A statewide grand jury on public corruption said the "squandering of hundreds of millions of taxpayer dollars for a mediocre product" saddled the Broward County School District with debt while leaving some areas of the county with overcrowded schools and others with vacancies.

Though the grand jury made no indictments, its scathing 51-page overview of the nation's sixth-largest school district cited "gross mismanagement" and "ineptitude of many individuals," none of whom were named.

"We cannot imagine any level of incompetence that would explain what we have seen," the panel said in the beginning of its report, which Florida Attorney General Pam Bondy distributed statewide Monday.

The report concluded that there was "a deliberate, conscious effort by senior officials at the district in collusion with or at the direction of certain board members" to avoid filing a timely updated school plant survey with the state "for the express purpose of continuing … an out-of-control and badly mismanaged construction program."

This effort was "driven mostly out of a desire to benefit contractors and the political fortunes of board members," the report said. "The result of this effort is an abundance of empty classrooms, mostly in the east, $2 billion in debt, and critically overcrowded schools in the western part of the county."

The report criticized how the school board selected members of its finance team to sell debt.

"Of all the bad decisions the board has made, the worst may be to personally insert themselves in the decisions to select contractors and vendors," it said. "Board members do this through their appearance on several committees, specifically the Financial Advisory Committee, which selects banks and other financial institutions that manage the district's money, including investments and the issuance of construction bonds."

Broward school superintendent James Notter said the grand jury report would be taken "seriously" and reviewed expeditiously. He also said the district has already initiated reforms such as restructuring selection committees for better transparency, attending ethics workshops, creating a comprehensive ethics policy and strengthening reporting requirements for lobbyists.

A 2002 report on the district by a local grand jury cited some of the same problems.

The district sold $125 million of tax anticipation notes on Oct. 5 to pay operating expenses. The notes were sold with a one-year maturity and an interest rate of 1%.

In November, the school board approved the issuance of $280 million of Series 2010B certificates of participation. Though the COPs have not been sold, they were rated A-plus with a stable outlook by Fitch Ratings, Aa3 with a negative outlook by Moody's Investors Service, and A with a stable outlook by Standard & Poor's.

The Standard & Poor's rating represented a rating downgrade from A-plus. The agency said Broward County's decreasing assessed property values have "impaired the district's ability to generate sufficient revenues" from its capital outlay local-option millage rate for COP payments.

The district has historically used the capital outlay millage for debt service, but other sources of revenue can be used for repayment if necessary.

Moody's said it put a negative outlook on the district because of "significant use" of the capital outlay millage to repay COPs and its "very narrow financial position, which has left it vulnerable to expected revenue losses in fiscal 2012."

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