After spending more than a year reviewing how the district spent $1 billion in sales tax money, auditors found multiple ways that the DeKalb County School District failed to effectively manage the funds.
Auditors from Plante Moran PLLC presented a draft executive summary of their findings Thursday to the district’s audit committee. A final report is expected in the coming weeks.
The district did not maintain a complete, accurate and detailed ledger of sales tax transactions, auditors said. They also found accounting errors like duplicate invoices and incorrect payment amounts to vendors, and $2.1 million in expenses that were recorded to incorrect projects. And they found that the district did not have the necessary policies, procedures and controls governing the sales tax program.
Further, auditors found that 12,098 documents were lost, destroyed or unavailable for the audit. Put another way, about 25% of the documentation auditors needed to review was not available.
So far the auditors have not identified anything that made them suspect fraud or that could require legal intervention. Most of the current staff were not working during the period of time covered in the audit, district officials said.
One of the biggest recommendations from the audit: make sure staff members are trained to follow the district’s policies and procedures.
Chief Financial Officer Byron Schueneman said the district has already taken steps to address the concerns identified by auditors.
“From my perspective there’s almost an overcorrection of all of the controls to make sure that currently we are employing best practices,” he said.
Voters in DeKalb have approved an additional penny sales tax every five years since 1997. The education special purpose local option sales tax, or E-SPLOST, funds capital improvements — like the upgrades planned for Druid Hills and Cross Keys high schools, HVAC system replacements and the installation of security vestibules in schools.
The external audit cost more than $1 million and took more than 18 months to complete. It evaluated spending from E-SPLOST IV and V — the 10-year period between 2012 and 2022. The tax brought the district roughly $1 billion during that period of time.
Superintendent Devon Horton said the COVID-19 pandemic, staffing challenges and leadership turnover created a “natural storm” that allowed missteps to occur during the period of time auditors were examining. Horton, who joined the district in July 2023, said his administration is working to address the findings right away.
The state’s third-largest school district has been plagued in recent years by criticism over its maintenance and construction efforts. State officials threatened to withhold funding over poor conditions at Druid Hills High School. Then-Interim Superintendent Vasanne Tinsley implemented several changes to how the district approaches maintenance, such as more frequent inspections of campuses. And under current Superintendent Devon Horton, the district is about to begin a process that will include evaluating its future construction plans based on student needs.
Auditors blamed the district’s controversial transition to a new computer system in 2016 for financial and human resources information for several of the issues. The software implementation was years late and over-budget, and state auditors have previously said the lengthy transition has left the district vulnerable to accounting errors. The transition was completed in June.
It also contributed to record-keeping problems, where older records were stored incorrectly, lost in moves, never digitized or destroyed sooner than they should have been, DeKalb officials have said. The district is now spending $6.1 million to digitize thousands of paper copies of student, employee and operations records.
Auditors recommended that the district train employees on how to maintain records, review its procedures to make sure they adhere to industry standards, hire a third party to develop a way to track future E-SPLOST projects and strengthen oversights.
“Everybody that’s working here at this district is very committed to making sure that we can put a period at the end of all of these things so we can move forward,” said board vice chair Deirdre Pierce.
Board member Anna Hill said she’s looking forward to hearing from auditors whether the district did what it said it would do with the sales tax funding in the final report.
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