SAN BENITO — San Benito school district officials are addressing an auditing firm’s recommendations based on its 10-month, $220,000 forensic audit focusing on district operations during a five-year period.
Earlier this week, the Fort Worth-based firm of Weaver and Tidwell presented its report to school board members before they publicly released its findings.
“Trustees will work collaboratively with district administrators to ensure that steps are taken to promptly and efficiently remediate the areas of concern,” board President Ramiro Moreno stated.
On Wednesday, board member Orlando Lopez said the auditors, who found no unlawful practices, presented recommendations.
Addressing concerns
“Under the current administration, the district has implemented multiple measures to ensure all acquisitions of goods and services are obtained in accordance with board policy and Texas law,” Superintendent Theresa Servellon stated. “Commencing the 2022-2023 school year, teachers and instructional assistants received the $100 supply allotment via their campus budget. All cumulative purchases with vendors that exceed $25,000 have been taken to the school board for approval. Cost-saving measures have been applied after a deep dive into our local, state and federal budgets. The realignment of these funding sources has proven to be advantageous in meeting our school district’s goals. I look forward to working with the school board and district administrators to examine each of the forensic audit’s recommendations and will implement appropriate change for the betterment of San Benito CISD.”
Audit’s scope
As part of the audit covering the period from Sept. 1, 2016 to Aug. 31, 2021, the auditors focused on six “highest areas of concern” out of the board’s requested 13 “potential areas of review,” the 120-page report states.
The areas included credit card expenditures, purchasing and procurement practices, federal funds and grants, payments to vendors and contractors for construction projects and facilities along with payments to consultants and professional services firms, the report states.
The audit included reviews of budgets from 2017 to 2021, reviews of 200,000 emails along with reviews of the district’s ledger and check register, from which auditors selected a “sample of transactions for further review,” it states.
The review included vendor solicitation, evaluation of proposals, quotes and bids as well as the district’s competitive bidding practices along with district and board purchasing, travel and credit card expenditures, it states.
$40 million bond project
The audit included a review of a 2018 $40 million bond project whose cost increased to $44 million, the report states.
“We observed a lack of transparency in the process that resulted in the board’s selection of the Brighton Group,” it states, referring to the Edinburg-based firm the past board hired to manage the project aimed at building a performing arts theater, an aquatics center and an indoor sports practice field.
“We were unable to identify any documentation in support of the board’s evaluation” of proposals, the report states.
As part of a 2019 contract, the district paid the Brighton Group $1.25 million based on estimated $30 million construction costs, it states.
“Based upon other reviews of other project management contracts at other school districts, fees are generally paid based on either project completion percentages each month, the completion of pre-determined milestones or based on hourly rates and time on the project,” the report states.
ABC Group
The audit also included a review of the district’s 2018 $180,000 contract with the ABC Group, which produced a quarterly district newsletter suspended in October 2020 as a result of COVID-19 pandemic, the report states, adding the contract automatically extended for two years in 2021.
“We did not identify evidence of the board discussing the renewal,” the report states.
By the time the contract expires in April 2023, the district is expected to spend a total of $540,000 for public relations services from April 2018 to April 2023, it states.
Maintenance and Operation
The audit also included a review of a $2.1 million Parsons Commercial Roofing project “procured through a purchasing cooperative,” the report states.
In their review, the auditors found “it did not appear that other bids or quotes were obtained.”
Federal fund expenditures
During their review, the auditors found $1.3 million worth of expenditures on the district’s American Express credit card, the report states.
“For eight of the 25 purchases under $50,000, we were unable to determine whether the district obtained multiple quotes,” the auditors wrote.
In 2019, the district procured CMAR services through requests for qualifications as part of the 2018 bond project, the report states.
“It did not appear that the district completed the second step of the CMAR selection process as defined under the Texas Government Code,” it states.
From 2018 to 2019, the district paid vendor Dezvia LLC $78,000 to remodel the central office as part of a project for which the auditors wrote, “it did not appear that other quotes were obtained,” the report states.
The audit included a review of the board’s 2020 appointment of Jeff Everitt & Associates, selected to serve as the district’s insurance agent, it states.
“The insurance agent of record services was not procured through an RFQ process … a possible violation of Texas Education Code Section 44.031,” the auditors wrote.
Credit card expenditures
The audit also included a review of 3,700 credit card transactions from 2017 to 2021, the report states.
During their review, the auditors found the district earned American Express “additional rebates” from 2017 to 2018, it states.
The audit shows the district redeemed American Express rewards points through cash gifts to the district office totaling $9,325, which was used for a Thanksgiving luncheon, the report states, adding rebates totaled $150,000.
As part of their review, the auditors found three transactions without purchase orders, three without supporting documentation and seven whose documentation was destroyed pursuant to a record retention policy, it states.
During the review, they found 30 instances in which former Superintendent Nate Carman stayed at Marriott hotels during district travel paid with a district credit card, with Marriott rewards points applied to his personal Marriott rewards account, the report states.
The review also found 16 instances in which board members or district employees stayed at Marriott hotels during district travel paid with a district credit card, with Marriott rewards points applied to Carman’s personal Marriott rewards account, the report states.
