Originally Published: September 4, 2003 6:10 p.m.
PRESCOTT VALLEY — The Humboldt Unified School District (HUSD) remains short of compliance with Arizona's Office of the Auditor General, but it continues to make headway in shoring up its budget woes.
In her department's audit findings for the 2000-01 school year, which went to the HUSD governing board Aug. 22, state Auditor General Debra Davenport determined the district still had not complied with the state's Uniform System of Financial Records (USFD).
Last December, Davenport sent HUSD a letter stipulating that the district had a 90-day deadline to correct its problems. HUSD promptly replied to the correspondence, stating that it would work to correct the deficiencies.
Last month, Davenport completed a status review of HUSD accounting deficiencies for the year ending June 30, 2001, and realized after accessing 2002 single audit reports and a compliance questionnaire that still not enough had been accomplished on the district's end.
Kirk Waddle, HUSD's director of finance, has had the monumental task of righting the district's previous wrongs — mistakes that occurred two years before he took the job.
Waddle said Wednesday that HUSD remains 75 percent compliant with the state's routine audit and that he believes the district will reach full compliance by March or April of 2004.
"It's hard to go through," he said of the auditing process. "I can only control going forward. We are implementing the state auditor's recommendations as quick as we can."
The state reported that for the 2000-01 fiscal year, HUSD was deficient in its controls over purchasing accounts and general accounting records. The district's competitive bids for goods and services and its contracts have to be reported correctly and in a timely fashion, things it either struggled to track or failed to do.
More importantly, the auditor said in her report that the district exceeded its maintenance and operation budget and unrestricted capital outlay funds budgets by $587,960 and $76,588, respectively, for the year ending June 30, 2002.
The district not only overspent in these areas, it also had difficulty controlling its payroll. Waddle said the district continues to strive toward compliance, but the payroll issue has been rectified.
"You don't fix five years of problems in three months," he said.
In light of the deficiencies, Waddle, HUSD Superintendent Henry Schmitt, and one of the district's school board members will review the auditor's findings with the assistance of Arizona's State Board of Education in October or November.
A schedule will be set for the meeting and a timeline established for HUSD to become fully compliant under USFR guidelines. A follow-up meeting will then take place, after compliance is in order, to ensure the district follows the right path.
"The recommendations are very straightforward," Waddle said. "We corrected most of them."
HUSD's business office is currently under the supervision of Yavapai County financial oversight, which forces the district to reach compliance at a quicker pace and change previous, poor accounting habits. District accounting records stay with the county treasurer, a practice that, until now, HUSD had abandoned for three fiscal years.
Yavapai County School Superintendent Paul Street and his office staff have a reputation for being aggressive in carefully recording expenditures. Janet Leur, the county's accountant, has been working feverishly to get HUSD's accounts in balance.
"Had HUSD been under county oversight on the overspend, corrective action would've been taken a lot sooner," Waddle said. "Dr. Street's very strict at monitoring that. It gives us confidence when submitting vouchers and is insurance for the taxpayer."
By the end of the week, HUSD will be fully reconciled with the county treasurer's office. That puts the district one step closer to getting back in the good graces of the community and, eventually, the state.
"We have a good working relationship," Waddle said of HUSD and the county, both of whom have been collaborating since last January to balance the district's books. "We switched to a new accounting system that 75 percent of the counties use."