Arizona School Facilities Board Found Lacking

Arizona School Facilities Board History And Purpose

The Board was established in 1998 following an Arizona Supreme Court decision in a lawsuit that challenged the State’s school construction funding system. In May 2017, several school districts and other stakeholder groups filed another lawsuit alleging that the State’s system for funding public school facilities is unconstitutional. </p

The Board was established in 1998 by legislation known as the Students FIRST Act (Fair and Immediate Resources for Students Today). Students FIRST changed the way Arizona pays for the construction of and improvements to kindergarten through 12th grade (K-12) school facilities by establishing standards, also known as minimum school facility adequacy guidelines (minimum adequacy guidelines) for public school district (school district) facilities and providing state funding to ensure all school districts’ facilities comply with the minimum adequacy guidelines.

The Office of the Auditor General conducted a performance audit of the Arizona School Facilities Board (Board) and found serious issues with “the Board’s practices for assessing, awarding, and overseeing school district facility renovation.” The Auditor General found that inadequate “policies and procedures” have caused the Board’s liaisons to “inconsistently and inappropriately assess project eligibility.”

● Auditors reviewed a random sample of 30 of the 425 BRG Fund and all 7 EDC Fund projects the Board approved in fiscal year 2016 and found that all 37 projects lacked documentation demonstrating that these projects met statutory eligibility requirements.

● In November 2016, the Board approved a project award of more than $100,000 for a BRG Fund project to address a rodent infestation at a school. The school district that owned the school had closed the school beginning in the 2010-2011 school year and had leased some of the school buildings to another entity. However, the project summary board staff prepared did not indicate that the school or any of the school buildings had been closed since the 2010-2011 school year, nor did it include any other information demonstrating the school district’s current or planned future use of the school buildings.

● For a different project in fiscal year 2015, the Board determined that this same school did not meet the statutory criteria for BRG Fund projects because it was not being used for student capacity at the time. Instead, the Board approved this project as an EDC Fund project.

Board lacked documentation to support project eligibility determinations — Auditors reviewed a random sample of 30 of the 425 BRG Fund and all 7 EDC Fund projects the Board approved in fiscal year 2016 and found that all 37 projects lacked documentation demonstrating that these projects met statutory eligibility requirements. For example, the 30 BRG Fund projects reviewed did not have documentation demonstrating that the problem the proposed project was intended to address had caused the building or facility to fall below the minimum adequacy guidelines and that school districts had conducted preventative maintenance on the school facility. Similarly, the 7 EDC Fund projects did not include documentation demonstrating that the project met statutory eligibility criteria. Without adequate documentation, the Board cannot ensure that the projects it approved met eligibility requirements.

Lack of clearly defined eligibility criteria has led to inconsistent board decisions — Statutory criteria specify that a BRG Fund project must be for a building owned by a school district that is required to meet the minimum adequacy standards for student capacity. However, both statute and board policy do not specify whether a building must be currently in use as classroom space or whether the Board should consider a school district’s current and planned future use of a building to determine BRG Fund eligibility. This has led to the Board inconsistently applying this criteria.

Specifically, in November 2016, the Board approved a project award of more than $100,000 for a BRG Fund project to address a rodent infestation at a school. The school district that owned the school had closed the school beginning in the 2010-2011 school year and had leased some of the school buildings to another entity. However, the project summary board staff prepared did not indicate that the school or any of the school buildings had been closed since the 2010-2011 school year, nor did it include any other information demonstrating the school district’s current or planned future use of the school buildings. Conversely, for a different project in fiscal year 2015, the Board determined that this same school did not meet the statutory criteria for BRG Fund projects because it was not being used for student capacity at the time. Instead, the Board approved this project as an EDC Fund project.

Inadequate policies and procedures have led to inappropriate and inconsistent project eligibility assessment practices — We found that without policies and procedures, the Board’s liaisons have inconsistently and inappropriately assessed project eligibility. For example, the liaisons have not always provided documented project eligibility information to the Board, applied inappropriate project cost criteria in some cases, and inconsistently assessed preventative maintenance requirements. Further, liaisons inappropriately asked school districts to withdraw projects prior to board review. However, the Board’s statutes and policies do not authorize them to do so.

Arizona School Facilities Board Executive Director Paul Bakalis accepted recommendations by the Auditor General’s Office.

Arizona School Facilities Board

Sean McCarthy, Chairman

Sean McCarthy, Senior Research Analyst for the Arizona Tax Research Association (ATRA), is a 2007 graduate of the United States Air Force Academy, where he earned a Bachelor of Science in Political Science and a minor in Spanish.

Vern Crow, Vice-Chairman

Vern Crow is the founding principal of Dominion Environmental.

Edward E. Boot, Board Member

Since November 2012, Ed Boot has been the Capital Manager with the Governor’s Office of Strategic Planning and Budgeting, responsible for reviewing, analyzing, and making recommendations on all facilities capital requests from the agencies within the State’s three Major Building Systems: the Department of Administration, Department of Transportation, and the State Universities.

Bryan E. Peltzer, Board Member

Bryan Peltzer is the Senior Project Engineer and part-owner of Peterson Geotechnical Group in Chandler, Arizona.

Thomas D. Rushin, Board Member

Thomas D. Rushin is an Arizona native with 44 years of experience in the field of education. He has been a teacher, coach, principal, associate superintendent and retired in 2008 as Superintendent of Yuma Elementary School District in Yuma, Arizona.

Traci L. Sawyer-Sinkbeil, Board Member

Traci Sawyer-Sinkbeil, a former Air Force brat, has lived in Arizona for thirty-five years and is proud to be a product of Mesa Public Schools as a Westwood Warrior. She is active in the community, having served on the Dysart Strategic Planning Committee and the Employee Benefits Trust prior to her election to the Dysart Governing Board.

Ward Simpson, Board Member

Ward Simpson has managed the efforts of construction, architectural, engineering and management consulting firms for more than 39 years.

Dr. Jeffrey J. Smith, Board Member

Dr. Jeff Smith has led a distinguished career in education as a teacher, principal and district office administrator for 30 years. He is currently Superintendent of the Balsz School District in Phoenix, Arizona.

Sandy Williams, Board Member

Sandy Williams, a current 6th Grade Teacher in the Paradise Valley Unified School District, has been teaching for twenty-eight years in Arizona.

Ashley Berg, Advisory Non-Voting Board Member

Ashley Berg, Director of Policy Development and Government Relations for the Arizona Department of Education, currently advises the Superintendent of Public Instruction on policy issues and liaises with both state and federal elected officials.

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