Rockwood State Audit: Various Reactions

As the third largest school district in Missouri, State Auditor Tom Schweich admitted that $208 million within Rockwood School District is a large amount of cash flow to follow.

"We’ve audited a lot of entities, and I did find a positive attitude here in Rockwood, with the board. Let's wait and see after 90 days what's been done with the recommendations," Schweich said.

At that point, a state auditing follow-up team will return to do a second report. Schweich said they will determine a status for all the nine major categories of the report, citing items one of three ways:  implemented, in process or not implemented.

"I’m optimistic the matters we've highlighted in our audit report will be fixed," he said.

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Rockwood State Audit: Overall Performance is Rated "Fair"

Rockwood State Audit: The Findings Revealed

Rockwood National Education Association (RNEA) representative, Suzanne Dotta, said the audit findings are disappointing. "All the great work that teachers constantly do gets lost."

Dotta said she believed the poor decision-making highlighted in the audit was embarrassing, for the community and the district. "We are collectively better than this, but we've had a lack of leadership at the highest levels."

She said she was relieved to hear the district's board of directors and staffers were open to implementing changes.

Chesterfield resident and former Missouri senator Jane Cunningham, during Schweich's post-presentation question-and-answer session, asked how much money would have been saved had the deficiencies in internal controls not happened and better management procedures followed. 

"It's impossible to know, but it would be somewhere north of $1.2 million, given the overpaying to Glenn Construction Company due to change orders," said Schweich.

Ballwin resident Rob Thoele, in the same post-presentation session, said, “I’m pretty shocked by what we’re hearing. Sloppy is what comes to mind. Where do taxpayers get the confidence that Rockwood won’t fall back on these bad habits again?”

Schweich emphasized the district already has an annual, independent audit to assist with proper policies, but that those audits are not as broad as they could be.

Thoele, who formerly had served as a volunteer on the district's finance committee, said the district's rules and laws should be updated. "There's too much 'we've always been doing it this way.' It's not working, yet they put up a front. How much more waste has occurred in the district? Drastic changes need to be made in how this district operates."

Thoele told Patch he thought it was good for Rockwood to be challenged, now it's time for the district's leaders to "think outside the box."

"I'm glad our district is taking the auditors recommendations seriously. I was pleased to hear that our board had constructive and cooperative responses to the audit," said Rockwood School District resident Rhonda Costa, who recently volunteered to head the Proposition S citizens' committee.

"I am confident they will address the issues brought forth from the audit. It’s great to know they have already started working on these recommendations. As a taxpayer, that gives me confidence in our board members, and I believe these changes will make us a stronger district."

Given the district's multimillion budget and activities, Costa said the audit does help put the references to construction financial mistakes back into proportion.

Local resident and Picture Rockwood committee member Larry Feuerstein from Wildwood said during the question session he considered the findings material weaknesses. "As a taxpayer, I'd like to hear who owns these failures. What level of governing structure should be held accountable, the board, the staff?"

Schweich said, "What I don’t find constructive is to call people to the mat. We've done a thorough analysis. As long as it’s fixed, that's what's important."

Feuerstein asked Schweich to reconfirm those areas for which Rockwood did not agree should be corrected in the way the auditors had recommended. The two main areas for that were not agreeing about Steve Smith having a conflict of interest and the cost of performing an annual inventory of equipment.

"If you go through it, they agreed to implement 90 to 95 percent of the recommendations. Some, they already have been working on," said Schweich.

Eileen Tyrrell, co-founder of the citizen watchdog coalition Rockwood Stakeholders for Real Solutions thanked the state auditing team for their work during the question session. RS for RS representatives had petitioned for an audit to be done on Rockwood when they discovered what they believed to be financial discrepancies, and learned it had been 18 years since the last state audit on the district.

Schweich said he thought Rockwood's citizens had legitimate concerns. "But we did not find any resistance to our work at Rockwood. Tonight, while at this high school, I've seen typical school signs about respect, patience, self-control. I see a lot of that in this district."

Tyrrell, saying her heart is close to Eureka High School, asked Schweich about the $1.2 million wasted on Glenn Construction Company, and whether Rockwood could recoup that money. "This audit goes back to 2003, covering only four bonds. At Eureka, they are dying for a locker room. This money would have gotten them their locker room, and more."

He said the issue is "a tricky one," because the legal agreements were loosely worded. 

Tyrrell told Patch after the presentation RS for RS had discovered Rockwood's problems with Glenn Construction and the district's procurement cards during their own research. "We brought up those issues in January 2012. Dr. Borchers said they would change things before Proposition R. But they didn't. There's been a pattern with Rockwood of no change."

"No more words, they have to have action now. The district is not going to move forward until Steve Smith resigns from this board. They've been wasting our tax dollars. We're stunned they would fight back with the state auditors,' said Tyrrell.

Rockwood board of director and former president of the group, Steve Smith, told Patch he believed the state auditor's office "treated us fairly."

Smith said he only took exception to the verbal reference Wednesday night that he "knowingly" voted on district items that would generate more revenue for his then employer, Glenn Construction. "That's not true. I did not know when we approved change orders which ones would lead to additional billings for Glenn Construction, that's not the part of the business I worked with. During board meetings, when I did know about potential conflicts of interest, I left the room and did not vote on them."

Some Rockwood board of directors told Patch Smith was not even interviewed by the state auditing team, and they believed many points of confusion easily could have been cleared up if they had.

"The audit was a good thing," said Smith. "It pointed out that we're not crooks and scoundrels, and it leads us to good advice."

Tyrrell also said board of education members Janet Strate and Steve Banton had assured the public in 2011 that the district's practices were "above board," but she doesn't believe they were, given the audit results.

"Teachers and students are held accountable every day. If students did something like this, they would be expelled," Tyrrell said.

"Janet Strate should not run for re-election. Accountability is important. And Dr. Borchers should be dismissed. This all happened under his watch, and he didn't do anything about it."

Wildwood resident and Rockwood parent Dennis Broadbooks said the audit identified serious problems that need to be addressed. "We'll see in 90 days."

In the past, the district’s financial management has been recognized with a Moody's bond rating of AA2 and a Standard and Poor’s rating of AAA, making Rockwood one of only 68 school districts nationwide to hold such a high, outstanding rating.