The report of an audit of the Lake Havasu Unified School District, conducted by the Arizona Auditor General’s Office and released last week, comes to no general conclusions but outlines a series of specific recommendations aimed at cutting costs and tightening regulatory compliance.

The office conducts audits of six to eight randomly selected school districts a year and has completed about 30 audits to date, according to Vicki Hunter, Division of School Audits manager.

“The reason these audits are done is to help districts identify dollars that can be moved into the classroom,” Hunter said.

The audits don’t look at student achievement or educational programs, Hunter said.

“There’s a limit in the scope of what we’re looking at,” she said.

The 38-page audit report, which is based on data from the 2006-07 school year, focuses on six categories: administration, student transportation, plant operations and maintenance, Proposition 301 monies, classroom dollars and English-language learner programs.

“I will say the district’s percentage of classroom dollars was higher than the state average,” Hunter said. “But we did find some areas to hopefully further increase that classroom dollar percentage.”

In its response to the report, the district agreed with all but one of the recommendations and outlined actions it has already taken to implement them.

Hunter said the Auditor General would make no official determination of how successful the district had been at addressing the recommendations until the first of at least four six-month follow-up reviews. The first follow-up is scheduled for June.

The only recommendation the district disagreed with concerned the reporting the $23,000 in revenue from beverage sales.

The Auditor General said the district had misclassified the revenue by reporting it as donations rather than accounting for it in the district’s auxiliary operating fund.

“This is important because, based on donor stipulations, districts may spend donations for purposes that they cannot use other district monies for,” the report said. “For example, at least $12,000 in donations was spent on food for board, administrative and staff meetings and on staff appreciation items. While these may be allowable uses of donations, the monies from the beverage sales could not be used for these purposes.”

In its response, the district argued that its agreement with the beverage vendor, Pepsi Bottling Group, stated commissions from beverage sales “would be considered a gift/donation to the school district that could be used for staff appreciation,” and that the food purchases were used during employee training to allow “work to continue through the lunch hour and eliminate the time employees were required to spend away from their normal duties.”

The Auditor General’s Office issued a comment to the district’s response maintaining its position that the funds were improperly reported.

“The bottom line is, the district disagrees,” Superintendent Gail Malay said Monday. “We will comply, we’re just in disagreement with their interpretation.”

The Auditor General compared LHUSD to other Arizona school districts of similar size, including Sierra Vista, Cave Creek, Flowing Wells, Nogales and Prescott. It found the district’s 2006-07 per-pupil administrative costs were slightly higher than the average and that per-rider student transportation costs were more than twice as high.

The district’s 2006-07 per-square-foot electricity costs were the highest among the group though its overall plant maintenance and operations costs were lower than the average. In it’s response, the district stated the implementation of a new energy management system reduced the district’s energy costs from $2.2 million in 2006-07 to $1.8 million in 2007-08.

The district also stated it had addressed or was in the process of addressing a variety of concerns ranging from the review of credit card receipts to how ELL costs are reported.

The complete audit report and the district’s response are posted on the Auditor General’s Web site at www.auditorgen.state.az.us.

You may contact the reporter at dparker@havasunews.com.