State office conducting special audit on Dora schools

DORA — The state auditor’s office is conducting a special audit on Dora Consolidated Schools after school officials expressed concerns on the 12 findings from the district’s 2015-16 audit report.

The school district was flagged by Precision Accounting in Albuquerque for conflicts of interest on supply purchases and for alleged improper bidding practices that totaled $100,000.

Justine Freeman, deputy chief of staff for the state auditor’s office, said special audits are conducted “when issues arise in annual audits or when other concerns are raised.”

She said when the audit is completed, her office will publish a public report stating the concerns addressed and their opinion on them.

“In any audit, if there are potential criminal findings, they will be referred to law enforcement,” she said.

Freeman said since the special audit is ongoing, she cannot give any details. She did say the audit should be completed this summer.

Dora Superintendent Steven Barron said the school had the same auditor for more than a decade. It was required to change auditors for the next two years due to a new state statute; it says entities cannot maintain the same auditor for more than six years.

Barron said the district’s previous auditor had 12 findings in the 2014-15 audit year. Most of them had to do with documentation and records and were easy fixes, though some were time-consuming enough to require carryover into the most recent audit.

“Some of them you can’t fix because they stem from issues with taxes from the state,” he said. “Some of those write-ups are minute, little things.”

Barron said some of the documentation issues were also a problem, because the district changed business managers more than once in a short time frame.

But with a few of the new findings, said Barron, he and other school officials are still confused as to why they were findings at all.

“I’m hoping to get some clarification from our state auditors later on,” Barron said. “I welcome any audit, and if we’re not doing something right, tell us.”

Melissa Santistevan of Precision Accounting referred questions to the audit report, saying that the report cites the state law used in determining something as a finding.

Previous Dora schools auditor De’Aun Willoughby of Clovis declined to comment on previous or current audit results for the district.

Some of the audit findings for the school district for the 2015-16 fiscal year:

• The district’s maintenance supervisor purchases supplies and maintenance items for the district through a business in his name and then sells those items to the district at a markup, said the audit report.

There was also allegedly a signed conflict of interest statement by the maintenance supervisor attached to the transactions conducted, indicating knowledge of the conflict of interest.

Barron said the district’s maintenance supervisor had a paper goods business in Texas prior to coming to New Mexico. When the maintenance supervisor mentioned how much cheaper he used to be able to get supplies when he had his own business, Barron asked for his help in finding suppliers who could provide supplies for a better price.

Since the employee still had a license to purchase supplies in Texas, the district asked him to purchase the supplies for them, and they would buy them from him, said Barron, adding that the maintenance supervisor was just a middle man in their purchase of the supplies.

Barron added that he had also checked with the district’s previous auditor to make sure the way they were doing the purchasing was OK.

He said the maintenance supervisor is no longer helping the district get school supplies since the issue was flagged by the audit.

“We were saving 40 to 50 percent on all the paper goods, chemicals and everything,” Barron said. “I’m always working to save money for our district; that’s always one of my goals.”

Barron said the letter for the purchasing of maintenance items was not a letter admitting to a conflict but simply a letter with school officials acknowledging doing business with someone connected with the school. That’s required by state law when a district does business with anyone connected with the school, including parents of students, Barron said.

• The district obtained board approval for a silent auction, but the district was unable to provide the auditors with a listing of the inventory held for sale and did not notify the state auditor’s office or the public of the sale, the report said.

Barron said the district still has not conducted that silent auction since it’s still collecting items. That’s why notice has not been given to the public.

• Bills of sale between district vehicles and the capital asset listing reflected vehicles that the district sold that were not listed on the capital asset listing. The district also allegedly accepted a low bid on a sale rather than the high bid.

Barron said he has always kept copies of the titles for school vehicles in his office, and a couple of title copies for vehicles that no longer exist remained in his files in his office. He said those vehicles were removed from the school’s capital assets in 2008-2009.

Despite telling the auditor that he had just not disposed of the copies of the titles when the vehicles were de-commissioned, the district was written up anyway, Barron said.

He also said the district did except the high bid for the vehicles and not the low bid; he said the district has written documentation as proof.

• In regard to bids for service contracts, there were seven transactions for purchases greater than $5,000 in which the procurement process for obtaining quotes/bids was not properly conducted, the report said. This amount totaled to $100,041.

Barron said New Mexico Procurement Code states that if an item purchased costs less than $20,000, officials are only required to get the “best obtainable cost” and are not required to get quotes from various vendors. But the auditor wrote the district up for this anyway.

“We were punished for things we’ve been doing in the past,” Barron said. “It was a huge blow to us. I’m telling you I’ve never been through this before in the 16 years I’ve been in administration.”