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AMADOR COUNTY UNIFIED SCHOOL DISTRICT

HVAC GRANT

REASON FOR REVIEW

The 1998-1999 Amador County Grand Jury requested the 1999-2000 Grand Jury to review the Heating, Ventilating and Air Conditioning (HVAC) Grants awarded to Amador County Unified School District (ACUSD) to determine if ineligible funds had been expended which were not in accordance with grant regulations.

BACKGROUND

In 1993, the ACUSD applied to the California Office of Public School Construction (OPSC) for $3,967,522 in grant monies to install air conditioning at 11 of the 12 schools within the School District. The grants were awarded and installation of the air conditioning systems was accomplished. Subsequent investigations by the OPSC determined the School District was not in compliance with the requirements set forth in the grant's objectives, as ACUSD was single-track and had not converted to multi-track year-round schools. Since conversion to a multi-track year-round school system was the basis for the School District receiving funds, the State proceeded to rescind the grants.

In an attempt to avoid having to pay back the HVAC funds, the School District requested the State Legislature to waive the muti-track requirements. During this appeal, the State did not pursue action regarding payback or auditing of the HVAC Grants. In 1997, the waiver was granted and no repayment of grant funds was required.

In August 1998, the OPSC completed an audit of the HVAC Grants and disallowed approximately $184,400. This amount represents charges and fees that were not allowed within the parameters of the HVAC Grants stemming from change orders and overpayment of fees to the architect, inspectors, contractors and legal assistance on all eleven grants.

The School District has written Board policies and procedures that were in place at the time the HVAC Grants were obtained. These are currently being corrected and modified.

METHODOLOGY

Persons interviewed:

  1. Chief Business Official (ACUSD)
  2. Administrative Assistant (ACUSD)
  3. Architectural Firm
  4. County Auditor/Controller

Documents examined:

  1. Grant applications
  2. Grant awards
  3. Quarterly reports to OPSC
  4. Available grant expenditures
  5. Inspection report
  6. ACUSD meeting minutes

FACTS

  1. ACUSD received 11 HVAC Grants from the OPSC to upgrade air conditioning in classrooms throughout the School District in the amount of $3,967,522.
  2. HVAC projects are funded by the State Allocation Board on a set formula that cannot be adjusted by change orders or overages in project costs.
  3. Change orders were processed even though the grant funding did not permit them.
  4. Contractors were paid for charges over the allowable limit.
  5. Architectural fees were paid over the allowable limit.
  6. Inspectors were permitted to inspect projects after the completion date specified by the State.
  7. Legal fees, which are not allowed, were submitted to the State for payment.
  8. There was a lack of communication between the Superintendent of Schools and the ACUSD Board of Trustees.
  9. In 1998, the ACUSD was required to reimburse $184,408 to the OPSC for ineligible costs associated with the grants.
  10. The Superintendent of Schools, who administered the HVAC Grants, resigned in 1997.
  11. Only one of the current seven ACUSD Trustees was on the Board at the time the School District applied for the grants.
  12. The ACUSD Policies and Procedures Manual was not followed.
  13. The School District is currently updating and improving the Board's Policy and Procedures Manual based upon the California School Board Association guidelines. 104

CONCLUSIONS

  1. There was a lack of communication between the Superintendent of Schools, in charge at the time, and the Board of Trustees. This resulted in the lack of a checks and balances process for the grant programs.
  2. Spending practices were allowed to go unchecked by the Board that resulted in costs not allowed by the grants.
  3. The HVAC Grants were awarded in 1993 and completed in 1995. Very little information is available as the individuals involved with the original grant applications, and subsequent construction, are no longer employed by the School District.

RECOMMENDATIONS

  1. The ACUSD should work diligently towards updating and adhering to their adopted Board Policies and Procedures Manual.
  2. The Board should review their policies and procedures for cost accounting and grant management to assure there are adequate guidelines in place. These procedures should be in writing and included in the Board's Policies and Procedures Manual.
  3. The Board should establish regular oversight controls to ensure the problems that arose during the administration of the HVAC Grants do not reoccur.
  4. An individual line-item budget for all grants and major building and maintenance projects should be established.
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