After a years-long push by board President Jann-Michael Greenburg, the Scottsdale Unified School District has made strides towards increasing its internal auditing capabilities.
But the district will not be hiring its own auditor in the foreseeable future.
Instead, on Feb. 16, the SUSD Governing Board approved an intergovernmental agreement with Scottsdale to have the City Auditor provide auditing services.
The district will pay the city $90,000 to audit the ongoing Hohokam Elementary renovation project.
The city, which has had its own internal auditor since voters approved a City Charter change in 1988, is charging the district $90 per hour after estimating the audit would require 1,000 hours of work.
The Hohokam audit will function as a test case of sorts and could pave the way for further collaboration between the city and district.
The agreement, which must still be approved by City Council, is valid for five years and can be modified for increased costs and additional audits.
The Governing Board and City Council would both have to approve any additions, said Jennifer MacLennan, the district’s outside counsel.
City Council is scheduled to consider the Hohokam agreement on March 16.
The intergovernmental agreement was approved on a 4-1 vote after member Patty Beckman cast the lone no vote.
Beckman said she supported an agreement between the district and city but took issue with the fact that the board did not have earlier discussions on the audit cost or selection of Hohokam Elementary.
“The reason I supported an auditor…in the first place was specifically to make sure that what was being audited was what is something that the board wanted audited,” Beckman said.
Beckman said she did not want the superintendent or any board president to be able to dictate audit subjects.
“You can see where that can go a little bit awry,” Beckman said.
Greenburg said he would like to see the formation of a committee that would make audit recommendations to the board.
Superintendent Dr. Scott Menzel said he was “agnostic” on whether the first audit should focus on the Hohokam project or another recent rebuild like Cherokee Elementary.
District spokeswoman Nancy Norman told the Progress that SUSD leadership has no specific concerns about the Hohokam project.
Rather, the district is hoping that by auditing at a recent construction project, it can learn ways to improve processes for future projects funded by the 2016 bond.
Menzel recommended auditing a construction project instead of a smaller item like a district department, because it could directly impact those future bond projects.
“It’s that learning from the audit that can be applied to both the Kiva and Pueblo projects that I think is the value or potential value of choosing a construction project versus something that is a smaller scale,” he said.
Beckman said she believed the price tag was too high if the district did not have specific concerns about the current Hohokam rebuild and questioned why it did not put the audit contract out to a public bid.
“We just had a deep conversation about paying our employees and making cuts, etc., and this trial balloon we’re testing out is $90,000,” she said.
MacLennan said because “the city and the district are recognizing that there’s a joint benefit to having the audit completed,” an IGA “takes it out of a procurement practice.”
She said the city benefits by having a better understanding of the tax concerns of its residents impacted by the school district and the district will benefit from the city’s audit capabilities.
Menzel and Greenburg said Scottsdale’s rate is competitive and noted City Auditor’s staff includes two individuals with public school district experience and others who have worked on audits of government construction projects.
SUSD has faced significant legal issues connected to school rebuilds in recent years.
Under former Superintendent Dr. Denise Birdwell, the district was the subject of an investigation by the Arizona Attorney General’s Office over allegations it violated state procurement laws when an architect hired by the district allegedly sought to steer bids for rebuilds at Cheyenne Traditional School and Hohokam Elementary to specific contractors.
The state and district agreed to suspend the Hohokam project and convened a new contractor selection committee to rescore bids for the Cheyenne project.
The district settled a complaint with the Attorney General in 2018, agreeing to a $5,000 fine and to perform procurement audits and annual training for all financial and procurement staff for three years.