DALLAS - A state-appointed conservator plans to meet with Lancaster Independent School District officials this week to try and rebuild the finances and hopefully enhance the public perception of the beleaguered district 20 miles south of downtown Dallas.

Following a nine-month audit that found numerous financial-management deficiencies, the Texas Education Agencylast week appointed James Damm conservator to oversee the district's finances.

Damm, former chief financial officer for several other Texas school systems, will have final say over nearly all functions of the suburban district. Damm said he and Ron Rowell, senior director of governance and general inquiries at the TEA, expect to meet with trustees Wednesday.

"We anticipate starting [this] week by introducing ourselves to the board at a called meeting Wednesday," Damm said. "At that point, we'll establish what issues we plan to address and lay out for the board exactly how we're going to do business to meet the financial needs of the school district."

In a letter to the board and superintendent Larry Lewis, Texas Commissioner of Education Robert Scottsaid Lancaster ISD "has been experiencing financial management problems for the past several years."

Last month, school board president Carolyn Morrissaid increased oversight can only benefit the district.

"What's really going to help this district is a strengthening of the communications between the board president and the superintendent," Morris said. "We need to focus on the growth our district is experiencing and build bridges with the community so our district has a future. We need to do the right thing and be responsive to the community so we can strengthen our district."

Morris has clashed with superintendent Lewisduring the past few years over financial reporting and transparency. Lancaster was late with its fiscal 2006 audit and has watched its last three bond elections fail amid claims from area residents about misuse of funds.

Lewis adamantly denies any wrongdoing and places blame for the audit delays on computer problems and bookkeeping issues. He said "racial stereotyping" is undermining the district, which has a student population that is primarily African-American.

Among other findings, the TEA audit showed "the district's current accounting software either does not have the capability or the accounting personnel are not knowledgeable of the software's capabilities to produce sequential check numbering," which led to duplicate checks, payments from incorrect bank accounts, checks out of order, and missing check numbers.

In May 2007, district voters rejected a $142 million bond package. A $215 million measure failed in November 2006 and a $93.6 million debt request was rebuffed the previous May.

The needs of the district will only increase as enrollment growth and aging facilities remain in need of repair. Officials want to upgrade existing facilities and build new schools to keep pace with an enrollment that they say is adding about 450 to 500 students a year.

Officials peg the current enrollment at about 6,200 and expect that figure to rise by about 1,900 to more than 8,000 students by 2012.

Scott wrote in his letter to the district that one area of concern has been reporting of student attendance.

Damm and the communities southeast of Dallas have been through this before.

In 2004, the TEA named Damm interim superintendent of the Wilmer-Hutchins Independent School Districtafter a former superintendent was indicted on felony charges of evidence tampering. A year later, the state annexed Wilmer-Hutchins to the Dallas Independent School District, following years of the financial problems and it being rated "academically unacceptable" under state guidelines.

Lancaster superintendent Lewis has said that he "wished Wilmer-Hutchins never happened," as the community seems all too eager to lump his administration in with what happened to the neighboring school district.

Moody's Investors Service rates Lancaster ISD Baa3, while Standard & Poor's rates the credit BBB.

Credit strengths include inclusion in the Dallas metropolitan economy, taxing flexibility, and property tax base growth, according to Standard & Poor's.

Analysts said the district's assessed valuation rose to $1.3 billion for fiscal 2006 from $752 million in 1999, and continued growth is expected.

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