LOUISVILLE, KY (WAVE) - A year-long audit of Jefferson County Public Schools, the findings of which were released on Wednesday morning, offers more than 200 recommendations that would affect classroom spending and addresses what State Auditor Adam Edelen calls "an unchecked bureaucracy that has become bloated and inefficient at the expense of the classroom."
The auditor's office said it "identified outdated and inefficient operations that cost taxpayers millions of dollars, a school board that doesn't provide adequate oversight, an inconsistent contracting process, a toothless internal audit system and serious security and privacy concerns."
When compared to five peer districts across the country, JCPS ranked at or near the bottom in categories pertaining to teacher staffing and expenditures for instruction. The district ranked highest in categories pertaining to school administration, support staff and instructional aides.
"This report paints a picture of a bureaucracy that benefits itself and keeps the board in the dark rather than supports excellence in the classroom and a public mission of transparency and accountability," Edelen said.
The audit, the largest ever undertaken by Kentucky's auditor of public accounts, was requested by JCPS superintendent Donna Hargens and the school board last year.
"Working together to maximize efficiency and, ultimately, positively impact student achievement has been a beneficial and powerful process," Hargens said. "These findings build upon our prior actions of reducing central office staff, increasing instructional dollars, and adding more supports in the classroom by providing us [a] roadmap to continuous improvement."
Board chairwoman Diane Porter said the audit "further empowers this board to confidently guide JCPS on its road to becoming the best urban school district in the country."
The five peer districts to which JCPS was compared were selected by auditors and former Kentucky Education Commissioner Gene Wilhoit. They include:
Factors used to determine these benchmark districts included factors such as enrollment, student demographics, socio-economic status and district budgets.
The comparison found that JCPS ranked:
"The number of school administrators and support staff as a percentage of total staff is nearly double the rate of one of the benchmark districts," Edelen said. "That indicates that much of the administrative bloat exists at the school level, not in the central office."
In addition, JCPS has three times the number of central department employees making more than $100,000 compared to one of the benchmark districts and the highest average salary. Currently, JCPS has 369 employees making more than $100,000.
"Yet, a survey of JCPS teachers found that the majority spend personal funds for the classroom, with most saying it is because the schools lack the resources they need," Edelen said. "Most spend hundreds of dollars a year. A teacher should have the prerogative to use personal resources for the classroom, but no teachers should feel they have to due to a lack of funding."
A survey of teachers at JCPS and 12 other Kentucky school districts found that JCPS places more restrictions on students' ability to take textbooks home. Edelen said this, coupled with JCPS having the lowest textbook budget among benchmark districts, risks putting JCPS students at an academic disadvantage.
"Obviously, this is also a state issue and one that needs to be addressed," Edelen said. "Our kids must have access to high-quality instructional material in order to compete globally."
The surveys also found that the trend of asking parents to supply long lists of back-to-school supplies is not sustainable.
Auditors also said they found significant weaknesses in the board governance structure with some board members acknowledging that they lack a depth of understanding necessary to effectively examine the budget without relying on staff.
"With a $1.2 billion annual budget, large student population and a number of other complexities, a highly-functioning board is an absolute must," Edelen said. "Relying on staff raises serious concerns about the board's ability to independently oversee the budget. This circumstance has been present in every school district where we have found problems."
Edelen recommended the board consider adding two "at large" members who would represent the entire school district, rather than specific divisions.
State auditors found that JCPS leaders don't readily know how many contracts the district has or how much they are worth. Auditors said they found more than 1,700 contracts with private vendors. That does not include professional service contracts under $5,000 or capital construction contracts.
"This is simply unacceptable," Edelen said. "Five years ago, the state began publishing all open contracts on a publicly-accessible website. Taxpayers deserve no less of JCPS."
Auditors reported a lack of monitoring and oversight of contracts, some of which are allowed to renew an unlimited number of times without alerting the board. In some instances, auditors said, signed, written contracts were not maintained. In some cases, contract terms were not met when payments were made and some payments lacked required supporting documentation.
"Creating a centralized, publicly-accessible database of contracts is imperative in the digital age," Edelen said. "Accountability demands precision."
Auditors found that JCPS operates a costly and inefficient centralized warehouse system comprised of 59 employees operating six warehouses that are charged with ordering, storing and distributing supplies across the district. Auditors said they could identify no benefits associated with the high cost of paying the dozens of employees or maintaining the buildings.
"It's not surprising that a billion-dollar entity has some inefficient and outdated ways of operating," Edelen said, "but it's hard to believe that an inefficiency that costs taxpayers at least $3 million a year has been ignored until now, especially in one of the global-logistics capitals of the world."
Edelen also said the district's recent internal investigation into abuses at Pleasure Ridge Park High School illustrates the need for a tight system of policies and procedures.
"When you don't have adequate and consistent controls over things like travel, credit cards, leave time, take-home cars and cell phones," Edelen said, "you are increasing [the] risk" of serious abuses or waste.
Auditors found that JCPS does not have a consistent policy for salaried staff regarding the issue of leave time for partial days. Central office administrators are not required to use leave time for missing a partial day of work, but most teachers are.
Auditors found that the focus of numerous internal audits performed each year was questioned. An annual audit plan was not established, the board lacked an audit committee to oversee the work and the internal audit director reported to the superintendent rather than the board.
"Scandals that have been uncovered at JCPS schools in recent weeks are likely to continue without a strong, independent internal audit function," Edelen said. "With 155 schools, neither the district's CPA nor the auditor's office could ever be expected to root out problems at the school level. That is why the internal audit structure exists."
Auditors also said they uncovered serious problems related to school safety plans and student privacy. JCPS lacks oversight over the development of safety and emergency procedure manuals for each school, according to the auditors' findings. As a result, they said, procedures established in case of an emergency situation may be outdated or may not exist. Auditors said they types of emergencies that should be covered in the manuals include abductions, bomb threats, flooding, building intruders and severe weather.
Auditors also found that JCPS did not adequately protect sensitive student data that is supposed to be confidential.
"School districts are not only expected to provide kids with a world-class education, but they are also obligated to protect them and their private data," Edelen said.
Subjects of review by the auditor's officer are expected to submit 60-day status reports. In addition, JCPS leaders have said they will provide additional updates in six months and one year.
"My ultimate goal for this review is that it serves as the catalyst for making JCPS one of the best school districts in the country," Edelen explained. "I applaud Dr. Hargens and the board for having the courage to ask for this, and I hope the work begins rather than ends here."
In response to the auditors' findings, JCPS issued a news release with the following quotes from superintendent Hargens:
"Working together to maximize efficiency and, ultimately, positively impact student achievement has been a beneficial and powerful process. These findings build upon our prior actions of reducing Central Office staff, increasing instructional dollars, and adding more supports in the classroom by providing us with a roadmap for continual improvement."
"I am pleased, but not surprised, that this review found no evidence of fraud or unethical behavior. The review also determined 'JCPS may not be employing an excessive number of central department staff.' We hope that will instill confidence in our community that our staff works with great integrity to improve academic outcomes for our students."
The release also included the following response from Jefferson County Board of Education chairwoman Diane Porter:
"This board of education has a clear vision: all students graduating prepared. To do so requires knowing where we excel and where we can improve. This review of district operations and governance further empowers this board to confidently guide JCPS on its road to becoming the best urban school district in the country."
JCPS also responded by saying the audit is the latest facet of its continuing improvement efforts and will help the district build upon improvements already made since Dr. Hargens' arrival on August 1, 2011.
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