The Public Education Department’s decision to take over the Española School District’s finances could mean some contractors won’t get the work they were promised.
District officials, in accordance with the financial take over, must submit all contracts of $1,000 or more to the Department for review and approval.
Department spokesman Robert McEntyre said during the review process, the Department’s Budget and Finance Analysis Bureau officials will have to determine if all future contracts represent a practical use of taxpayer money.
“Right now, the District will bring to the Department, certain financial actions for approval,” he said. “In a normally-functioning school district, the (school) Board is the Board of Finance but we are executing financial authority.”
Take over may spell trouble for area business
The financial authority McEntyre is referring to gives the Department the power to refuse to fund any pending or proposed project that isn’t under contract.
For example, McEntyre said if the District had submitted, for approval a $1.8 million football field contract, Department officials would have had to examine the plan and determine if the project was in the District’s best interest.
“The District has not been following its budget,” he said. “They have been under-spending and over-spending their budget. So the District can’t get a credit card to do whatever they want, PED has to approve those Board expenditures.”
Although McEntyre used the football field project as an example, it must be noted, the District already awarded that contract to Bosque Farm’s Lone Mountain Contracting, so it would be difficult to stop that project from moving forward.
But that isn’t the case with the proposed District administration and transportation building on which District officials planned to start construction, some time in late February or early March.
According to District Business Manager Myrna Garcia, Alcalde’s R&M Construction, LLC, and the District never officially signed a contract for the construction portion of proposed administration building project.
Without a legally-binding agreement, the takeover could translate to R&M officials losing the approximately $2 million no-bid contract the Board promised them for the project.
McEntyre said the Department’s Budget and Finance Analysis Bureau officials haven’t determined if the bookkeeping issues, which facilitated the take over, were the result of foul play or sloppy accounting, but the bottom line is the District hasn’t adequately tracked its spending.
“They can’t necessarily track all the money they spent,” he said. “The amount of money they have in the bank and in the ledger doesn’t match, and that should be concerning for a public body. For every dollar going in and out, there should be a record and those records should add up at the end of the day.”
McEntyre said his Department’s take over of the District’s finances is somewhat different from the complete take over of the Questa School Board in the fall of 2012.
“All of these issues are unique and specific to the Española School District,” he said. “We took the action we felt was more appropriate to the law. We had better support within the law to give them notice, instead of doing a blanket take over, based on some allegations.”
New process to
correct old issues
Public Education Department Secretary Hanna Skandera cited several instances of the District circumventing the state’s Procurement Code by issuing $4,999 contracts to area vendors as one of the reasons the take over was an appropriate measure.
Additionally, the Nov. 17 letter Skandera sent notifying the Española Board of Education of her Department’s decision, cites the District’s failure to reconcile or verify the audited fund balances with the general ledger.
Failure to verify fund balances were correct, led to the wrong information being submitted to the Department’s analyst for multiple years, going back possibly as far as 2010.
Board President Pablo Lujan criticized the Department’s take over as an attempt to interfere with next month’s School Board Election.
Shortly after the take over, Lujan’s two closest Board allies, Vice President Lucas Fresquez and Secretary Annabelle Almager, decided not to seek re-election.
However, District officials will still be responsible for obtaining the goods and services needed to run the District.
This means they will still be responsible for issuing Requests for Proposals and Invitations to Bid, as needed. The only difference is, the state will oversee the process.
Maria Fidalgo, the level-two business manager the District hired, per Department instruction, explained in a Dec. 22 email to the District’s Business Manager Myrna Garcia, that the process for procuring goods, services and personnel would pretty much stay the same.
“The internal signatures are still the same, nothing has changed,” Fidalgo wrote in the email. “The only change is that a step has been added where PED would be the last signature for the contracts to be valid/executed. The superintendent has to review, approve and sign the recommendation for hiring before the contract goes to PED.”
Since the Department assumed responsibility for the District’s finances, the Board has sent about 16 transactions for state approval, which include several budget adjustment requests and contracts and accounts payable.
State officials will have to decide if the District can enter into an $8,500 annual advertising contract with KDCE, a $8,780 contract for a subscription to Mind Play Virtual Reading Coach and a $6,756 contract for four school bus security cameras.
Garcia said, so far, the state has approved every contract the District sent its way. However, the public would never know those contracts were approved by state regulators because the District hasn’t publicly shared a report, or explained, in either of the multiple regular and special Board meetings, how many of the nearly 16 contracts and transactions they sent the Department have been authorized.
To regain its financial autonomy, the District will have to rely on Fidalgo to provide Department officials with a list of corrective actions; present the District financial reports to state regulators in a timely manner for six consecutive months; help correct past audits and ensure the District keeps better track of its cash disbursements.