Tuesday, August 26, 2014

Audit: Grandview School District played fast and loose with bond proceeds, financial ledgers

Posted By on Tue, Aug 26, 2014 at 5:01 PM

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Missouri Auditor Tom Schweich's probe of the Grandview School District wasn't as bad as his findings earlier this year of neighboring Hickman Mills School District, but a report out Tuesday raises concerns about Grandview's financial management.

Schweich's office released its audit of the Grandview School District, which found that administrators misspent bond proceeds and had money missing from its financial ledger. Overall, the district's performance was characterized as "fair" by Schweich's audit, which means it found one or more issues that administrators must heed immediately.

According to the audit, Grandview issued several series of bonds under the federal Qualified Zone Academy program. The program, roughly speaking, allows school districts to issue bonds in which bondholders receive a tax credit instead of cash and interest. Under the QZA, school districts have to fetch commitments from private interests to receive either cash or equipment contributions, or other types of in-kind assistance. 

Schweich's audit found that the Grandview district issued $8.2 million in QZA bonds since 2008 with an unnamed local bank that hasn't made any contributions to the school system as required under the federal program. The bank is now under new ownership and apparently does not plan to honor its commitments.

Furthermore, the school district used some of the proceeds under the QZA program (meant for building renovations, new equipment purchases, teacher training or education program development) to buy football uniforms. The Grandview district responded that the uniform matter was an oversight.

The audit also tried to reconcile the district's bank account with its financial books, but found that $35,000 went missing. The district responded that it has worked to reconcile all its accounts.

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