The Maricopa County Board of Supervisors has uncovered financial mismanagement at the Accommodation School District that required the Board to approve millions in taxpayer money to ensure people and creditors get paid.
The Accommodation District is solely under the management oversight of the elected Maricopa County School Superintendent Steve Watson.
Neither Watson, nor any member of his staff, appeared at the Board of Supervisor’s meeting to take responsibility or explain his actions.
By law, Watson alone may choose to operate an accommodation school district and serve as its single-member governing Board. State statute does not require the Board of Supervisors to fund an accommodation school district.
While the District’s budget for fiscal year 2022 appears to be balanced on paper, it includes revenues of approximately $2 million for which the District had no source. Despite insufficient resources, the District continued to spend throughout the year, including spending against a line of credit for which they did not have collateral. Today, the Board of Supervisors approved up to $2.05 million to repay this line of credit, which expires on June 30th.
Unfortunately, the overspending in the Accommodation District is not the only financial issue the Board has uncovered related to the County School Superintendent. State and county audits to date have found:
- In multiple instances, CSS deposited revenues into special revenue funds but recorded related expenses out of the general and other funds. This violates the “matching principle” required by County policy and Generally Accepted Accounting Principles (GAAP).
- For at least six years, and in multiple instances, the CSS budget was not executed as presented to the Board.
- CSS did not have documentation for how almost $1.7 million in federal grant money was spent and may be required to repay this amount to the federal government.
The state Auditor General will present her findings about CSS finances to the Board of Supervisors in a public presentation next month.
June 30, 2022 Board of Supervisors Agenda
Superintendent of Schools
2. BUDGET ADJUSTMENT FOR MARICOPA COUNTY ACCOMMODATION SCHOOL
1. Approve a fund transfer in an amount not to exceed $2,048,020 from the General Fund (100) to the Schools Transportation Fund (780).
2. Pursuant to A.R.S. § 42‐17106(B), approve the following transfers of revenue and expenditure authority in FY 2022:
a. Decrease the Non Departmental (D470) General Fund (100) Operating (OPER) Contingency (4711) in the lines “Schools – Accommodation School Subsidy Contingency” for an amount not to exceed $2,048,020
b. Increase Non Departmental (D470) General Fund (100) Operating (OPER) Other Programs (4712) in a new line, “Schools Accommodation Schools Subsidy Transfer”, in an amount not-to-exceed $2,048,020
c. Increase the County School Superintendent (D370) Schools Transportation Fund (780) Operating (OPER) revenue and expenditure appropriation by an amount not-to-exceed $2,048,020
d. Adjust the Eliminations (D980) Eliminations Fund (900) revenue and expenditure appropriations by an amount not-to-exceed -$2,048,020.
Approval of this action will have a net zero impact on the overall County budget and does not alter the budget constraining expenditures of local revenues duly adopted by the Board pursuant to A.R.S 42‐17105.
This adjustment is necessary to provide the funding for the Maricopa County Accommodation School pursuant to 15-1001.A.5, “For necessary expenses for the establishment and conduct of accommodation schools pursuant to section 15-308.”
3.BUDGET ADJUSTMENT FOR COUNTY SCHOOL SUPERINTENDENT COMMUNICATION FUND
Pursuant to A.R.S. 42-17106(B), approve the following FY 2022 Budget Adjustments:
1. Increase the revenue and expenditure authority in the County School Superintendent (D370) School Superintendent’s Communications Fund (782) Operating (OPER) in the amount of $419,330.
2. Decrease the revenue and expenditure authority in Non Departmental (D470) Non Departmental Grants Fund (249) Operating (OPER) in the amount of $419,330.
Approval of this action will have a net zero impact on the overall County budget and does not alter the budget constraining expenditures of local revenues duly adopted by the Board pursuant to A.R.S 42‐17105. (C-37-22-027-X-00)
While the Office of the School Superintendent operates independently as a separate elected office, it is funded through the county budget approved by the Board of Supervisors.