Schools audit finds Metro lax, not fraudulent

By JAIME SARRIO • Staff Writer( Tennessean) • September 26, 2008 Metro school leaders sent computers for needy students to the wrong schools, couldn't find projectors and other equipment when asked and paid some teachers out of the wrong accounts, a state audit released Thursday revealed. Its authors found no evidence of fraud but wrote the district's history of lax bookkeeping and poor internal communication makes the district an easy target for abuse. The Tennessee Department of Education took a deeper look into Metro's finances after a routine spring check-up was stalled by the district's inability to produce paperwork on its spending. The state, which allocates federal grants, slapped a high-risk label on Metro schools in April. The label endangered $35 million in federal funds bound for Metro students and prompted the in-depth audit. In the meantime, state officials installed a new leader over Metro's federal grants office, Kecia Ray, and added new positions to help with the workload, district spokeswoman Olivia Brown said. She said the district is taking other steps to move forward and "be transparent so it is easy to see where the money is, where it went and how it is being utilized." For the next year, the state will monitor how Metro uses its federal funds. Each month, the state will release more federal money as the district proves it has fixed its problems. "This is a very unusual move for the state and one we have not done so tightly before," said Julie McCargar, executive director of the state's office of federal programs. "We're using a lot more control to ensure these things are in place." Other issues found in the audit included: • Metro couldn't ensure grant money was allocated and spent within the grant's approval period. • Metro didn't follow federal regulations in selecting vendors and contractors. • Employees didn't sign documentation of their work. Part of the problem was Metro's short-term approach, McCargar said — fixing problems long enough to get approved for federal funds that year but skipping long-term, systemic changes. The audit stopped short of placing blame for the mismanagement, but McCargar said it was the previous administration. Schools Director Pedro Garcia left in January after conflict with the school board over his management. Garcia didn't return messages requesting comment on the finances. Many must take classes The state is requiring district employees to take classes on how to manage federal funds, and a consultant will visit for weekly progress checks. If the district follows orders, its "high-risk" status will be reviewed again in July. But for some, the damage has already been done. Michael Holt, a taxpayer living in Bordeaux, said he does not think school officials are held accountable for how they handle money. "What you have is people who are educating our children — and that's a deep passion — but I think these people think they are owed any sum of money to do whatever they want to with it," he said. "And they'll spend money rather like it is their own." Mayor Karl Dean said that while he was happy the audit showed no wrongdoing, it's important that the public trust how tax dollars are being spent, especially when education is getting so much of the pie. "Because for me, politically, you're putting your credibility on the line when you say let's give money to education," he said. "There's got to be a sense it is going for the right purposes. It's going to be a challenge continuously."