Grand Prairie ISD following bad pattern of other local school districts

by Jeff Melcher

Defenders of the Lancaster ISD troubled financial system often claim, like guilty teenagers, that "everybody else is doing it." What they mean is that everybody is late with audits (see reporting on Dallas County Schools) and everybody misuses credit cards, and everybody makes budget amendments ex-post-facto after the money has already been spent.

As hard as it is to believe, such defenders have a point.

The latest example is Grand Prairie ISD. This suburb has a relatively good track record. The FIRST (Financial Integrity Rating System of Texas) scores have been good. Voters recently approved a major construction bond. Growth is moderate. Test scores are typical of suburban districts. And they had a relatively painless transition last year when a long-term superintendent left and a new person took the reins.

The GPISD trustees were so happy with the performance of their new superintendent, Dr. Susan Simpson, that on January 24, they extended her contract by three years and raised her salary to $250,000.

On February 12, 2009, the board heard from their long-term outside auditors, Weaver and Tidwell. The board was told the auditors has expressed "no unqualified opinions." (PDF) The meeting agenda (PDF) does not indicate any "material weaknesses" were disclosed.

However, the text of the audit itself (see pages 78-81 to the right) indicates serious "material weaknesses" in the first year of Dr Simpson's leadership. These include errors familiar to those watching the Lancaster ISD's failure to reconcile the monthly statements to the financial ledger, failure to amend annual budgets before incurring major expenses, and excessive number of people making "manual entries" to the financial systems.

The auditors made clear in their findings that with the lax financial controls, neither GPISD nor their auditors could be sure, one way or the other, that fraud, theft, or intentionally misstated financial reports had not occurred in the past year.

It is not at all clear that board members were made aware of the possibility of fraud, etc. before raising their superintendent's salary.

On February 24, the board meeting minutes (PDF) reflect, for the first time, that the audit had "findings." The reaction of the administration is a recommendation to hire new auditors. The attached minutes indicate Tidwell and Weaver will be either replaced, or assisted, by auditors from Moak Casey in the coming years. The district is also considering adding a new position, an internal auditor.

Also, the February 09 findings prompt the GPISD into implementing new software by April 2009. Nothing like rushing new stuff into production.

There is some background of how the GPISD financial re-org came about in the minutes of the October 2008 meeting. The former assistant superintendent for finance has been re-classified as Chief Financial Officer, a long-term financial assistant has departed, and the new superintendent, Susan Simpson, has hired a new assistant superintendent for business operations.

It is apparently the new assistant superintendent Julie Spears, who promised the GPISD trustees last October what she planned to accomplish:

"Ms. Spears said she will now be responsible for overseeing and managing the District's budget by following all necessary state and federal guidelines, implementing financial discipline, ensuring the financial security of our investments, anticipate any budget problems before they occur, and communicate to each department and campus principal about where they are with their budget numbers."

The actual outcome as reported by Tidwell and Weaver's audit, indicated a somewhat different picture.

Are we disgusted with this whole process yet?