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Audit Faults Louisiana's Recovery School District's Tracking of Property

Louisiana's Recovery School District has failed to properly track thousands of dollars worth of property purchased with public money, according to a state legislative audit.

The audit, released on Wednesday, said that the Recovery School District, the state-created school system that took over most of the schools in New Orleans after Hurricane Katrina, regularly did not follow state timelines in reporting the acquisition of moveable property.

The audit found that for the ninth straight year, the RSD did not follow state regulations in maintaining an accurate record of equipment that it owns. Louisiana law requires that all movable property that cost at least $1,000 be tagged with an identification code and that a record be sent to the state within 60 calendar days of purchase. 

Between July 1, 2014 and June 30, 2015, for example, the RSD reported $709,295 worth of purchases that had been made with state and federal money three to 85 days after the required 60-day reporting deadline.  And when those assets were recorded, the notation was done incorrectly, the audit said.

The RSD's  annual certification of inventory report was not approved this year because of an "unacceptable" amount of current-year discrepancies. Among the discrepancies: $808,379 in missing property for the current year and  $6.1 million from the previous three years, the audit said.

The audit also noted problems with the RSD's payroll record-keeping. In the 2015 fiscal year, the RSD did not enter the separation dates for 96 employees in a timely manner, possibly leading to overpayment to 16 employees to the tune of $5,338, according to the report.  From December 2013 to June 2015 it's possible that the RSD overpaid 49 employees about $32,214, the report said.

In two November responses to the audit, Patrick Dobard, the Recovery School District superintendent, concurred with the bulk of the findings.

Dobard said that the school system had made "tremendous progress" in addressing the concerns about property tracking. However, one of the two members of the property management staff left in June, leaving the department short-staffed. The reporting problem, he said, was due not to a "lack of internal processes or control" but staffing.

He also concurred with the findings on the reporting discrepancies that led the state to disapprove this year's report. But Dobard also noted that that report also included about $2.1 million worth of previously unreported items. Many of the items in question past were their useful life and had essentially no monetary value, he said.

As for the payroll issue, he said that payroll was now handled by the state and that processes and controls were in place to ensure that employee separations are accurately recorded.

Laura Hawkins, an RSD spokeswoman, told the New Orleans Times-Picayune that the reporting gaps had to do with staff  "turnover and a complicated disposal process"  at the charter schools—not theft—and that most of the equipment was outdated computers. The RSD was working with the charter schools' staffs to include missing items in their annual reviews, she told the paper. 

You can read the full report, which includes Dobard's responses to the findings, here.

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