Report questions schools' spending habits

Saying he found evidence that the Lee County School District was engaging in slipshod construction management and that greater oversight is needed over its finances, School Board member Robert Chilmonik on Tuesday produced a report he says could prevent future misappropriations.

In what might have been his most strongly worded suggestion, Chilmonik also wants to reduce from $25,000 to $5,000 the purchases Superintendent James Browder’s can make without board approval. Chilmonik requested a monthly report on such spending and said there should be an immediate audit on expenditures already made this year.

Chilmonik wants the rest of the board to consider the report and schedule a workshop to discuss the recommendations.

Despite frequent tensions between Chilmonik and the rest of the board in recent months, the group listened in silence as he read aloud the 10-page report.

Following the meeting, School Board chairman Steven Teuber called the report insubstantial, saying Chilmonik failed to reveal any specific examples of problems in the $25,000-and-under spending and that all his other findings already had been pointed out in professional audits of the district.

“Not only did he fail to find a host of problems, he didn’t find a single one,” Teuber said.

Lowering the threshold for staff to approve expenditures is not productive, Teuber said, pointing out that $25,000 is the standard used by other districts and taxing bodies of comparable size.

Chilmonik had been alluding to the analysis for the last few months, but did not reveal the findings until Tuesday. Among his report’s major points:

-- In 2004, construction began on Hector Cafferata Elementary two months before a performance construction bond was in place. The school, in Cape Coral, was initially intended to be a temporary facility but later became a permanent location. Chilmonik said this violated state statutes.

-- Violations of state statutes that require construction change orders more than $10,500 to be brought before the School Board.

-- A dramatic increase in the amount of cash being spent on capital expenses from the district’s operating funds. In fiscal year 2001-02, the district spent $3.1 million that way. In the 2004-05 fiscal year, that number jumped to $14.5 million. The practice is legal.

Smaller checks made out to vendors in a short time period that total more than $25,000, the amount at which the School Board currently must review such expenditures.

Bill Moore, director of support services for the district, said he stands by the construction department’s financial procedures. He said it took months to persuade Modtech, the company that manufactured the modular buildings used in the Cafferata Elementary construction, to even issue a bond.

“It was a product we were buying,” he said. “You don’t need a bond for it.”

Moore said his department will prepare a response to Chilmonik’s allegations.

Chilmonik also called into question the district’s travel policies and use of outside vendors.

Of the concerns Chilmonik mentions in the report, most were the focus of previous audits outside groups completed. In an audit done at the district’s request, Orlando-based firm Cherry, Bekaert & Holland in October 2005 said the district is at high risk because it is building new schools quickly and without the proper controls.

The problems could take years to surface, the firm said. But it was unclear whether there would be any plan to address the myriad problems pointed out in the report. Moore told the Daily News then that he didn’t find the audit helpful.

Chilmonik says his research into district spending wasn’t an audit. But after reviewing stacks of financial documents, he’s recommending several.

He said close examinations should be undertaken of the district’s transportation department for safety concerns, as well as accountings of the district’s last eight construction projects, including the renovation that is converting the former Metro Mall into Lee Schools’ new headquarters. He also called for an audit of its computerized information system.

As a remedy to his findings, Chilmonik said the district should comply with recommendations made in previous reports. He also suggested its officials communicate with the state about any possible statute violations.

Teuber said the fact that items from past audits persist in the district is of concern to him. But he said Browder already has delegated staff to address those issues.

The superintendent said employees will continue to look for ways to improve but dismissed the idea that the district has severe financial problems.

“We’ve never had an audit finding that would indicate that anything is illegal or inappropriate,” he said.

To prepare his review, Chilmonik requested public documents from the district, including those audits its contracts and spending below $25,000. Those purchases are handled by staff; all those over $25,000 must be reviewed and voted upon by the School Board.

The board’s new internal auditor, Julie Nieminski, already been directed by the board to conduct an examination of that spending. Plans are also in place for Nieminski to create schedule of audits based on the district’s strategic goals. The schedule and audit of purchases under $25,000 will be complete by summer’s end, according to Nieminski.