YELLOW SHEET Office of the State Auditor of Missouri Claire McCaskill

Despite growth in district revenues, the district has spent more than it received three out of the last five years resulting in a decline of the cash balance in the operating funds.� During June 2002, the district borrowed $100,000 in the form of a tax anticipation note to cover expenses.� State law considers school districts to be in financial stress when tax anticipation notes are borrowed during February through June to meet current year expenditures.� Poor budgeting and expenditure procedures appear to have contributed to the district's current financial situation.

Controls over expenditures have been inadequate.� Payments were apparently made for personal purchases, and travel expenses appeared excessive.� Payments were made without the required purchase orders or vendor invoices, and were not reviewed for propriety.� Some purchases were not properly bid, and some expenditures appeared excessive or unnecessary for district operations.

Former superintendent, Dr. Brian Kirk, apparently made personal purchases with district funds.� Many purchases were made on the district's credit card, and some were on various charge accounts or through direct payments to vendors.� While some reimbursements were made to the district, the district has not been fully reimbursed for all personal purchases.

�        After an investigation in June 2001, Dr. Kirk returned several items to the district, and identified several additional items as personal purchases but did not reimburse or return these items to the district.� In addition, we noted other purchases that appeared personal that had not been identified.

�        The district credit card was frequently used for personal use.� Credit card charges totaled $17,782, $10,248, and $7,536; and personal credit card charges identified by Dr. Kirk totaled $5,487, $2,040, and $976 during the years ended June 30, 2001, 2000, and 1999, respectively.� The personal charges identified on the credit card statements were rarely supported by invoices, signed credit card slips, or documentation justifying the purchases.� Of the $8,503 of personal purchases, more than $2,400 was for cash advances.

Dr. Kirk made payments to the district and "applied" personal expense reimbursements and grant writing stipends against the personal credit card purchases.� However, the validity of the expense reimbursements and stipends is questionable.�

The district has not established a comprehensive travel policy and has incurred extensive travel expenditures during the past several years.� Expenditures charged to travel accounts, including travel expenses, conference registration, and membership dues exceeded $48,000 and $57,000 during fiscal years 2002 and 2001, respectively.� Several travel expenditures appear questionable or personal in nature.� Travel expenditures were not always supported by adequate documentation of actual expenses incurred.� Additionally, while some expense reimbursement claims did include supporting documentation, the validity of the documentation is questionable.

The district did not follow its established payment procedures policy.� Numerous payments were processed without adequate supporting documentation including $6,617 for appliances for the high school.� In addition, the district's current bidding procedures could be made more effective by adopting a more comprehensive policy.

Numerous expenditures were coded incorrectly and transfers were made without adequate documentation.� In addition, the budgets were not properly amended and monitored by the district.

Problems have been noted in the handling of state and federal funding.� The district was overpaid $213,363 in state funding due to inaccurate reporting related to the lease-purchase of a building for the Alternative School.� There were few procedures or controls over programs and grants and problems with grant programs were noted including, the Safe Schools Grant, the Vocational Enhancement Grant, the School to Work Grant, the Service-Learning Coordinator Grant, and the Goals 2000 Local Reform Discretionary Grant.

Employment contracts were not established or have not been retained for former district superintendents.� Some compensation policies and agreements were not approved by the School Board.

The transportation contract has not been bid since contracting with the current transportation company over 25 years ago.� The district has periodically renegotiated a contract with the company, without seeking bids from other companies, or evaluating the costs and benefits of owning its own transportation system.

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