A change is in order

School board vs. advisors on spending loopholes

By Karen Gray
  • Friday, March 27, 2009

When taxpayer money is being spent, is it really too much to ask that an independent oversight mechanism be established? If you listen in on recent meetings of the Clark County School District Bond Oversight Committee (BOC), you might think so.

The committee is, according to the school district, an independent body appointed by CCSD trustees. Some committee members are residents of the different trustees' districts. Others are appointed because of their areas of expertise: architecture/engineering, financial management, land development, public works administration, labor, construction law and construction. One represents the CCSD superintendent's office.

According to district bylaws and its website, "the committee provides financial, bond, and investment oversight of the district's capital improvement program to ensure accountability to the public."

But just what does that entail? At recent BOC meetings, that's been the hot-topic discussion.

Committee members believe that their obligation to provide financial oversight and ensure accountability to the public encompasses review of change-order expenditures.

However, Carolyn Edwards, a trustee and the board's liaison, disagrees. She says the BOC's role, according to bylaws, is to "evaluate procedures and make recommendations regarding the change order process."

That, according to Edwards, means that actually reviewing change orders is not within the purview of the BOC — or even the board of trustees, for that matter.

During last week's ad hoc committee discussion, Edwards told committee members that it emphatically was not the BOC's role to review change orders. She said the committee should simply review the district's change-order process, identify what about it makes them uncomfortable and then simply inform the board.

The committee's pointed response was that it already has seen the process, found it inadequate and believed that the BOC itself was a logical group to review the change orders.

Concerned that no one outside CCSD staff is looking at change orders, the bond oversight committee stood firm. Committee member Frank Hawkins expressed his conviction that the money belongs to taxpayers and someone with public accountability needs to be monitoring the spending. And if the elected board members don't want to do it, then the BOC or a third-party consultant hired through the committee should do it.

For some time now, members of the public have risen at school board meetings and called for more transparency regarding bond expenditures. Citizens and contractors alike have raised questions regarding the validity, necessity and scope of certain change orders. At the bond oversight committee, those concerns have not fallen on deaf ears.

Committee members have persistently pursued answers to the hard questions, and they continue to seek accountability from school district staff. However, the BOC's desires to establish safeguards and accountability for public money in the CCSD are facing a stalemate. The committee can only act within the parameters laid out by the board of trustees. And, if the trustees don't agree that the BOC should oversee the change orders, then the BOC won't be overseeing the change orders.

Currently, under the district's procedures, it is employees from the facilities division alone who review and process the change orders, which are legally binding contracts changing (usually expanding) work to be done and the remuneration the contractor is to receive. The trustees have authorized the district's associate superintendent for facilities to approve all change orders for projects. Only when change orders cumulatively exceed 103 percent of the original contract amount must the board of trustees ratify future change orders.

Those change orders then come before the board as consent items on board agendas. However, at no time does the board actually get into the details and review a change-order invoice or its supporting documents. Indeed, during last week's BOC discussion, Edwards explained that the board depends upon the district's change-order process and district staff to review the change orders. She said that under the board's governance model, it is not the role of the trustees to review change orders.

It is that very lack of accountability, candidly expressed by Edwards, which the professionals on the bond oversight committee want to rectify. The change-order review process they advocate would make sure that the public purse is protected.

"We have time to take a look in the rear-view mirror ... and change the bad things," says Hawkins.

The CCSD board of trustees should close the change-order loophole. They should opt for transparency and accountability, and recognize their responsibility to the taxpaying public.

Karen Gray is an education researcher at the Nevada Policy Research Institute.

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