COR - Senate Ed and House Ed

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ARIZONA STATE LEGISLATURE

Forty-ninth Legislature – Second Regular Session

SENATE EDUCATION ACCOUNTABILITY AND REFORM AND

HOUSE OF REPRESENTATIVES EDUCATION COMMITTEE OF REFERENCE

FOR THE SCHOOL DISTRICT PERFORMANCE AUDITS OF:

CASA GRANDE UNION HIGH SCHOOL DISTRICT

NADABURG UNIFIED SCHOOL DISTRICT

WICKENBURG UNIFIED SCHOOL DISTRICT

WILLCOX UNIFIED SCHOOL DISTRICT

MADISON ELEMENTARY SCHOOL DISTRICT

J.O. COMBS UNIFIED SCHOOL DISTRICT

Minutes of Interim Meeting

Thursday, October 28, 2010

House Hearing Room 1 -- 9:30 a.m.

Chairman Crandall called the meeting to order at 9:35 a.m. and roll call was taken by the secretary.

Members Present

Senator Sylvia Allen Representative Rich Crandall, Co-Chair

Senator Linda Gray Representative Doris Goodale

Senator Linda Lopez Representative Steve Court

Representative Eric Meyer

Representative Rae Waters

Members Absent

Senator David Braswell

Senator Leah Landrum Taylor

Ross Ehrick, Director, Division of School Audits, Auditor General’s Office, provided background information on school district performance audits and outlined a new approach to increase the number of audits (Attachment 1, Page 1). He introduced the presenters and
Debra Davenport, the Auditor General.

CASA GRANDE UNION HIGH SCHOOL DISTRICT

Vicki Hanson, Manager, Division of School Audits, Auditor General’s Office, noted that the audit report for the Casa Grande Union High School District (CGUHSD) was issued
November 2009 so there is no follow-up review. She gave an overview of the audit report (Attachment 1, Pages 1-3).

Rocco Sugameli, Assistant Superintendent, Casa Grande Union High School District, introduced school staff and thanked the Auditor General’s Office for the recommendations. He made the following points:

A strategic planning process was implemented and six priority committees were formed to address the audit recommendations.
A significant portion of the slightly higher administrative costs is due to the previous administration hiring a planning principal to open Vista Grande High School.
Credit card usage and feeding of employees at meetings has been eliminated.
As far as technology, two of the people listed are part of the Student Accountability Information System staff, over 600 computers were added with the new school, and there are two one-on-one laptop schools (Case Verde High School and Desert Winds High School).
Bus usage increased from 78 percent in January 2010 to 86 percent in September 2010.

Chairman Crandall pointed out that Representative Frank Pratt is present.

In response to questions, Mr. Sugameli provided the following information:

The evening high school is an alternative school for students with disciplinary problems or in need of credit retrieval.
Three security positions are open, but a decision has been made not to fill those until the security issue is addressed through the Effective Use of Resources Committee.
Standards for the Proposition 301 proposal were significantly increased this year and approved by Superintendent Dennis Dearden in consultation with Ms. Hanson. Improvements will continue through the High Student Achievement Committee.

Mary Ann Amerson, Human Resource Manager, Casa Grande Union High School District, advised that four school districts feed into CGUHSD and the population of freshmen each year is about 1,100.

Discussion followed about collaboration with feeder schools for food service, busing, etc.

Chairman Crandall noted that Representative Barbara McGuire is present.

In response to a question about school unification, Ms. Amerson related that a white paper was written citing the pros and cons, but no formal vote was taken by the school districts when the question was on the ballot. There were several questions on the ballot and many people were confused; however, the community does endorse collaboration, which is what CGUHSD is attempting to do.

Chairman Crandall remarked that CGUHSD’s transportation costs are the highest presented to the Committee and should be seriously reviewed. He added that he is anxious to see the six-month follow-up report.

NADABURG UNIFIED SCHOOL DISTRICT

Tara Lennon, Manager, Division of School Audits, Auditor General’s Office, noted that the audit report for the Nadaburg Unified School District (NUSD) was issued in December 2009 so there is also a follow-up report, both of which she reviewed (Attachment 1, Pages 3-4).

Gregory Riccio, Superintendent of Schools, Nadaburg Unified School District, stated that NUSD is a K-12 district with 1,250 students, 300 of which are bused to Willow Canyon High School in the Dysart Unified School District or to Wickenburg High School. At the time of the report students were bused to Peoria, which was a long distance, but that is no longer done. He introduced Sara DiPasquale, Director of Business Services.

He stated that when the report was compiled there were different times for different segments of the school population, but in order to save on bus routes and mileage, seventh and eighth grade students are attending one school, Desert Oasis Elementary-Middle School, from 8:00 a.m. to 3:45 p.m. Teachers are paid after Arizona’s Instrument for Measuring Standards goals are reached, which was accomplished in the last three years.

In response to questions, he advised that NUSD is located in Wittmann and includes a large portion of Surprise, part of Peoria and other unincorporated areas. It encompasses 170 square miles. Children bused to Willow Canyon High School have a half-hour ride and those bused to Wickenburg High School have a 45-minute ride. There are 850 students in K-8. The school district was approved for a secondary school and the board is considering a 7-11 grade high school. He noted that the curriculum is aimed at connecting students to postsecondary education. There is no funding to build a school but options are being explored. With a secondary experience, the children would not have to ride the bus so long.

Chairman Crandall congratulated him on the academic focus of the school district.

WICKENBURG UNIFIED SCHOOL DISTRICT

Ann Orrico, Manager, Division of School Audits, Auditor General’s Office, stated that the audit report for Wickenburg Unified School District (WUSD) was issued in February 2010 and a follow-up report was recently issued, both of which she reviewed (Attachment 1, Pages 4-6).

Senator Linda Gray assumed the Chair.

Howard Carlson, Superintendent, Wickenburg Unified School District, introduced Jim Serbin, Director of Business Services, and thanked the Auditor General and Ms. Orrico. He provided an alternative version of the chart in the performance audit relating to Festival Foothills Elementary (Attachment 2), noting that the administrative staff was reduced by 3.5 full-time equivalents and he anticipates more reductions. WUSD encompasses 916 square miles, and in the southern part of the school district there is a new community called Festival Foothills that includes a retiree side and a family side. Other developments will probably be built when the recession is over so the area is expected to grow over time. Festival Foothills Elementary is an excelling school as of this year, which also creates an opportunity for enrollment growth.

Superintendent Carlson related that Pulte, the developer, provided $350,000 this year and plans to provide $300,000 next year, which should bring WUSD to a point of sustainability. With ongoing enrollment growth, because of the long distance, the school district is considering providing an on-line high school opportunity and Internet on the bus to Wickenburg so homework can be done on the bus. He added that the Webb Center is a tremendous asset for the school district and community.

Jim Serbin, Director of Business Services, Wickenburg Unified School District, thanked the staff at the Auditor General’s Office for doing a professional job. He said before he was employed at the school district a new high school was built with plans for a large auditorium to bring cultural events to the community and educational opportunities to children through public-private partnerships. A group of people provided funding, along with a bond issue, to upgrade the auditorium to a New York City-style performing arts center. The Wickenburg Foundation for the Performing Arts was formed, which was able to get well-known donors to contribute money. The center was built and named the Del E. Webb Center for the Performing Arts. While the goals were met, the partnership arrangement did not meet Arizona State Retirement System standards so the necessary adjustments were made.

Senator Linda Gray commended the school district on its partnerships within the community and pointed out that it has the highest percentage of implementation of recommendations.

Superintendent Carlson stated that he and Mr. Serbin will be talking with Nadaburg personnel after the meeting about collaboration on administrative positions, etc.

WILLCOX UNIFIED SCHOOL DISTRICT

Vicki Hanson, Manager, Division of School Audits, Auditor General’s Office, stated that the audit report for the Willcox Unified School District was issued in June 2010 so no follow-up work was conducted. She reviewed the audit report (Attachment 1, Page 6).

Jim Foley, Business Manager, Willcox Unified School District, explained that Willcox is a farming and ranching community located close to the border. Prior to last year, the school district experienced declining enrollment, but some significant changes garnered more students and needed enrollment funds. The school district is going to the voters for a bond election to improve facilities. He made the following comments about the findings in the audit report:

A maintenance program called School Dude was purchased to handle transportation and facilities. He talked to Arizona Department of Education (ADE) personnel about the overfunding of $44,000 and resubmitted the reports. No direction has been given from ADE about returning the money yet, but the problem should be fixed shortly.
Regarding controls on the accounting system, a few extra people were listed due to a conversion in 2009, which has been corrected so now there is limited access.
In terms of technology, a new student accountability system was purchased and internal locks were placed on the server rooms. There were bars on the windows, but a broken window will be corrected. There was a shift in technology personnel and administration that the school district is trying to work through.
Much of the supplanting issue is due to the fact that many people do not have a good concept of the Uniform System of Financial Records or the Chart of Accounts, so training is underway.
Proposition 301 funds are being reviewed to make sure they are appropriately spent, and principals are required to provide additional documentation about who is to be paid and whether or not goals were met.

MADISON ELEMENTARY SCHOOL DISTRICT

Mike Quinlan, Manager, Division of School Audits, Auditor General’s Office, stated that the audit report for the Madison Elementary School District was issued in July 2010 so the follow-up report is not yet completed. He reviewed the audit report (Attachment 1, Pages 8-9).

Chairman Crandall resumed the Chair.

Tim Ham, Superintendent, Madison Elementary School District, thanked the auditors for doing a wonderful job and pointing out issues and internal controls that need correcting. He made the following comments:

Regarding transportation, some staffing changes were made. As to nonproductive use of bus drivers, about three years ago, it was difficult to attract drivers so full-time work and benefits were offered. The economy has changed, so drivers are now reduced to
30 hours per week, and aides in that area were decreased.
Proposition 301 was not mentioned, but an internal decision was made to make some corrections.
Internal controls have been addressed.
The school district will continue to work toward efficiencies, but not at the expense of academic performance.
Regarding plant services, the school district has just under 6,000 students and enrollment continues to grow. The school district brought on Madison Traditional School, but will no longer participate in that lease because the voters passed a bond to build a smaller school, which has a waiting list. A bond was passed with a variety of items to reduce energy costs that are currently being implemented.
The school district always strives to free up dollars for the classroom and utilize the money wisely; it will always be directed toward student achievement.

Chairman Crandall opined that the new Auditor General format of the AIMS scores by peer group and statewide provides a sense of how students are doing academically.

Superintendent Ham responded that blending the different groups provides a different picture and suggested that breaking it out would show how many students are excelling.

Senator Linda Gray noted that one school was only at 46 percent capacity and questioned why the board did not approve a traditional school at that location instead of building at another location.

Superintendent Ham said that proposal was considered, but the community is somewhat divided in terms of a traditional approach. The space will no longer be leased for the traditional school, and the bond passed last November allocating funds for a small facility will allow for growth but remain fairly small. Property was purchased at Maryland and 10th Street and that is underway.

Denise Storace, representing herself, related that she belongs to a Neighbors Growing Stronger Block Watch group that heard a school was being built on less than five acres of vacant land when there is already a school two-and-a-half blocks away at which concerns are not being addressed. A neighborhood meeting was held that over 60 people attended. One concern is open enrollment because 40 percent of the children are from an outside area for which people are concerned about paying. People believed the money from the bond was going to students, not to build a school. Attempts were made to contact the governing board, but the issue could not be discussed with any of the members unless Dr. Ham was present. She added that she saw an article in the newspaper about the Auditor General’s audit of the school district stating that there are 1,600 spaces for students, and people are wondering why another school is going to be built, especially in these difficult times. She asked how the community can become involved to change this decision.

Chairman Crandall remarked that the Committee Members cannot intervene between the voters in the school district who approved the bond and elected school board members, so the community will have to vote in people who represent their opinion.

J.O. COMBS UNIFIED SCHOOL DISTRICT

Vicki Hanson, Manager, Division of School Audits, Auditor General’s Office, stated that the audit report for the J.O. Combs Unified School District was completed in August 2010 so there is no follow-up report. She proceeded to review the audit report (Attachment 1, Pages 9-11).

Gayle Blanchard, Superintendent, J.O. Combs Unified School District, introduced
Karla Slovitsky, Director of Business Services. She conveyed that most of the findings correlate to the hyper-growth the school district has experienced in the last five to six years. She agrees with the findings and put together a team and action plan with timelines that is reviewed on a weekly basis. She expressed the hope that all of the recommendations will be completed by the six-month follow-up and made the following points:

Regarding transportation, an adjustment was made to the special education program so fewer routes are run. Fleet Vision software is being purchased to structure routes to be more cost effective. Procedures were in place for preventative and ongoing maintenance, but it was not documented, so software was ordered to allow for documentation.
The school district has a brilliant technology director with lots of knowledge about practices and procedures that need to be documented, so a committee is in place to move forward with that.
Language was added to administrative contracts to address the recommendations of the cell phone stipends. Additional controls were added for authorization of payroll vouchers. Computer access is now aligned with employee duties and responsibilities.

DISCUSSION

Senator Linda Gray questioned what can be done about funding for school bus transportation mileage since the amount never decreases once a certain mileage is achieved.

Mr. Ehrick replied that changes have been made to the formula and legislation was recently passed to cap the Transportation Revenue Control Limit, but it has not entirely addressed the problem. He offered to work with any Members on the issue, noting that there seems to be a disconnect between the formula and the actual cost to operate the program, as well as much disparity between school districts that make or lose a lot of money from the formula.

Without objection, the meeting adjourned at 11:40 a.m.

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Linda Taylor, Committee Secretary

November 3, 2010

(Original minutes, attachments and audio on file in the Chief Clerk’s Office; audio archives available at http://www.azleg.gov)

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COR – SENATE ED AND HOUSE ED

October 28, 2010

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