UPDATED: Overtime, recordkeeping violations for Capital School District
UPDATE: Saturday, Jan. 11 at 11 a.m.
This story has been updated to include Capital School District’s responses to the findings.
Delaware State Auditor Kathleen McGuiness published the results of an investigation into Capital School District’s Building and Grounds Department Jan. 8. She found violations of union contract overtime provisions and work requirements, inappropriate purchases, misuse of fleet vehicles and misuse of bid authority.
The state auditor’s office received multiple hotline complaints about violations in the maintenance division between July 1, 2018 and March 31, 2019, McGuiness said in the report.
Capital School District responded to each finding on pages 14 and 15 of the report.
“The Capital School District will take into consideration all the recommendations, and we don’t believe that everything was presented included all the facts,” superintendent Dan Shelton said.
The district believes their contributions should have been considered in the investigation.
“The facts that we presented were included as an afterthought instead of included into the report,” Shelton said.
Some of the findings
Violations of overtime provisions
Management is not complying with the employees’ union contract with the Delaware State Education Association, the state auditor wrote.
Only one employee was paid overtime between July 1, 2018 and March 31, 2019, and management did not post the overtime opportunities for the other employees to see.
Management should give overtime jobs to the employee who has the least amount of overtime hours, the report said.
RESPONSE: The union contract changed two years ago to allow the school district to pay maintenance employees compensatory time instead of overtime when they completed scheduled work outside school hours, Shelton said.
The only time the district pays overtime under this new contract is for emergency calls. “All employees are on the call list. Overtime information is posted in the office,” the district wrote in their response.
Only one employee received the overtime because that employee answered and responded to emergency calls, Shelton said. The potential solution is to move that employee, the maintenance supervisor, off the contract, he said. “You have to have someone answering the calls.”
HVAC services were performed without the appropriate state license and Environmental Protection Agency certification, the report said.
One maintenance employee performed refrigerant-related services 27 times before getting the required certification. Another employee performed Heating, Ventilation, Air Conditioning and Refrigeration work 32 times without a proper state license or supervision from a licensed technician.
Beyond environmental, health and safety hazards, an unlicensed or uncertified technician’s work can cost the school district fines ranging from $47,357 to $378,852 if it’s an ongoing occurrence.
RESPONSE: The employee referenced was not performing refrigerant work, but troubleshooting the problem and then referring to a professional.
The school district has credit arrangements with 23 retail stores, which allows maintenance employees to sign for purchases as items are needed. All but two have not been approved by the Secretary of Finance as required. Some of these vendors include Rumsey’s Electric, Meineke, Dover Plumbing, Sherman Williams and Dover Building Supply.
The second violation was the purchase of two HVAC units, costing $6,500 each, a year before they were installed. Buying equipment so far in advance goes against “good purchasing practices,” the report said.
The third violation was an unauthorized petty cash account kept at an employee’s home.
Two drain pans for the HVAC system were delivered to Dover High School and turned out to be defective. They were never recorded on an equipment list and then sold as scrap metal. The proceeds of that sale went into the unauthorized petty cash account, according to the state auditor’s report.
RESPONSE: “All purchases are verified by the Supervisor of Buildings and Grounds. The addition of work order numbers to purchases was implemented. As a result, invoices will be tied to specific work orders,” the district wrote.
The school district does not use credit cards or have any credit agreements with their vendors, Shelton said. By law, the district must first receive a product with an invoice from the company, and then they pay it.
Misuse of vehicles, no GPS
The state auditor found the district was unable to monitor vehicle use because most do not have GPS as required, there was no key inventory for fleet vehicles and the vehicle listing was incomplete.
The district owns 56 vehicles, and all maintenance employees have access to keys, kept in a box in the maintenance building. There is no key inventory or record. Only two vehicles have required GPS tracking.
Five trailers, one storage container and one car were missing from the district’s vehicle listing.
RESPONSE: The key box contains backup keys, so employees can move a district vehicle in case of emergencies, the district wrote.
Most of the district’s cars are older models that do not have GPS installed, Shelton said. “When we get new ones, absolutely they’ll have GPS in them.”
To install GPS systems in the current vehicles, the district will have to pay in the ballpark of $200 per month in fees, he said.
Misuse of bid authority
Purchases were split into multiple transactions for similar services, the report said.
Instead of adding up all the services provided by Green Blades Irrigation and Turf, totaling more than $60,000 between July 1, 2018 and March 31, 2019, the school district kept them separate. This allowed the district to avoid using a purchase order, which must go to the state for approval.
The state requires a purchase order for any amount over $5,000.
The report includes other vendors that provided services exceeding $5,000, for which the district did not obtain a purchase order.
The state has a higher purchase order threshold for public works projects, but the report found that Capital School District applied the larger public works threshold for services which were more routine maintenance.
RESPONSE: The school district did not intend to misuse bid authority, they wrote. “When there are emergency repairs that need to be done in the buildings, we reach out to vendors that can come out immediately and resolve issues that maintenance staff cannot address.”
“Some vendors lack in how they prepare their billings. The District has no control over how and when they bill,” the district wrote.
Capital School District should strengthen internal controls to ensure the school district not only follows required contracts, licenses, and certifications, but also prevents any potential misuse of assets. Full report here.