CHICAGO — The Grandview School District in Missouri misused some proceeds raised from $22 million worth of borrowing in recent years and needs to improve its handling of bond financed projects and methods for issuing bonds, a recent Missouri state audit found.
The district has tapped the federal Qualified Zone Academy bond program for some of its borrowing, but it failed to meet to some program requirements, according to Auditor Thomas Schweich's report, published in August.
The district used some QZAB bond proceeds for projects not permitted under either state or QZAB specific restrictions. State law limits the use of bond proceeds by a school district to purchasing land for a school site, erecting or furnishing a school or library, building additions or repairs to existing buildings, and purchasing school buses or other transportation equipment. The district spent $117,000 of bond proceeds on various band and athletic uniforms.
The district also did not have measures in place to ensure it received contributions committed by a private business partner - Bank Midwest — between 2008 and 2013. The bank was supposed to make contributions valued at $57,000 annually in connection with three bond issues under the federal programs under which it received tax credits.
The district used a negotiated transaction and the same firm as both financial advisor and underwriter for all of its bond issuances which could result in a conflict of interest to the district's detriment, the report said.
The district did not prepare and make available to the public specific plans and budgets to document how bond issuance proceeds would be used, and it was unable to provide budgeted and actual amounts spent for the proceeds from a 2012 bond issue.
The district's bank account did not balance with its general ledger fund for fiscal years 2011 through 2013, and there is an unidentifiable difference of approximately $35,000 in the general ledger as of July 2013, according to the audit.