Audit Uncovers Serious Problems at Department of Education

(Sean Whaley/Nevada News Bureau) – An audit of a $92 million grant program created to improve student achievement in the public schools has identified numerous concerns, from inappropriate purchases to purchases that were made prior to approval by the Nevada Department of Education.

The innovation and prevention of remediation program was created by the 2005 Legislature, and the legislative audit reviewed the first two years of funding in Fiscal Years 2006 and 2007.

The audit, reviewed today by the Legislative Commission’s Audit Subcommittee, found $580,000 in expenditures by schools and school districts that were not authorized by a panel created to review the grant requests. One example was the Clark County School District’s purchase in 2006 of a $200,000 educational software program, a type of purchase specifically not authorized by the review panel, the Commission on Educational Excellence. No payback was sought by the department.

The audit also found $5.1 million in grant funds spent by schools and school districts prior to receiving approval for the expenditures from the commission.

In some cases, items rejected by the commission were amended back into grants by schools and school districts and subsequently received funding.

Schools also did not return unused funds in a timely manner, resulting in $45,000 in lost interest earnings that could have been earned by the Department of Education. Returned money also was not always deposited timely by the Education Department. In one case, the Washoe County School District returned $735,000 in unspent funds in August 2007, but the check was not deposited by the agency until December 2007.

The audit also determined that there was inadequate tracking of purchased items. Auditors could not find 6 percent of the items sought out in the review worth $170,000.

Other issues were also identified in the 47-page audit.

The audit covered the first two years of the program when $81 million of the fund was spent by school districts and schools over two years. The program was continued in the last budget, but no funding was appropriated for the program in the current budget.

Keith Rheault, superintendent of public instruction for the Education Department, acknowledged the many issues cited in the audit. Sixteen recommendations from auditors were accepted by the agency to fix the concerns if funding is provided again in future budgets by the Legislature.

Rheault told the legislative panel many of the problems occurred in the first round of funding due to the rush to get the money to the schools. Many of the concerns were corrected in the 2008 and 2009 funding cycle, he said.

In his official response to the audit, Rheault also noted that no additional staffing was provided to handle the new grant program. A request for additional positions in the 2007 legislative session was not funded.

While the distribution of the grant funds saw numerous issues in its first two years, Rheault said he believes the vast majority of the grant money was spent appropriately by the schools and school districts to focus on student achievement. He also attributed improved student achievement identified in recent reports in part to the programs and equipment purchased through the program.