RubinBrown to conduct audit of Proposition P building program
August 31, 2005 - By MIKE ANTHONY
RubinBrown will perform an audit of the Proposition P districtwide building improvement program at a cost of $15,225, the Mehlville Board of Education decided last week.
The Board of Education voted 6-0 Aug. 25 to have RubinBrown perform the audit of the Proposition P districtwide building improvement program for the fiscal years ending June 30, 2001, through June 30, 2005. Board member Ken Leach abstained.
Board members voted 6-1 June 16 to issue a request for proposals for certified public accountants to audit the districtwide building program. Board member Karl Frank Jr. was opposed.
At the June meeting, the board voted 5-2 to defeat a "substitute'' motion by Frank to have Proposition P reviewed by both an independent committee and a CPA firm. Frank and Leach voted in favor of the motion. Opposed were President Rita Diekemper, Vice President Bill Schornheuser, Secretary Mike Heins, Cindy Christopher and Tom Correnti.
Frank originally had sought an independent panel to re-view Proposition P May 12, but five board members voted against the proposal, while Leach abstained.
After that meeting, district administrators and Diekem-per formulated a motion to solicit requests for proposals from CPAs to conduct an independent audit of Proposition P. On May 26, Schornheuser made the motion, seconded by Christopher, to seek proposals from CPAs to conduct an independent audit of Proposition P. But after Diekem-per called for discussion on Schornheuser's motion, Frank introduced the substitute motion calling for the formation of both an independent committee to review Proposition P and to seek proposals from CPAs for an independent audit of Proposition P.
After discussion, board members tabled the substitute motion to the June 16 meeting at which Frank said a review of Proposition P by an independent committee was needed to regain the public trust and move the school district forward. Without such a review, Frank contended, future efforts to acquire additional funding from the community would be certain to fail. But board members opposed to Frank's motion countered that any further review of Prop-osition P is unnecessary, as Frank's proposal would duplicate much of the work of the Proposition P Oversight Com-mittee whose membership still includes two board members, Diekemper and Correnti.
Voters in November 2000 approved Proposition P, a nearly $68.4 million bond issue funded by a 49-cent tax-rate increase. However, the board voted in November to approve a revised Proposition P budget of $88,927,440.
The revised Proposition P budget represents a roughly 30 percent increase — more than $20.5 million — over the $68.4 million building improvement program envisioned in 2000.
Chief Financial Officer Stephen Keyser told board members last week that a request for proposals for the Propo-sition P audit was sent to 13 accounting firms. In addition, invitations to bid were placed in the St. Louis Business Journal and the Call, he said. Three firms submitted proposals. A committee comprised of Keyser, Superintendent Tim Ricker, Assistant Superintendent for Human Re-sources A.D. McClain, Director of Facilities Rick Platz and Director of Accounting Brent Bell interviewed two of the firms and recommended RubinBrown.
"I did want to be sure the board understood that this audit is not covering a review of architectural or engineering requirements or building design. It is focused on the funds in and funds out, the district and procedures surrounding the management of the funds and the handling of the funds, but it isn't going to get into whether it was architecturally done properly or engineered (properly),'' Keyser said.
"One of the reasons we recommended RubinBrown is we felt that they had an excellent combination of both governmental experience as well as experience in the construction industry and bringing those two areas together on this particular audit made a lot of sense to us the way they presented that approach,'' he said.
Leach asked, "Was there any discussion of recoveries?''
Keyser said, "That was not part of the outline in the proposal that we put out ...''
Noting that he had specifically raised the issue of recoveries, Leach said that he had hoped that part of the auditing firm's fee could be funded through such recoveries.
"If you found anything that was definitely wrong where we could recover some monies that you would share in a percentage of that, is that correct?'' Leach asked.
But Jeff Winter of RubinBrown said, "With regard to your question, we would not be allowed to audit independently through any kind of recovery of fees. If we have any findings in connection with our audit, we would bring them to the attention of the board, but that would be the extent of it ... We're prohibited from obtaining any kind of contingency ...''
Diekemper said, "Then they would have a financial in-terest in the outcome of the audit.''
The audit process, Winter explained, will involve "auditing the monies coming in and, of course, the monies coming out, but it is an audit and it's not an audit of every transaction. It provides reasonable assurance with regard to the expenditures that have taken place, not absolute assurance. So a sampling technique will take place, but there will be a substantial amount of coverage with regard to the expenditures that were incurred. And then we would prepare a financial statement really of the activity of Prop P, both the monies coming in and the monies going out and also provide a reconciliation report with regard to the estimates and the actual expenditures and the overruns that took place and reconcile those two. And then, of course, issue a report on any recommendations or findings that we had ...''
Leach indicated that he wanted to postpone the vote and obtain more information about RubinBrown's proposal.
But Correnti made a motion to have RubinBrown perform the audit and Frank seconded the motion.
Referring to his original motion .... Frank said, "The only reason why we're even talking about this today is because of my request to the board (for) an all-inclusive investigation of Proposition P and I understand that this is a compromise from the board and I think that's better than nothing. But just like we're doing, we're trying to do a community engagement process to get a tax increase. I think in order to do this and properly put this to rest and I just want to make the statement that the community needs to be engaged as well in Proposition P because the public will still want to know. So I think, just like I said, I think this is better than nothing, but we're going to have to address Proposition P fully some day whether it's us on the board now or a board at a later date ...''
Diekemper said, "Well, I think this is a step above the original proposal and this is having people who are professionally trained to do what we would like for them to do ...''