The District government has failed to adequately monitor its school modernization program, leading to violations of multiple laws designed to improve transparency and accountability, according to a report being released Wednesday by the Office of the District of Columbia Auditor.
The report, covering fiscal years 2010 through 2013 and $1.2 billion in spending, found that the Department of General Services and D.C. Public Schools did not provide basic financial management, allowing for the misuse of taxpayer funds.
“Across the city, public school students are benefiting from modern, new facilities, and there is much to commend in the priority given to school construction,” said D.C. Auditor Kathy Patterson. “But District resources are finite. We owe it to taxpayers to see that modernization funds are spent well and prudently, to assure our ability to complete the task of upgrading all of our schools.”
The capital program came under new scrutiny this year after dozens of school projects were pushed back in the renovation queue in Mayor Muriel E. Bowser’s $1.3 billion, six-year school construction plan. The changes were the result of major cost overruns and a slowdown in capital spending as the city prepares to pay down what amounts to a major debt load after several years of aggressive borrowing.
In a letter responding to the report, Jonathan Kayne, interim director of the Department of General Services, said there are shortcomings, but he also defended the program’s accomplishments.
“While DGS acknowledges the need for immediate corrective action to improve the school modernization program, the program has numerous successes that have contributed to the quality of our infrastructure and education, and even the quality of life more broadly for District residents,” Kayne wrote.
The agency plans to provide a more complete response at a D.C. Council oversight hearing scheduled for July 8.
The council passed the School Modernization Financing Act in 2006 to begin updating the city’s aging school facilities after years of complaints, litigation and widespread fire code violations.
In its early years, the program was managed by D.C. Public Schools through the Office of Public Education Facilities Modernization. In 2011, DGS assumed oversight and management of the building plans.
Since 2007, the city has paid two D.C. contractors as part of a partnership to perform the day-to-day management of each construction project.
The firm received $37 million in management fees during the four years, but the city provided only “limited supervision” of the work, the report says.
Specifically, it found that DGS did not ensure that contractors adhered to the terms of their contracts, including sharing any savings during projects with the District. The report cites inaccurate accounting of the total costs of each school’s modernization spending, and in many cases, the city kept limited documents to justify cost reports. The report found 75 payments for which DGS had charged expenditures to the wrong school project, representing nearly $14 million.
And the auditor found that approximately $45,000 meant for schools was spent on parks.
To guide funding decisions, the school modernization law required the mayor to develop and maintain a Master Facilities Plan, assessing the condition of each school building, capacity and any recommendations for consolidation or closure, as well as a capital improvement plan with a school-by-school breakdown of proposed spending.
Two master plans were developed in 2010 and 2013, but the report calls it a “largely inconsequential document” that did not reflect the actual selection of schools for modernization. In early years, the capital plan did not include school-by-school funding allocations.
“It has proven difficult, if not impossible, to determine how, when, why, and by whom schools are selected for modernization,” the report says.
The law also called for an 11-member “Modernization Advisory Committee” that would provide oversight and monitor spending, but the committee stopped meeting in 2008 after members said they failed to get staff support from the D.C. Council.
Cost overruns have been a consistent problem. The 2010 Master Facilities Plan included cost standards for modernizations, with budgets expected to fall in the range of $210 to $255 per square foot. But five high school projects reviewed ranged between $259 per square foot at Eastern High and $348 per square foot at Woodson. Projected costs for ongoing projects are higher: Roosevelt’s upgraded facility, scheduled to open in 2016, is expected to cost more than $400 per square foot; Duke Ellington School of the Arts is expected to cost more than $1,000 per square foot.
The law also called for an annual audit, but just two have been conducted in nine years. The last audit, in 2011, had similar findings, including poor systems for oversight, inaccurate vendor payments and spotty bookkeeping.
The next audit — for fiscal 2014 — is getting underway and is expected to include an investigation of the cost increases at Duke Ellington.
The authors of the report said they hope to provide constructive feedback so the city can “right the ship of school modernization.”