The review noted at least one instance where it appeared contracts were intentionally divided to avoid the threshold.
Also found were transactions where contract documents couldn’t be located, contracts where price limits were exceeded without getting amended, contracts approved without a dollar amount specified and contracts missing signatures.
However, at the meeting, Crutchfield said no transaction was made for a purpose that wasn't included in the budget.
“This is a process that I think has been meaningful and helpful and will certainly allow us to make some changes to our processes,” Board Chairperson Mary Ann Wolf said at the meeting.
Jonathan Scott, the interim finance director for CHCCS, said the district has worked hard over the last eight months to implement new procedures to ensure this won't happen again.
“The crux of what happened is there was just a breakdown in internal control, and contracts got out without board approval," he said.
He said these new procedures have led to more contracts coming before the board. Between January and December 2019, just five agenda items requesting contract and large dollar purchase approvals were brought to the board. From January to June 2020, there were 28. Crutchfield estimated that the board should deal with 25-35 annually.
The review also looked at a Chapel Hill High School construction project at the request of the board, and recommended the board include a percentage for contingencies in construction contracts to avoid having to approve small contract changes.
Several more recommendations for process improvements were included in the review. During the meeting, Crutchfield said these recommendations include:
- A more thorough budgeting process
- Better communication of the budget
- Better documentation of financial transactions
- Regular purchase and contract training for budget managers and their assistants
“In order for these recommendations to be implemented, the Business and Financial Services Department will need additional staffing,” Crutchfield said during the meeting.
Riza Jenkins, president of the CHCCS PTA Council, said implementing measures that ensure transparency and accountability should be a priority moving forward.
“There are some process and procedure challenges that the district has that they probably need to tighten up,” Jenkins said. “So I think they need to address those, but then also put in measures for the public to ensure accountability and transparency.”
Crutchfield said digitizing financial records, which the district did during the 2019-20 fiscal year, can help with public record accessibility.
The review also recommended the creation of two committees, the Building and Grounds Committee and the Curriculum Committee. The Building and Grounds Committee would review construction projects, and the Curriculum Committee would review school improvement plans, among other duties.
Changes to various board policies, like adding a section to board policy that would require board approval for multiple contracts with one vendor that result in over $90,000 in payments, were also recommended.
Because several recommendations were given, board members emphasized the importance of creating a timeline to prioritize them. They also discussed contracting another financial review.
“We should think about the same time next year having another review completed,” Wolf said at the meeting. “It gives us a chance to go through the whole cycle again, and it feels like the right time.”
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