood School District. An online copy of the audit can be found here.

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