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Originally published July 27, 2010 at 3:37 PM | Page modified July 27, 2010 at 5:46 PM

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Lynne Varner / Times editorial columnist

Lack of fiscal discipline in Seattle Public Schools

The Washington state auditor's scathing report on Seattle Public Schools illustrates how tough it is for the district to change from a culture too casual about spending other people's money.

Seattle Times editorial columnist

The latest state audit of Seattle Public Schools didn't tell me anything I didn't already know: The district is stuck in a culture of lax indifference when it comes to taxpayers' money.

Despite the last decade's phalanx of highly paid budget and money managers overseeing the district, few inroads have been made in transforming this culture.

Let's start with the audit's biggest discovery for the 2008-09 school year. The district overpaid at least 83 employees to the tune of $228,860. The district says the number of accidentally overpaid employees could be as high as 144.

Repayment plans have been set up for most of the employees. But others left the district, requiring costly measures, including collection agencies, to recover the money. Expect this debacle to reverberate as tax implications and impacts to the state retirement system unfold.

I get that Seattle is in the unique position of being the state's largest school district, with more than 8,000 employees and a half-billion-dollar budget. Accounting mishaps are not uncommon where there is a convergence of federal, state and local funding, each with its own rules. And this isn't as bad as the time the district overshot its budget by $34 million.

Still, the audit uncovered worrisome mistakes that seem less like incompetence and more like an ingrained comfort with spending other people's money without accountability.

Let's move from fattened paychecks to misplaced and stolen district property. (Feel free to pause here to get a drink, take some deep breaths — I had to.)

Thanks to generous voters of technology levies and other funding, Seattle's schools boast $56 million in multimedia equipment, including laptops, televisions, digital cameras and camcorders. But auditors found $7,412 in inventory missing.

The district's response — shoddy record keeping means some lost items will turn up eventually, others will be replaced — is too blasé for the gravity of this.

Another example. State law restricts government agencies' use of capital funds. Yet, the district spent $1.8 million encouraging small and minority-owned businesses to bid on district work. First, I don't buy that, in a recession, the district has to entice bidders for lucrative contracts. Second, because no one bothered to familiarize themselves with state law, the district must replace the money by dipping into its general fund. That's less money for the classrooms.

Next up was a series of careless mistakes, each one small in a budget the size of the district's, building a damning case of carelessness and lack of caring. The district was forced to pay nearly $1,700 in credit-card late fees in a single year.

Don Kennedy, the chief finance and operations officer hand-picked by Superintendent Maria Goodloe-Johnson, blames employees turning in late expense reports. For why receipts from three credit-card transactions totaling $5,172 were missing, Kennedy had no answer.

We do know what the $3,802 charged on a district credit card paid for: a retirement banquet.

The shoddy reporting and bookkeeping gets worse. Employees charged $250,000 in gas, not necessarily a problem considering the size of the district and the many employees who travel between schools. But employees are required to note how many miles were driven between fill-ups so usage can be tracked. Few did so. Some scribbled in one mile, others took wilder guesses. They might as well have written "none of your business."

Officials also cannot explain why in a 30-day span, nearly a quarter of fuel purchases charged to district credit cards occurred between 1 a.m. and 4 a.m. Auditors look at personnel records and found no employees working at those hours. Kennedy wonders if the gas pump time clocks were off. That would be some coincidence.

State Auditor Brian Sonntag has had enough. This audit appeals directly to the School Board, reminding them it is their duty to oversee district academics and finances. Sonntag is right. The public deserves serious and transparent fiscal accountability now.

Lynne K. Varner's column appears regularly on editorial pages of The Times. Her e-mail address is lvarner@seattletimes.com

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