School District official blasts proposed legislative audit

Wednesday, Sept. 11, 2002 | 9:35 a.m.

CARSON CITY -- A potential audit of the Clark County School District would look into such areas as the solvency of the health insurance plan for teachers, the maintenance at the district's 245 schools and if the district is managing its money effectively.

Legislative auditors released a preliminary survey Tuesday of what should be examined in a full-scale audit of the Clark and Washoe school districts.

The Clark County School District had a $1.1 billion budget in 2001 with 90 percent going to salaries and benefits. It spent $5,145 per student.

The 2001 Legislature ordered its audit staff to consider an examination to find potential cost savings and ways to increase efficiency.

Walt Rulffes, deputy superintendent and chief financial officer of the School District, told the Legislative Audit Committee in a letter that many of these areas have already been audited.

"It would not be prudent use of public funds to incur additional costs for such duplicate audits," he said.

Assemblyman Joe Dini, D-Yerington, said the report substantiates the fact that the district can't keep up with the area's growth. He said the report "highlights a lot of things we know" including the need for more money in the public schools.

One area the auditors suggested be studied is whether the health plans provide adequate benefits at a reasonable cost to employees and taxpayers. The insurance plan for teachers is administered by a union health trust.

"District officials are concerned that the trust may be operating with a deficit of $5 million," the auditors said.

School District officials said they have no authority under state law to require the union trust to disclose its financial position.

Recently the trust disclosed some information in an attempt to get extra money from the Legislature to shore up the system. That data showed expenditures in 2001 exceeded revenues by about $10 million, the auditors said.

Several years ago the trust had $20 million in reserves. However, during the last fiscal year, teachers had a choice to pay a $25 per month premium -- more if dependents are included in the plan -- to maintain the level of benefits once enjoyed.

Rulffes said the district would support an examination that would lead to the district having authority over management of the funds for the employee health services.

The auditors also suggested an examination of the district's ability to adequately manage its money to ensure it is being used "effectively and efficiently."

Rulffes said a $75,000 audit is conducted annually by Kafoury, Armstrong & Co. that looks at the financial management of the district. He said it would be a redundant expenditure of public funds to have another audit.

The tone of Rulffes' letters ruffled some legislators. In talking about the recruitment of teachers, Rulffes said the district has an extensive recruiting system to attract teachers.

"If a legislative audit will result in an increased number of applicants and or retention of existing staff, we encourage an audit to take place as soon as possible," a sarcastic Rulffes said.

State Sen. Mark Amodei, R-Carson City, said the tone of Rulffes' letter bothered him.

Sen. Joe Neal, D-Las Vegas, said the Legislature had the right to audit the district. He suggested future letters to the audit committee come from Superintendent Carlos Garcia or School Board President Sheila Moulton and not Rulffes.