er
JULY 31, 2024
Make the mark.
DEKALB COUNTY SCHOOL DISTRICT
Comprehensive Financial Audit of E-SPLOST IV and
E-SPLOST V
July 31, 2024
Dr. Devon Horton
Superintendent
DeKalb County School District
1701 Mountain Industrial Blvd
Stone Mountain, Georgia 30083
Dear Dr. Horton,
Plante Moran has performed the procedures identified within the report below in accordance with
RFP 23-543 – E-SPLOST Comprehensive Audit for DeKalb County School District (the “District”).
The purpose of this audit was to assess the District’s management and oversight of funds received
via the E-SPLOST IV and E-SPLOST V referendums.
We were not engaged to and did not perform a financial statement audit, the objective of which
would be the expression of an opinion on the District’s financial statements. Accordingly, we do
not express such an opinion. Had we performed additional procedures, other matters might have
come to our attention that would have been reported to you.
Enclosed within this report is a summary of our findings, along with recommendations for the
District to improve its controls, policies, procedures, and oversight in an effort to enhance
governance of future E-SPLOST programs. Our team noted four areas of failure by the District to
effectively govern the management of taxpayer funds, and we have aligned our recommendations
to provide the District with an opportunity to enhance procedures and management oversight to
reinforce the public’s trust in the District’s management of taxpayer funds.
While we noted the issues enclosed within, we are encouraged by the District's commitment to
remediation through the Miracles program. We trust the District in their remediation efforts,
however, these actions should be validated and regularly monitored through routine internal
audits.
We would like to thank District staff members for their support in providing documentation and
clarification throughout this audit.
Sincerely,
Plante and Moran, PLLC
Results at a glance
$999M 15,000 12,000
Documents lost /
4
Dollars evaluated Transactions evaluated destroyed / unavailable Categorical failures of
for audit key controls
Lack of policy, controls, and procedures
Management oversight not present
Training for key staff not in existence
Inaccuracies in recording, tracking, and accounting for large expenses
Table of Contents
I. Executive Summary ....................................................................................................................1
II. Accounting and Project Management Findings and Recommendations ....................... 6
III. Appendix ................................................................................................................................... 35
I. Executive Summary
1
Background
The DeKalb County School District (the “District”) utilizes the “Education – Special Purpose Local Option
Sales Tax (“E-SPLOST”)” as a source of funds for District improvements. Use of this funding includes
capital projects including but not limited to new school construction, existing school renovations,
upgrades to school technology, procurement of musical instruments, and others as directed by the
DeKalb County School Board and its Superintendent. The funding for E-SPLOST projects comes via a
one-penny consumption tax funded by all purchases within DeKalb County, GA. On November 8, 2011,
residents of DeKalb County voted in favor of approving the referendum related to E-SPLOST IV for a
term of 60 months. On May 24, 2016, the residents of DeKalb County voted to further extend the E-
SPLOST program via E-SPLOST V for an additional term of 60 months. For purposes of E-SPLOST capital
project management, a joint effort of District management and a third-party project management team
contracted by the District are responsible for overseeing the selection of vendors, execution of the
contracted services, and quality of the construction.
During E-SPLOST IV and E-SPLOST V, the District underwent a major technology upgrade, replacing the
legacy ERP system, CrossPointe, with a cloud-based system, Munis. This upgrade resulted in a change in
procedures and documentation, which impacted the processes for procuring goods, recording E-SPLOST
ledger expenses, and disbursing E-SPLOST-related funds.
Through our review, we identified 4 key themes that summarize our detailed findings:
1. There was a lack of policies, procedures, and controls governing the E-SPLOST program
2. A lack of management oversight and approval over the E-SPLOST program
3. District staff did not have the proper training to effectively execute a controlled E-SPLOST
program
4. Multiple errors were noted in the recording, tracking, and accounting for large expenses
Audit Scope
Plante Moran was engaged to conduct a comprehensive audit of the expenditures related to E-SPLOST-IV
and E-SPLOST V. The period of our audit included:
• E-SPLOST IV: July 1, 2012 – April 25, 2023
• E-SPLOST V: July 1, 2017 – August 15, 2023
During this period, 15,600 transactions totaling $999M were expended on E-SPLOST-related projects:
E-SPLOST Program Count of Transactions Total Expenses ($)
E-SPLOST IV 8,800 $605M
E-SPLOST V 6,800 $393M
Total 15,600 $999M
2
Summary Engagement Timeline
• Engagement kick off and request for expense ledger and E-SPLOST IV and E-SPLOST V documentation sent to District
• Intial expense ledger with $200M variance provided
• E-SPLOST V testing begins for transactions recorded in Munis to analyze what the District purchased, whether it was
Q2 2023 received, and the authorization behind it
• Control walkthroughs are executed. Testing of E-SPLOST V continues. Support for transactions recorded in CrossPointe
not provided by District
• Reconciliation of $200M variance completed by PM, resulting in a completed expense ledger
Q3 2023 • Review of vendor selection scorecards, change orders, and final inspection documents is executed
• Forensic analysis begins with completed ledger and "risky" vendors identified
• Support for transactions recorded in CrossPointe not provided
Q4 2023
• District requests PM assistance in locating support for transactions recorded in CrossPointe. PM sends team to District
facilities to retrieve documentation
Q1 2024 • Identification of "risky" vendors completed.
• PM completes retrieval of available documentation for entries recorded in CrossPointe. Testing of E-SPLOST V
continues and testing of E-SPLOST IV begins to analyze what the District purchased, whether it was received,
compliance with policy, and the authorization behind it.
• Request for extraction of all emails for employees potentially invovled in use of "risky" vendors sent to District. After 4
Q2 2024 week delay, emails are sent to PM
• PM executes review of 5M emails for indication of potential fraud
• PM delivers draft executive summary of findings and recomendations
• Forensic analysis completed
• Project accounting and management analysis completed
Q3 2024 • Final report delivery
3
Procedures
Our team utilized multiple methods of review to analyze the E-SPLOST IV and E-SPLOST V processes:
Inquiry: We interviewed key process owners from the District as well as major vendors to understand
their roles, responsibilities, and procedures related to E-SPLOST IV and E-SPLOST V.
Inspection: Our team inspected the documentation furnished by the district supporting transactions in
which E-SPLOST IV or E-SPLOST V funds were utilized to determine the legitimacy, business purpose,
accuracy, and approval process for the transaction. We also inspected documentation related to change
orders, vendor selection, project tracking, and close-out.
Reperformance/Recalculation: For instances where payment of a service was determined based upon
the percentage of completion, our team reperformed the calculation utilized to ensure its accuracy.
Analytics: After identifying the vendors paid with E-SPLOST IV and E-SPLOST V funds (explained
further in Section III – Forensic Analysis), we performed data analytical tests on disbursements to those
vendors.
Background Research: We identified employees at the District, as well as AECOM contractors, deemed
“key” to the E-SPLOST IV and E-SPLOST V programs. Key employees were defined as:
• Individuals involved in vendor selection, contract negotiation, and/or other procurement and
approval tasks, as identified through review of supporting documentation and organizational
charts; or
• Employees with E-SPLOST-related wages over $100,000 during the scope period
We conducted background research on these individuals using a variety of tools, including Thomson
Reuters CLEAR software 1, the Secretary of State Business Entity Search tools across multiple states, and
internet research. When an individual appeared to own a business, we also researched that business. We
compiled information regarding addresses associated with the key employees (and their businesses, if
applicable).
Email Review: Leveraging information learned from our analytics, interviews, background research, and
document inspection, we determined our scope for reviewing emails to include the activity of
approximately 40 individuals. We extracted over 5M emails and attachments from the District’s server in
relation to these ~40 individuals.
Summary of Findings
Throughout the audit process, our team noted significant findings that either deviate from the stated
policy or are based upon our professional judgment and indicate a lack of control over E-SPLOST IV and
E-SPLOST V funds.
Finding Category Finding Detail
1. Policies Lack of enforceable policy to govern District processes
1 https://legal.thomsonreuters.com/en/products/clearF
4
2. Project Spend Tracking Incomplete and inaccurate ledger of E-SPLOST transactions
Contracts were written in a manner that was not favorable to the
3. Contract procurement,
District and resulted in the overpayment of additional soft costs and
execution, and monitoring
a lack of spending oversight
Documents to support the audit were not retained in accordance with
4. Records Retention
District policy
Vendor selection teams were not appropriately split between AECOM
5. Vendor Selection
and District personnel
6. Purchase approval Purchases were initiated prior to approval of the purchase order
For expense items where documentation was available, significant
7. Expense Review exceptions were noted related to adherence to governing policies,
rules, and regulations.
A suite of preventive and detective controls was not in place for the
8. Internal Control
governance of E-SPLOST IV and E-SPLOST V funds
Original contracts of low value followed by significant change orders
9. Change Orders
provide opportunity for procurement exploitation
Documentation to support a budget to actual analysis, and changes to
10. Project Spending
budget was not retained
11. Final Inspection Final inspection documentation was not retained to evidence the
Documentation District reviewed the final condition and quality of work performed
5
II. Accounting and Project Management
Findings and Recommendations
6
Finding #1 - Policies
Observation: The Policy and Procedures Manuals (“PPM”) were not developed to align with District
processes and were not communicated to District personnel. As a result, District personnel were
unfamiliar with the PPM, and there was no policy being adhered to throughout the E-SPLOST IV and E-
SPLOST V programs.
Background/Details: The District engaged URS Corporation (E-SPLOST IV) and AECOM Technical
Services, Inc. (E-SPLOST V) to prepare a policy manual for each E-SPLOST program. These policies,
referred to as the Program Procedures Manual (“PPM”), were intended to govern E-SPLOST spending and
detail the policies and procedures to ensure the E-SPLOST program adheres to legal and regulatory
requirements, as well as best practice processes.
Recommendation #1
Industry best practice is that District administration maintains a version-controlled policy to govern all
E-SPLOST program spend.
The District should engage a third party to develop a policy and tracking mechanism for future E-
SPLOST programs that considers input from District personnel while taking into account any legal or
regulatory requirements. The policy should include the following attributes:
1. Responsibilities for job roles involved in E-SPLOST programs
2. Timelines for process completion
3. Decision-making authority limits
4. Process for communication of policy requirements to District personnel
5. Monitoring procedures to ensure compliance
6. Procedures for accurate document retention
7. Oversight procedures in establishing the budget, scope, and schedule to ensure quality,
timeliness, and strong economics in project management (see Recommendation #3 for further
details)
Suggested timeframe for implementation: Q1 FY 2025
DCSD Response: Management agrees with the Auditor’s recommendation.
DCSD’s plan is to take advantage of existing opportunities to leverage the current documentation
available (i.e., the ACERM PPM, Kahua Workflows) to fast-track the development of comprehensive and
integrated Standard Operating Procedures (SOPs). District personnel intimately involved in the E-
SPLOST CIP have the accumulated knowledge to compile new SOPs and will employ additional review and
input from a qualified third-party qualified consultant. Further, the District intends to implement
consistent, periodic review and updating of the SOPs and continual communication of and training on
the SOPs as well.
Expected Implementation Completion: Q3 FY2025
Finding #2– Project Spend Tracking
Observation: The District did not maintain a complete and accurate ledger of E-SPLOST-related
transactions consisting of project, expense details, vendor, date, and amount. This issue appears to have
occurred because of the conversion to Munis in 2018, as well as a lack of appropriate supporting
documentation for journal entries.
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Background/Details: The District provided “Spend and Budget Reports” for E-SPLOST IV and E-SPLOST
V separately. These reports summarize the total spent by phase (pre-construction, admin, architect, etc.)
through May 8, 2023, totaling $998M. However, the reports do not show the transaction details
comprising these amounts.
When we requested the transaction details, we were provided various reports from CrossPointe and
Munis, which totaled $1.233B, a variance of over $200M. Much of this variance was due to transactional
data originally recorded in the legacy CrossPointe system being duplicated in Munis and/or imported
into Munis without vendor details. These duplicates and lack of vendor detail were not easily identifiable
for the purpose of tracking E-SPLOST project spend.
Additionally, during the implementation of Munis, some transactions were not coded to the appropriate
GL account with a project string, which is the segment of a GL account number that connects the
transaction to a specific project. The missing information caused Munis to inaccurately
display/categorize certain expenditures in comparison to the Spend and Budget Reports. As a result, only
171 of the 261 projects listed on the initial transaction details provided to us reconciled to the Spend and
Budget Reports, with a nearly $240M unreconciled variance remaining.
Through extensive research into both CrossPointe and Munis systems’ transactional details, Munis
Project Detail History reports, Munis Project Journal Inquiry reports, and review of supporting
documentation, we constructed a detailed transaction ledger totaling $999,117,563 2, which agreed to the
Spend and Budget Reports.
After reconciling totals by project, there remained hundreds of line items missing key pieces of
information needed for analysis, such as vendor paid and payment amount, as many of the transactions
were recorded via manual journal entries (i.e., batches) rather than individual disbursements through
accounts payable. Through additional review of journal entry documentation and inquiries to District
personnel, we identified the vendors paid for nearly all 15,000+ transactions included in the detailed
listing.
There are 22 line items/journal entries totaling a negative $461,310.85, for which vendor details could not
be identified. However, this amount is decreasing the total spend and, therefore, is likely the
reclassification of costs between projects rather than unknown disbursements for which we have no
details. Therefore, we have inherently tested the transactions/vendors related to these 22 line items.
These inconsistencies and omissions in maintaining a complete and accurate transaction listing pose
significant challenges to the accurate tracking and management of E-SPLOST activities. They also
resulted in significant additional time in our engagement, as, in order to comprehensively test E-
SPLOST-related spending, we needed the detailed components of what was spent.
Recommendation #2
Industry best practice is to reconcile detailed subledgers to the general ledger on a monthly basis. All
variances should be investigated and resolved within 30 days.
The District should craft and adhere to a policy that all sub-ledger systems must be reconciled to general
ledger data monthly, with review from a member of management with the appropriate level of
2
The $841,340 difference between the $998M in the Spend and Budget Reports and the $999M in our detailed transaction
listing is a result of the timing between obtaining the Spend and Budget Reports and later creating a detailed transaction
listing. We included the additional $841,340 of detailed transactions in our analysis.
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knowledge and authority. Additionally, action plans should be developed to investigate and clear any
variances within 30 days.
The District should also provide comprehensive training sessions, standard operating procedures, and
ongoing support to personnel responsible for financial record-keeping duties. Employees should have
the necessary knowledge and skills to effectively utilize the accounting system or software; Munis has
the capability to track spending by project, which should be leveraged for future E-SPLOST projects.
Training should cover topics such as data entry techniques, ledger reconciliation procedures, adequate
journal-entry documentation, and error resolution protocols. The District should encourage open
communication channels for employees to seek assistance or clarification on ledger-related matters.
Suggested timeframe for implementation: Q1-Q2 FY 2025
DCSD Response: Management agrees with the Auditor’s observation and recommendation.
The conversion to Munis started in 2018 and was completed in 2024. During this time frame transactions
ran through both the current Munis and legacy CrossPointe systems. Now that the conversion to Munis
is complete, all revenue and expenditure details and the capital project subsidiary ledger are within one
system. Management will develop policies and procedures to reconcile the capital project subsidiary
ledger to the general ledger on a monthly basis as well as provide training and ongoing support to
personnel responsible for financial record-keeping duties.
Expected Implementation Completion: Q2 FY2025
Finding #3 – Contract Execution and Monitoring
Observation: The District’s contractual and financial processes for implementing capital improvements
from procurement and planning through construction and close-out can be significantly improved from
its current state. This includes procurement documentation, establishing and tracking the budget-to-
actual costs from the planning phase through construction (including contingencies), and close-out
activities.
Background/Details:
Contract Forms
We reviewed the construction management proposals, contracts, and Payment Applications for fifteen
(15) capital projects (5 new construction and 10 renovations/additions) as part of E-SPLOST IV and E-
SPLOST V. From our review of the procurement process, the District utilizes its own set of construction
contracts and issues request for qualifications and proposals for individual projects in alignment with
industry practices. For the new construction projects, the original contracts for pre-construction match
the proposing firms’ proposed fee for pre-construction services. We found instances of executed contract
forms with blank line items related to fees and costs for construction services (i.e., Construction
Manager (CM) fees, staffing, general conditions, insurance, etc.).
Under normal industry, standard documents such as AIA documents, EJCDC documents, or Consensus
documents, a separate document called the “General Conditions of Construction” governs the processes
associated with administering the construction process and outlines the “cost of work” and change
orders/contingencies. Additionally, this document is incorporated into both the Architect Engineer
(“AE”) and CM/General Contractor (“GC") contracts as a “bridging” document to ensure that the separate
obligations of the AE and CM under their respective contracts align to allow for the smooth
administration of the work. In the Dekalb County School District contract documents, we observed that
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there is no such bridging document, which could give rise to coordination issues during construction
administration.
In addition, we observed in the CM Guaranteed Maximum Price (GMP) Lump Sum contracts that the
scope of work was articulated by a general reference to the drawings, project manual, and addendum.
The best practice is to provide more specificity of the project documents by including the dates published
and the control version and/or having the AE provide their index of drawings and specifications (with
dates of final issuance) for incorporation. This will help to avoid disputes over what version of the
documents formed the basis of the contract.
Payment Applications
Observed multiple instances where the architect of record did not certify the Application for Payment.
The architect’s certification is a critical control as an independent representation of the architect’s belief
that the work has progressed to the point of the requested payment and that the work is in general
conformance with the contract requirements. It also allows the review of change orders and an allocation
as to the cause of such (field condition, error or omission, missing bid scope, Authorities Having
Jurisdiction (AHJ) requested change, unforeseen conditions, etc.)
We did not observe any sworn statements included in payment applications. While not contractually
obligated, the inclusion of sworn statements is a best practice requiring the CM/GC to attest that the
contractors listed are the only contractors providing labor and materials and that the breakdown of costs
is accurate.
Sworn statements allow the Owner to monitor the flow of costs among the CM/GC and subcontractors,
secure appropriate waivers, and identify all potential claimants, secure appropriate waivers. An industry
standard, AIA G907-2022, applies to this scenario.
While lien waivers/releases were included in some payment applications, not all payment applications
included these documents. Without a supporting sworn statement, it is impossible to determine if all
waivers and releases were provided.
Bonding/Insurances
Bonding of the prime CM/GC is required by GA law for public contracts. A CM on a cost-plus contract
often requires their subcontractors to also provide a bond protecting the CM against a subcontractor’s
default at the Owner’s cost. The CM is already responsible for the subcontractor’s performance or lack of
performance; no meaningful benefit to the Owner is provided by double bonding. Observed instances of
double bonding being listed in the schedule of values, but no bond information was provided to
substantiate the procurement of a bond.
Instead of a subcontractor bond, some CMs attempt to secure a subcontractor default insurance (“SDI”)
policy or provide self-insurance. As with a subcontractor bond, SDI is a protection measure for the CM
provided at the Owner’s cost with no meaningful benefit being provided to the Owner. Observed
instances of CMs seeking payment for SDI policies without backup, demonstrating any policy was
procured.
Cost Plus Contracts
Upon reviewing the contracts and payment applications, we observed instances of large change orders
ranging from $5,000,000 up to $22,942,000. These change orders are part of the construction
management process of bidding out the individual trade contracts and assigning these to the engaged
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Construction Manager. Included with the change orders are costs associated with the CM fee, staffing,
general conditions, and insurance.
It is best practice to have contractual terms governing the use of the contingency (e.g., specifying a
procedure for the use, the allowable uses, and a drawdown schedule for the return of unused contingency
to the Owner over the duration of the Project). Did not observe adequate contingency controls within the
cost-plus contracts relative to the original budget to actual costs, cause of the contingency, reallocation
of unused contingency, etc.
It is best practice to maintain an Owner Contingency within an overall project budget; observed
instances where the Owner Contingency was held within the CM Guaranteed Maximum Price. This is not
a preferred practice given:
1. If the Owner Contingency is within the GMP, there is a lack of contingency controls, and the CM
is entitled to charge a related fee
2. If outside the CM contract, Owner contingency can be used for other contracts and costs at the
owner’s discretion
Recommendation #3
Industry best practices are to review and update procurement processes to align with current market
trends and conditions. For this recommendation, the District should conduct a comprehensive overview
of its procurement of Construction Management services in alignment with its contract documents and
incorporate industry “best practice” processes relative to defining the following;
• Construction Management Fees (Overhead & Profit)
• Staffing for pre-construction and construction services
• General conditions, insurance, and contingency use.
In addition, bridging documents and more specificity of the project bidding documents, including the
dates published, control version, and/or having the AE provide their index of drawings and specifications
(with dates of final issuance) for incorporation.
Included in the contract review process, the District should conduct a comprehensive overview of the
Payment Application process to ensure that multiple departments are reviewing, receiving, and
approving the applications for payment, including the application of the proper CM costs, including fees,
staffing, general conditions, contingency use, allowance use, and insurances and that multiple
departments received and retain these records accordingly.
Suggested timeframe for implementation: Q1-Q2 FY 2025
DCSD Response: Management agrees with both the Auditor’s observation and recommendation.
DCSD will contract and leverage input from a qualified third-party qualified consultant to work with the
District’s Office of Legal Affairs to develop a framework within the newly developed Standard Operating
Procedures (see Finding #1 response) to ensure that the District’s construction management function
meets the best industry standards – particularly in the consideration and approval of various elements
of total project expenditures with the goal of minimizing final project cost and creating project budget
savings wherever possible. The District’s Office of Legal Affairs will also work with DCSD Finance to
ensure that the capabilities of Munis’ contract management module, which is already in use, are also
deployed to those ends.
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Expected Implementation Completion: Q3 FY2025
Finding #4 – Records Retention
Observation: The District did not maintain records in an organized and auditable manner. Additionally,
the District failed to appropriately maintain records in accordance with the DeKalb County School
District Records Retention Schedule, dated 2013.
Background/Details: E-SPLOST-related records prior to conversion to the Munis ERP system, if
retained, were maintained in paper form and stored in a disaggregated fashion at several District
locations. 61,454 documents were requested to complete detailed testing of the expenses. The requested
documents consisted of invoices, evidence of approval, evidence of payment, and evidence of payment
terms for each expense. Requests for the District to produce documentation, if fulfilled, often took 90
days or more.
To alleviate the delay in the District providing documentation for transactions not recorded in Munis,
the District requested Plante Moran staff conduct physical searches of District locations for
documentation. Our team expended 1,000 hours physically searching District property for
documentation to complete our procedures.
Per Section 10 – “Property” of the retention schedule, records related to capital construction must be
maintained for 11 years after the completion of the project. There are 11,938 documents that have been
confirmed by District managers as either lost or destroyed and unable to be audited. Details regarding
the documents confirmed lost or destroyed are in the table below:
Count Confirmed Lost or
E-SPLOST Program Documentation Type Destroyed (by expense line
item)
IV Invoices 1,873
IV Payment Approval 1,963
IV Payment Support 2,339
IV Purchasing Terms 4,375
V Invoices 250
V Payment Approval 290
V Payment Support 23
V Purchasing Terms 825
Total 11,938
Instances of all documentation being lost or destroyed 1,234
Through testing procedures, our team learned the District did not communicate the need to retain
records to team members, as many individuals were unaware of the required retention policies.
Additionally, District management did not execute a monitoring program to ensure records were
retained in accordance with applicable policies.
Recommendation #4
Industry best practice is to adopt and adhere to a records retention policy that is monitored and enforced
by management.
The District should develop and deploy a records retention training program for all District personnel.
This training includes the following:
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1. Awareness of governing policies in place from a District and regulatory standpoint
2. Instruction that multiple retention timelines may apply to a single document. In these instances,
the longest of the applicable timelines applies
3. Best practices for storage contemplating security, structured folders, and searchability
4. Procedures for effective disposal
Additionally, the District should develop and execute a management monitoring program to inspect the
effectiveness of the District’s records retention policy on a monthly basis. Monitoring should focus on
selecting key documents within each department on a rotating schedule to evaluate whether these
documents have been retained or not retained in accordance with applicable policies. This will allow
future audits of E-SPLOST expenditures to be executed in a timely, efficient manner and improve the
District’s adherence to the DeKalb County School District Records Retention Schedule.
Suggested timeframe for implementation: Q1 – Q2 FY 2025
DCSD Response: Management agrees with the Auditor’s observation and recommendation.
DCSD Management has charged the Division of Information and Instructional Technology (DIIT) with
developing and promulgating the District-wide Records Retention Policy that is in compliance with the
Georgia Records Retention schedule which is authored and overseen by the Georgia Secretary of State.
DIIT is also spearheading the effort to digitize all existing paper records that have not surpassed the
retention date so that they remain accessible for auditing and litigation purposes.
Expected Implementation Completion: Retention Schedule Q2 FY2025; Digitization Q1 FY2026
Finding #5 – Vendor Selection
Observation: Selection committees to determine vendors to provide services paid for with E-SPLOST
funding were not comprised of sufficient and adequate team members, as recommended by the policy. Of
328 vendor scoresheets analyzed, we noted that 68% did not have the appropriate split between DCSD
personnel and third-party project management personnel.
Background/Details: The District utilized selection committees to determine vendors to provide services
paid for with E-SPLOST funding. Per the PPM, the following guidelines for selection team compositions
are recommended:
1. E-SPLOST IV
a. Two DCSD team members
b. Two third-party project management team members
2. E-SPLOST V
a. Three DCSD team members
b. Two third-party project management team members
In our analysis, we noted the following:
1. Overall findings:
a. 99% of scoresheets had four or more evaluators on the selection committee
b. Of the scoresheets that had four or more evaluators, 57% of the committees had the
appropriate split between DCSD and AECOM members
2. E-SPLOST IV
a. 2 of 243 score sheets had less than 4 evaluators
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b. 104 of the 241 score sheets had more DCSD team members than third-party project
management team members
3. E-SPLOST V
a. 48 out of 85 score sheets had less than 5 evaluators
b. 4 out of 85 score sheets had more third-party project management team members than
DCSD team members. In all 4 instances, contracts were awarded to Evergreen
Construction
Additionally, we noted the following trends:
Several vendors were selected more often than others:
1. Centennial Contractors—selected for 12.0% of the total scoresheets analyzed
2. Gardner Spencer Smith Tench & Jarbeau—selected for 6.6% of the total scoresheets analyzed
3. Construction Works—selected for 6.2% of the total scoresheets analyzed
Several evaluators were commonly a part of the selection committee:
1. Director of Design and Construction, DCSD—evaluated 19.1% of scoresheets analyzed
2. CIP Deputy Program Director, AECOM—evaluated 5.9% of scoresheets analyzed
3. Contract Compliance Specialist, DCSD—evaluated 5.5% of scoresheets analyzed
4. CIP Project Manager, AECOM—evaluated 5.2% of scoresheets analyzed
5. Construction Manager, DCSD—evaluated 5.1% of scoresheets analyzed
Our team requested the rating criteria detail of each scoresheet by each evaluator; however, these were
not retained by the District in accordance with the DeKalb County School District Records Retention
Schedule, dated 2013, therefore limiting our procedures able to be performed. On the final evaluation
forms evaluated, the final score for the proposing vendors was recorded. The scoring rubric was not
consistent throughout the E-SPLOST IV and V selection meetings. While the criteria vendors were scored
on varied on the final evaluation forms, proposing vendors were typically scored on project approach,
scheduling, cost, and previous experience.
Recommendation #5
Industry best practice is to ensure a fair, equitable, knowledgeable, and neutral representation of
evaluators for all public bids. Additional best practices include retaining score sheets, including
evaluation details for all public bids.
The District should implement a monitoring program for the Procurement Department to ensure
representation on selection committees is in line with policy and best practices. This monitoring
program should include an objective review prior to vendor evaluation to ensure the individuals assigned
to the selection committee are in alignment with applicable policies. A component of the vendor
selection process should include a certification from the Procurement Department that the selection
committee was aligned with applicable policies. The District should also implement a standard scoring
rubric and ensure the full evaluation scoresheets are retained for audit purposes.
Additionally, on at least a semi-annual basis, the Internal Audit Department should execute reviews of
the Procurement Department’s adherence to these policies by selecting a sample of vendor evaluations to
validate that the selection committee representation is appropriate.
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Suggested timeframe for implementation: Q2-Q3 FY 2025
DCSD Response: Management agrees with the Auditor’s observation and recommendation.
DCSD will contract and leverage input from a qualified third-party qualified consultant to assist with
development and implementation of the recommended monitoring program designed to provide
assurance to the Procurement Department that representation on selection committees is in line with
policy and best practices. Internal Audits & Compliance is also charged with reviewing vendor
evaluations to ensure compliance with the Procurement Vendor Selection policy.
Expected Implementation Completion: Q3-Q4 FY2025
Finding #6 – Purchase Approval
Observation: The District did not have a process for ensuring purchase orders were created and
approved prior to the purchase being made and invoice being generated by the vendor. In instances in
which a purchase order was not available for audit, District administration indicated an accounting
transmittal form could be leveraged. In total, 3,677 transactions (23%) did not have a purchase order or
transmittal form that documented all approvals as required by policy.
Background/Details: Through inquiry with District personnel, it was noted that in instances where a
purchase order was not available, and an invoice was due to be paid, the District utilized “after the fact
purchase orders,” in which the individual requesting payment of the invoice would approve the purchase
of the goods after delivery and invoicing had already occurred.
Recommendation #6
Industry best practice is to employ a suite of internal controls to ensure the approval of a purchase order
prior to any purchase made with District funds.
The District should ensure that the related purchase order policy and procedures are clear and enforced
so that purchases are not made without a fully approved purchase order from Munis.
Suggested timeframe for implementation: Q1 FY 2025
DCSD Response: Management agrees with the Auditor’s observation and recommendation.
DCSD’s legacy ERM CrossPointe system was not capable of creating or managing “blanket” POs covering
entire projects despite that it has been a standard practice in business for years. DCSD employed the use
of “after the fact” purchase orders created for each individual invoice associated with a particular
project. The practiced continued after the transition to Munis, although no longer necessary.
DCSD has now stopped the use of “after the fact” purchase order processing in the ESPLOST program as
Munis has the capability to create and manage “blanket” purchase orders that are created for the entire
budgeted cost of the project and liquidated as project invoices are approved and paid. Furthermore, the
internal workflow within Munis ensures that necessary approvals are recorded before payment requests
can be properly approved and verified utilizing the 3-way match, which is a best practice for final
approval requirement for payment of purchases.
Expected Implementation Completion: Q1 FY2025
15
Finding #7 – Expense Review
Observation: Upon completion of a comprehensive review of the E-SPLOST IV and V expenses, there are
significant discrepancies that raise concerns regarding the current accounting, expense tracking, and
approval practices. Our testing revealed instances of errors in accounting entries that were not
corrected, improper approval processes, and a lack of adequate documentation to support the
expenditures.
Background/Details: Plante Moran was engaged to execute detailed testing overall E-SPLOST IV and E-
SPLOST V expense transactions. Note: Our review of E-SPLOST V transactions was as of May 2023 and
may not include all E-SPLOST V transactions as of the date of this report. We intended to rely upon
District personnel to provide expense ledger detail from CrossPointe and Munis; however, due to the
District’s inability to provide a complete and accurate ledger, our team re-constructed a ledger of E-
SPLOST IV and E-SPLOST V expense detail.
Through our analysis, we identified the projects and expenses within the E-SPLOST IV and E-SPLOST V
funds through May 8, 2023. For brevity purposes, the accompanying table below summarizes the projects
in which less than 25% of the project expenses were testable due to documentation retainage.
Additionally, the table's final row presents a cumulative count of expenses and spending for projects with
over 25% of testable expenses. Note that this represents a selective overview of the audited projects and
expenses. A complete list is available upon District request.
% of
Count of Total amount Effective?
Fund Project Project Title Scope of work expenses
expenses expensed (Y/N)
testable
Program Revenue
IV 000-34 and Bond SPLOST Support 16 $40,286,910 0% N
Payments
Terry Mill
IV 137-34 SPLOST Support 1 $270 0% N
(canceled)
Warren Tech
IV 138-34 SPLOST Support 1 $270 0% N
(cancelled)
Chamblee MS –
IV 305-34 Capital Renewal: Facility Upgrades 1 $439 0% N
Electrical
Southwest DeKalb
IV 328-34 HS – Capital Facility Upgrades 1 $342,477 0% N
Renewal: Roofing
Clifton ES –
Capital Renewal –
Code
IV 407-34 Facility Upgrades 3 $49,090 0% N
Requirements:
Kitchen
Equipment, HVAC
Safety/Security
Safety/Security
IV 600-34 System Upgrades 3 $1,375,471 0% N
System Upgrades
FY 2013
16
% of
Count of Total amount Effective?
Fund Project Project Title Scope of work expenses
expenses expensed (Y/N)
testable
Safety/Security
Safety/Security
IV 610-34 system Upgrades 21 $917,248 0% N
System Upgrades
FY 2014
School Bus
IV 640-34 School Buses 45 $11,219,567 7% N
Purchase
Technology
Infrastructure
IV 700-34 Equipment and 592 $7,648,100 6% N
Refresh
Infrastructure
Technology
Technology
IV 710-34 Equipment and 1073 $25,231,314 3% N
Equipment
Infrastructure
Chamblee HS:
IV 900-34 Replacement Major Projects 48 $48,739,312 0% N
(COPS Repayment)
IV 903-34 DCSD Staff SPLOST Support 11 $7,583,648 0% N
Set aside funds for
other fire and life
safety improvements,
which could include
enhancements to fire
alarm systems,
Life Safety Set-
V 109-35 emergency lighting, 2 $1,050 0% N
aside
and other life safety
improvements to
support our
partnership with the
DeKalb Fire Marshal’s
office
Purchase new
portable classrooms
V 531-35 Portables to replace outdated 15 $2,436,169 13% N
units and for
enrollment increases
Salary for District
employees in support
V 603-35 DCSD Salary 534 $4,760,928 0% N
of the E-SPLOST
program
25%-
All other projects in E-SPLOST IV and E-SPLOST V 13,290 $848,525,299 N
100%
17
Audit Approach
Our team utilized the following testing steps during our review of the transactions:
Test
Procedure Occurrence of Test
Step
#1 Ensure the amount per the vendor invoice agrees with Performed on all expenses
the amount recorded in the general ledger
#2 Ensure the amount per the vendor invoice and general Performed on all expenses
ledger agrees to the amount per the check paid
#3 Ensure the vendor per the vendor invoice and Performed on all expenses
recorded in the accounting system, agrees to the
vendor name listed on the check
#4 Ensure the amount recorded in the general ledger for Performed on all expenses
the expense does not exceed the amount per the
purchase order
#5 Ensure there was adequate segregation of duties Only performed for expenses recorded in
between the initiator of the purchase order, the Munis due to CrossPointe not having the
approver of the purchase order, and the receiver of the functionality of recording the individual
purchase order responsible for initiating, approving, and
receiving
#6 Ensure the expense appears reasonable relative to the Performed on all expenses
applicable E-SPLOST project
#7 Ensure the pay application contains appropriate Due to the limitations noted above
signatures per District policy regarding Test Step #5, Test Step #7 was
utilized for transactions recorded in
CrossPointe to ensure appropriate
approval of the expense was obtained
prior to payment of the invoice.
As a result of our testing, we noted the following exceptions related to the test steps above:
E-SPLOST IV
Count of Total of
Finding
Deficiencies Deficiencies
Documentation confirmed lost (invoice, purchase
3,664 $125,223,671
approval, purchase terms, and/or evidence of payment)
Expense was improperly recorded and was not corrected 13 $132,346
Evidence of appropriate approval for the expense was not
1,548 $118,753,558
available
Unable to substantiate the use case for the expense 34 $14,685,162
PM did not receive documentation to support appropriate
135 $104,037,499
testing in a timely manner
Total 5,394 $362,832,236
18
E-SPLOST V
Count of Total of
Finding
Deficiencies Deficiencies
Documentation confirmed lost (invoice, purchase
207 $7,610,229
approval, purchase terms, and/or evidence of payment)
Expense was improperly recorded and was not corrected 18 $512,034
Evidence of a 3-way match being performed was not
155 $6,616,589
available
Unable to substantiate the use case for the expense 9 $8,906,277
PM did not receive documentation to support appropriate
587 $97,693,503
testing in a timely manner
The Purchase Order was created after the invoice was
2,285 $137,452,339
created and billed
Total 3,261 $258,790,971
Recording of expenses to the general ledger was performed via manual entry. This presented an
opportunity for human error during the expense entry process. A lack of management oversight and
effective controls resulted in errors not being identified. During our detailed testing, we noted the
following deficiencies as identified in the tables above as it relates to “Expense was improperly recorded
and was not corrected”:
1. An invoice in the amount of $1,365 was approved for payment by the District for the same
services as another invoice for $1,365; however, the invoices contained different invoice numbers.
The invoice was paid to the vendor twice.
2. Five invoices with the same invoice numbers and the same services were paid to the vendor twice.
The invoices paid twice total $3,850. The invoices were processed by the District and paid twice
on separate checks.
3. There were four expenditures in E-SPLOST IV and one expenditure in E-SPLOST in which there
was a discrepancy in the amount invoiced from the vendor and the amount paid to the vendor.
The total difference between the invoice amount and amount paid was $25,393 for E-SPLOST IV
and $114.15 for E-SPLOST V.
4. There were two invoices totaling $17,000 in E-SPLOST IV and fifteen invoices totaling $493,175 in
E-SPLOST V that were recorded to incorrect projects and were not corrected.
5. For E-SPLOST V, two invoices were over the approved purchase order amount resulting in $7,782
being expensed over the approved amount.
6. In E-SPLOST IV, there was an invoice recorded and paid $200 over the vendor invoice amount.
As part of our procedures, we reviewed the codification related to E-SPLOST funds as governed by
Georgia's constitution and statutory law. Specifically, E-SPLOST funds are regulated under Article VIII,
Section VI, Paragraph IV of the Georgia Constitution, which provides the legal framework for the
collection and allocation of these funds for educational purposes. The Official Code of Georgia Annotated
(O.C.G.A.) further details the administration of these funds through §§ 48-8-121 to 48-8-122 and §§ 48-8-
19
140 to 48-8-141, ensuring that the district adheres to the stipulated guidelines for capital outlay projects.
Additionally, the definitions and applications of capital outlays and educational facilities are outlined in
O.C.G.A. § 20-2-260(b)(3) and § 20-2-260(b)(5), respectively, with Rule 160-5-4-.04 providing further
clarification on the definition capital outlays respective to public schools.
Our procedures included using professional judgement to determine if the scope and work performed
falls within state guidelines, reviewing the transparency of reporting to the public, and ensuring
maintenance and operations costs of the District were excluded from E-SPLOST IV and V expenditures.
Due to incomplete retainage of documentation, our team could not validate the full extent of funds to
ensure compliance with regulations and guidelines, as well as compliance with established District
standards and practices for the capital expense program. Additionally, due to the lack of retained
documentation, we could not validate the E-SPLOST IV and V expenses, excluding the District’s
maintenance and operations costs. Our team was able to obtain the annual reports for fiscal year 2013
through fiscal year 2023 as required per O.C.G.A. § 48-8-122. However, due to incomplete retainage of
documentation, our team could not validate that the reporting within the annual reports is a complete
and accurate representation of project spend.
Recommendation #7
Industry best practice is to maintain an effective process for recording expenses through consistent
adherence to a defined policy and procedure and execute a strong, ongoing administrative monitoring
procedure.
The District should implement a robust internal control system to prevent and detect errors in a timely
manner, enhance the expense approval workflow, and communicate the record retention policy to
District personnel to ensure thorough documentation for all transactions. Implementing a policy
disallowing after-the-fact purchase orders will protect the District from being responsible for expenses
that are not approved prior to the expense occurring.
Additionally, retraining of staff on financial policies and procedures will be crucial to prevent recurrence
of such issues. The District should ensure team members are trained on how to effectively review
invoices for specific services. Team members should track long-term projects for services previously
invoiced and ensure services are not invoiced multiple times. These steps will not only rectify the
current deficiencies but also strengthen financial management practices for the future.
The District’s adherence to the state’s codifications will demonstrate its commitment to following the
legal requirements for the betterment of its educational facilities and the community it serves.
Suggested timeframe for implementation: Q1 FY 2025
DCSD Response: Management agrees with both the Auditor’s observation and recommendation.
DCSD has now stopped the use of “after the fact” purchase order processing in the E-SPLOST program
since Munis has the capability to create and manage “blanket” purchase orders that are created for the
entire budgeted cost of the project and liquidated as project invoices are approved and paid. By
leveraging the approval workflow function and reporting capabilities of Munis, as well as obtaining
technical assistance from a qualified third-party consultant, new Standard Operating Procedures to
ensure that DCSD’s construction management function corrects residual deficiencies and strengthens
ongoing expense tracking and reporting in the E-SPLOST program.
Expected Implementation Completion: Q1-Q2 FY2025
20
Finding #8 – Internal Controls
Observation: As part of our procedures to review the oversight and management of E-SPLOST funds, our
team reviewed the internal controls that were in place or not in place during the E-SPLOST program. We
noted 18 key controls per the PPM that should have been in place. During our review of the adequacy of
the design of each control, we noted that 7 of the 18 controls were not designed to effectively provide
oversight and management of E-SPLOST funds.
Background/Details: Our team met with AECOM and District personnel with a responsibility over E-
SPLOST processes. Our meetings consisted of interviewing the identified individuals to understand their
roles, responsibilities, and processes in ensuring accurate reporting, oversight, and management of E-
SPLOST funds. Management indicated the root cause for the design deficiencies was due to the lack of
communication of the policy and procedures manual. Detailed below are the 7 controls where our team
noted ineffective design:
Control ID Control Description Detail of Design Deficiency
SPLOST.01 All Project-level Schedules are monitored For the selected project (Indian Creek
continually and updated at least monthly to Elementary School), evidence of approval of
reflect current project status. the change to the project schedule does not
exist, and subsequent master schedules did
not show an indication of the updated
expected completion date.
SPLOST.04 No less than quarterly, the PMT shall The process of reconciliation is not a true
reconcile the Proliance Cost Data with the reconciliation. Any missing entries in
District's Munis accounting data. Proliance are hardcoded with data from
Munis. The reconciliation document for May
2022 for E-SPLOST IV shows a variance of
$75M. Per discussions with the District, true-
up entries are made to agree Munis to
Proliance.
SPLOST.06 The Program Master Schedule is monitored Evidence of communication of the Program
continually and updated at least monthly to Master Schedule to District stakeholders on a
reflect the current program status and is monthly basis (inclusive of project timelines)
communicated to District stakeholders. was unable to be provided by the District for
the selected project (DeKalb Early College
Academy - Security Vestibules).
21
Control ID Control Description Detail of Design Deficiency
SPLOST.08 For large projects ($15M - $20M), the PMT PM For the selected project (Dunwoody
will submit the Project Schedule to the Chamblee Elementary School), evidence of
District for their review and approval/disapproval of the project schedule
approval/disapproval by the conclusion of was not retained.
the Planning Phase. The District will review
and approve/disapprove the Project Schedule
within two weeks after submittal.
SPLOST.14 A minimum of two (2) DCSD employees and Per discussion with management, detailed
one (1) PMT member must be in attendance scoresheets showing the names and scores of
when the bids/ proposals are opened and each evaluator were not retained.
logged in. The Proposal Receipt Log must be
signed by all three (3) attendees, and signify
by signing the bid evaluation form that the
bids were received and opened according to
the state law and board policies. The
Selection Committee rotates with each
solicitation. For awards, the Review
Committee signs the recommendation of the
award, the PMT Program Director and DCSD
Director of Design & Construction sign the
recommendation as a reviewer, and the
Executive Director of Facilities Management
signs the recommendation as an approver.
The signed package is submitted to the DCSD
Legal Department for review and approval. If
the award recommendation is over $50,000
for Process for General Construction, then
the contract requires DCSD Board of
Education approval. If the award
recommendation for Process for Design is
over $100,000, then the contract requires
DCSD Board of Education approval.
SPLOST.16 The Project Management Team (PMT) Project For the selected project, (Druid Hills MS)
Manager (PM) will review/monitor the Plante Moran was not provided a certificate
contractor's schedule and confirm that the of substantial completion and punch list.
Architect/Engineering (A/E) is performing its
contractual responsibilities.
22
Control ID Control Description Detail of Design Deficiency
SPLOST.18 At a minimum of each month, the PMT The District was unable to provide evidence
compares the revenues received by the of review for excess funds being frozen.
District from primarily the E-SPLOST
receipts and GaDOE reimbursements versus
the obligations that the District has agreed to
through executed contracts. Any excess
funds are frozen and remain in a DCSD bank
account.
Recommendation #8
Industry best practice is to employ a suite of preventive and detective controls that aid in reducing the
risk of misstatement or fraud. These controls can leverage the capabilities of the ERP system, with
manual controls layered in as an extra line of defense.
The District should develop a control framework for future E-SPLOST programs, with a focus on
establishing and communicating policies and procedures to District and AECOM personnel. Additionally,
regular monitoring and periodic testing should be implemented to ensure that all controls are
functioning as intended. For those controls that continue to operate ineffectively, require remedial
training of the control owners consisting of a review of desktop procedures and affirmation of
understanding of the requirements to effectively operate controls.
A draft control framework the District should consider for implementation is included below:
Control
Control ID Control Description
Frequency
SPLOST.01 Monthly All Project-level Schedules are monitored continually and updated at least monthly
to reflect current project status.
SPLOST.02 Weekly The Project Manager Team (PMT) Project Managers (PMs) provide a weekly status
report on each of their active projects to the Deputy Program Director for
transmittal to the District on Wednesday by 2:00 PM each week.
SPLOST.03 As Needed Changes to the project/program budget are managed by the PM and approved by the
District.
SPLOST.04 Quarterly No less than quarterly, the PMT shall reconcile the Proliance Cost Data with the
District's Munis accounting data. This should be reviewed and approved by the
District's accounting team.
SPLOST.05 As Needed For all invoices, the PMT Project Administrator shall date stamp the invoice and
distribute the invoice to the appropriate PMT Project Manager. The PMT Project
Manager shall complete the DCSD Accounting Transmittal. The Project Manager
reviews the accounting transmittal for accuracy, signs, and dates, and returns it to
the PMT Project Administrator.
SPLOST.06 Monthly The Program Master Schedule is monitored continually and updated at least
monthly to reflect current Program status.
SPLOST.07 Quarterly The Program Master Schedule is revised as directed by the District and approved by
the Board of Education quarterly.
23
Control
Control ID Control Description
Frequency
SPLOST.08 As Needed For large projects ($15M+), the PMT PM will submit the Project Schedule to the
District for their review and approval/disapproval by the conclusion of the Planning
Phase. The District will review and approve/disapprove the Project Schedule within
two weeks after submittal.
SPLOST.09 As Needed If the Contractor’s schedule update shows a substantial completion date of 30 or
more days beyond the contract completion date or any milestone completion date,
the contractor will submit a proposed Recovery Schedule showing how it plans to
recover the lost time. The PMT PM will evaluate the Recovery Schedule and forward
recommendations for any schedule modification to the District. Any resulting
proposed changes to the Program Master Schedule require District approval.
SPLOST.12 As Needed Approval for intent to advertise is approved by the DCSD Legal Department prior to
listing.
SPLOST.13 As Needed The DCSD Procurement Specialist posts the solicitation on the DCSD website and
notifies by email all vendors known to the District to be interested in submitting for
the solicitation. If pre-qualified vendors are available, the DCSD Procurement
Specialist will select three vendors to submit proposals for the work in question.
SPLOST.14 As Needed A minimum of two (2) DCSD employees and one (1) PMT member must be in
attendance when the bids/ proposals are opened and logged in. The Proposal Receipt
Log must be signed by all three (3) attendees and signify by signing the bid
evaluation form that the bids were received and opened according to the state law
and board policies. The Selection Committee rotates with each solicitation. For
awards, the Review Committee signs the recommendation of the award, the PMT
Program Director and DCSD Director of Design & Construction sign the
recommendation as a reviewer, and the Executive Director of Facilities Management
signs the recommendation as an approver. The signed package is submitted to the
DCSD Legal Department for review and approval. If the award recommendation is
over $50,000 for Process for General Construction, then the contract requires DCSD
Board of Education approval. If the award recommendation for Process for Design is
over $100,000, then the contract requires DCSD Board of Education approval.
SPLOST.15 As Needed Upon approval, the contract package is returned to the DCSD Contract Specialist,
who transmits the contract package to the DCSD Office Specialist of Executive
Assistant to the COO, who will sign the transmittal form and forward the documents
for signature by the DCSD Superintendent and Board of Education Chairperson (as
appropriate).
SPLOST.16 As Needed The PMT PM will review/monitor the contractor's schedule and confirm that the A/E
is performing its contractual responsibilities. For all projects, on a monthly basis,
the PMT PM will document their review of the contractor's schedule.
SPLOST.17 As Needed Budget reallocations taken from program contingency over $100,000 are approved
by the Board of Education.
SPLOST.18 Monthly At a minimum of each month, the PMT compares the revenues received by the
District from primarily the E-SPLOST receipts and GaDOE reimbursements versus
the obligations that the District has agreed to through executed contracts. District
accounting staff will review and approve the reconciliation.
SPLOST.19 As Needed At the conclusion of each project, the PMT will conduct a walkthrough validating the
conditions of the completed project and affirm such on the closeout checklist.
24
Control
Control ID Control Description
Frequency
SPLOST.20 As Needed A 3-way match is performed by the District's accounts payable department to ensure
what was ordered by the District matches what was received and invoiced.
SPLOST.21 Continuous Munis enforces segregation of duties within the procurement and disbursement
cycle to ensure those with procurement abilities do not have disbursement abilities.
SPLOST.22 As Needed All vendor contracts are reviewed by the District’s Chief Legal Officer and a subject
matter expert for the goods/services being procured.
Suggested timeframe for implementation: Q2 FY 2025
DCSD Response: Management agrees with both the Auditor’s observation and recommendation.
DCSD will leverage the technical capabilities of Munis associated with workflow and document
verification, as well as contract a qualified third-party consultant to develop a framework within the E-
SPLOST program that addresses internal controls. Additionally, Internal Audits & Compliance has begun
the process of developing an Enterprise Risk Management (ERM) framework that will institute
preventive and detective controls to reduce the risk of material misstatement or fraud within the
District’s business functions.
Expected Implementation Completion: Q3-Q4 FY2025
Finding #9 – Change Orders
Observation: During our review of the District’s E-SPLOST IV and E-SPLOST V processes it was noted 689
change orders with a total value of $126.8M were recorded. We noted 30 instances of change orders over
$100,000 when the base contract value was less than $1M. For the 30 instances, the total value of the base
contracts was $8M. After the change orders were applied, the total contract value including change orders
was $111.5M.
Background/Details: Throughout the construction process, changes in scope, conditions, costs, etc.,
occur that require an amendment to the originally contracted price. In these instances, a change order is
issued and establishes a new contracted price and term for the project.
As part of our comprehensive audit of E-SPLOST expenses, we focused on analyzing the construction
change order process. Our objective was to assess the effectiveness, compliance, and adherence to
established policies within this area. Our team requested the contract associated with the project, the
specific change order details, evidence of approval of the change order, and any relevant supporting
documentation for each of our selections.
Through discussions with DCSD staff, along with a review of policies and procedures in section 7-CON-
0030 2.0 in the PPM, we noted approvals from the Superintendent and the Legal Department are required
for each change order. Additionally, included in the justification for the change order there is required to
be:
1. Contractor documentation showing the necessary updates
2. Estimated costs
3. Valid reasoning for the change order
4. Approval from the Superintendent, and if the change exceeds $100,000, the Board of Education
Chair
5. Approval from the Legal Department
25
Audit Approach and Sample Selection
We began our analysis by gathering the entire population of change orders executed during E-SPLOST IV
and V, totaling 689 change orders with a total value of $126.8M. We selected 30 change orders with a total
value of $97.7M. This represents 77% of the total dollar value of E-SPLOST IV and E-SPLOST V change
orders. We made our selections for further analysis based on the following criteria:
1. Risk Assessment: We evaluated transactions based on the change order amount relative to the
contract value. Change orders that resulted in at least a 10,000% increase in the original contract
price were selected. 8 change orders were selected based on this criterion.
2. Change Order Volume: Projects with at least 20 executed change orders were deemed significant
and included in our sample. 15 change orders were selected based on this criterion.
3. Change Order Amount: Projects that approached the $100,000 threshold were chosen. According to
PPM section 7-CON-0030 1.3, change orders exceeding $100,000 must receive board approval. 4
change orders were selected based on this criterion.
4. Vendor Change Order Volume: Vendors that constituted at least 10% of all E-SPLOST IV and E-
SPLOST V project change order requests were selected for testing. 3 change orders were selected
based on this criterion.
5. Project Significance: We sorted the change orders based on the highest total expenditure amount
for each of the specified criteria and selected projects with the highest spending.
Audit Findings
In our audit of 30 samples, 2 samples lacked evidence of a review by the Legal Department. However, our
primary concern centered around large change orders approved on initially small contracts. In our
sample of 30, we identified 8 instances where the initial contracts underwent significant increases in
total contracted amount and scope. These instances are described below:
Original Contract Percent
Project Name/Number Change Order Title Change Order
Amount increase
Indian Creek ES – 223-423 Indian Creek ES GMP-1 (Site $50,000 $5,000,000 10,000%
Work)
Indian Creek ES – 223-423 Indian Creek ES Component $50,000 $11,700,000 23,400%
GMP #2
Indian Creek ES – 223-423 Indian Creek ES Final GMP - CO $50,000 $19,850,000 39,700%
#3
McNair MS Replacement – Change Order #03 - Final GMP $35,000 $22,942,113 65,500%
505-422
McNair MS Replacement – GMP - Phase II - Structure $35,000 $9,098,879 26,000%
505-422 Package
McNair MS Replacement – GMP - Phase I - Site Package $35,000 $3,000,000 8,500%
505-422
Doraville United ES – 222- Gilbane - Change Order #01 $20,500 $5,000,000 24,400%
423 Early Release Package No. 1
26
Doraville United ES – 222- Gilbane - Change Order #03 $20,500 $15,378,262 75,000%
423 CKNES GC
This finding identifies the opportunity for contractors to exploit the procurement process. Contractors
have an opportunity to secure approval for a small contract amount during the vendor selection process,
then inflate costs significantly using change orders. This practice undermines the competitive bidding
process and is a way for vendors to manipulate the bidding process by appearing to be cost-effective to
the District.
Recommendation #9
Industry best practice is to maintain an owner contingency within the overall budget and ensure strong
controls exist within.
Additionally, the District should implement oversight procedures during the procurement process. This
could include a cap on the percentage increase allowable through change orders, regular audits of
contract amendments, and a review process by an independent committee. Additionally, training for
District officials on the identification and prevention of such exploitative practices by contractors may
help to ensure the integrity of the competitive bidding process.
Suggested timeframe for implementation: Q2 FY 2025
DCSD Response: Management agrees with the Auditor’s recommendation.
The District’s “Standard Form of Construction Management Contract” dictates the use of “Exhibit M” for
the submittal and approval of ‘partial’ (or ‘component’) GMPs. DCSD Management states that the Change
Orders observed by the Auditors are not technically Change Orders, but rather constitute the “Exhibit M”
under the Guaranteed Maximum Price proposals approved as part of the larger, total contract for
construction.
Similar to the DCSD Response to Finding #3, DCSD will contract and leverage input from a qualified
third-party qualified consultant to work alongside SPLOST Management and the Office of Legal Affairs
to develop a framework within the newly developed Standard Operating Procedures (see Finding #1
response) to ensure that the District’s construction management function meets the best industry
standards – including consideration and adjustments to contract structure and language, as well as the
approval process for elements of total project expenditures in a manner that puts DCSD at the best
possible advantage. The District’s Office of Legal Affairs will also work with DCSD Finance to ensure that
the full capabilities of Munis’ contract management module, which is already in use, are also deployed to
those ends.
Expected Implementation Completion: Q3-Q4 FY2025
Finding #10 – Project Spending
Observation: For 15 E-SPLOST IV and 2 E-SPLOST V completed construction projects, the total
expenditures surpassed the budgeted amount approved by the Board.
Background/Details: The Board approved the initial scope and budget for each project, with the
stipulation that any subsequent modifications to the scope or budget over $100,000 must be approved by
the Board. While there is a program contingency fund for unexpected increases in project costs, these
modifications may encompass alterations to the project's scope or even the discontinuation of other
projects.
27
We noted a consistent theme of fluctuating project budgets, incomplete retainage of change orders, and
the inability of the District to provide a comprehensive record of all contracts and change orders related
to E-SPLOST IV and E-SPLOST V expenses. Despite these issues, we noted the Operations team's monthly
financial reports stored within District drives have consistently shown that the E-SPLOST IV and E-
SPLOST V funds remain within the limits of the State's financial contributions.
During our review of project spend, we noted the following projects spent more than the approved
budget amount:
E-SPLOST IV Completed Projects
Total Amount Approved per Budget File $120,012,466
Total Amount Expended $123,801,093
Difference $3,788,627 Spent over budget
Project Budget Amount Expensed Amount Overspend:
108. Eldridge Miller ES ‐ ADA $747,374 $777,416 $30,042
115. Jolly ES ‐ ADA $777,934 $820,513 $42,579
134. Woodward ES ‐ ADA $540,143 $544,550 $4,407
139. Eagle Woods Academy Renovation $2,075,324 $2,093,864 $18,540
211. Buck Godfrey Stadium $2,031,078 $2,126,726 $95,648
304. Cedar Grove MS ‐ Capital Renewal $2,480,727 $2,507,511 $26,784
314. International Student Center $564,226 $624,641 $60,415
336. Wadsworth ES ‐ Capital Renewal $305,774 $343,189 $37,415
403. Brockett ES ‐ Capital Renewal $1,758,703 $2,748,030 $989,327
417. Kittredge ES ‐ Capital Renewal $329,195 $350,648 $21,453
505. McNair MS Replacement $40,731,144 $40,782,170 $51,026
506. Peachcrest ES Replacement $20,959,041 $21,356,984 $397,943
507. Pleasantdale ES Replacement $26,830,843 $28,307,843 $1,477,000
512. Henderson MS Renovation/Addition $19,312,027 $19,827,166 $515,139
519. Portable Classrooms $568,933 $589,843 $20,910
Total $120,012,466 $123,801,094 $3,788,628
E-SPLOST V Completed Projects
Total Amount Approved per Budget File $31,542,166
Total Amount Expended $31,720,045
Difference $177,879 Spent over budget
Project Budget Amount Expensed Amount Overspend:
201. Cross Keys High School $143,045 $310,973 $167,928
221. John Lewis Elementary School $31,399,121 $31,409,071 $9,950
Total $31,542,166 $31,720,044 $177,878
Our team reviewed the change orders available to support the amount spent over the initially approved
budget amount. Due to incomplete retainage of contracts and change orders and the inability to obtain a
28
comprehensive record of all contracts and change orders related to E-SPLOST IV and E-SPLOST V
expenses, we noted 3 of the 17 projects with overspend had evidence of change orders to support approval
of the additional expenses:
Total of Contracts
Project Expensed Amount and Change Difference
Orders
108. Eldridge Miller ES ‐ ADA $777,416 $1,107,561 $330,145
314. International Student Center $624,641 $767,208 $142,567
519. Portable Classrooms $589,843 $592,645 $2,802
While the projects above were over the approved initial budget assigned to the project, the total spend of
the E-SPLOST IV and V funds did not exceed the approved fund budget of $636.9M for E-SPLOST IV and
$630.3M for E-SPLOST V.
Upon reviewing the status of projects and the current amount paid to date in the Monthly Status Reports
and comparing them with the expense ledger for E-SPLOST IV and E-SPLOST V expenses, it has been
observed that while the ledger generally concurs with the status and current expenses reported in the
monthly reports, discrepancies were identified. Specifically, there were projects that incurred expenses
during a month yet were not listed in the respective Monthly Status Report, and there are also instances
where expenses attributed to projects are not accurately captured in the current expenses paid to date.
A total of $45.2M was recorded in CrossPointe as expenses throughout 2017, however, these expenses
were absent from the Monthly Status Reports until January 2018. This oversight challenges the
transparency expected by stakeholders, given the program's approval by voters in May 2016.
Furthermore, there were discrepancies in project expenditure reporting for E-SPLOST IV project 412. In
December 2016, $446,806 was expensed to date, but only $219,320 was reported. Although the correct
amount of expenses paid to date was initially reported in November 2016, it was errantly reduced in
subsequent reports and was not corrected until May 2017.
These discrepancies indicate that the Monthly Status Reports do not fully reflect the actual financial
activities, indicating a need for a more thorough reconciliation process to ensure accuracy and
transparency in financial reporting. Additionally, we noted only 5 of the Monthly Status Reports
between fiscal years 2019 and 2023 are accessible to the public on the District’s C.I.P. website, therefore
limiting the transparency of the program to the community.
Our team performed an analysis of the physical technology purchases. In our analysis, we compared the
unit prices of physical technology purchases made by the District against the prevailing market rates.
The review showed that the items were acquired with either neutral or favorable terms when compared
with the market rates for the same item.
Recommendation #10
Industry best practice is to maintain a detailed accounting ledger by project, with the supporting
documentation behind it, in an organized fashion. This provides the opportunity to not only re-trace the
project from inception to completion but also allow trends or anomalies to be detected and acted upon.
The District should implement procedures to ensure changes to project budgets are captured to allow
continuous monitoring of project spending to the approved project budget. Additionally, the District
should ensure the comprehensive contract management system that is being implemented in Tyler
29
Technologies Munis system identifies all contracts and change orders related to E-SPLOST expenditures
so the District is aware of its financial obligations, timelines, and deliverables. The District should also
implement a more thorough expense reconciliation process to ensure the monthly reporting of project
status and expenses to date is complete and accurate for full transparency to District stakeholders.
Finally, the District should implement a periodic internal audit of the contracts and change orders to
ensure proper approval is obtained.
Suggested timeframe for implementation: Q2 FY 2025
DCSD Response: Management agrees with the Auditor’s recommendation.
DCSD Management has already leveraged Munis’ contract management system and project ledger to
maintain a detailed accounting ledger by project, with the supporting documentation behind it, in an
organized fashion. This will allow for a more thorough expense reconciliation process to ensure the
monthly reporting of project status and expense.
Expected Implementation Completion: Q3 FY2025
Finding #11 – Final Inspection Documentation
Observation: The final inspection documents for E-SPLOST IV and E-SPLOST V construction projects
were not maintained to provide them in a timely manner for audit purposes.
Background/Details: In the final stages of a construction project, District and AECOM personnel obtain
and complete the final inspection documents. The final inspection documents include the Substantial
Completion Form, evidence of project completion such as a Certificate of Occupancy or Certificate of
Completion, and Consent to Surety of Final Payment.
The Substantial Completion Form is a critical document that signifies the near completion of the project.
The form lists any incomplete work along with estimated costs to finish those tasks, serving as a formal
acknowledgment between the contractor and the District of the final work to be completed.
Additionally, evidence of Certificate of Occupancy or Certificate of Completion is necessary to
demonstrate that the work has been performed according to the contract specifications, is satisfactory to
the District’s requirements, and that the building is transitioned to the District for its intended use.
Finally, the Consent to Surety of Final Payment is an assurance from the bonding company that they are
aware of and approve the amount of the final payment of the contractor. The document assures the
bonding company that they will fulfill the contractor's obligations if the contractor cannot complete the
payment to any unpaid subcontractors, suppliers, or laborers. This document protects the District’s
financial interests and ensures the project's successful closure.
Together, these documents form a comprehensive close-out process, intending to safeguard the
District’s investment and confirm the integrity and completion of the construction project.
Audit Approach
We began our approach by identifying the E-SPLOST IV and V construction projects that were completed
based on the listing of all projects provided to us by District personnel. 114 projects were identified for E-
SPLOST IV and 8 projects were identified for E-SPLOST V.
Our team utilized the following testing steps during our review of the transactions.
30
Test Step Procedure
#1 Ensure the project scope approved by the Board agrees to the scope on the Substantial Completion
Form
#2 Ensure the Substantial Completion Form was fully executed
#3 Ensure any work that was incomplete at the time of the Substantial Completion Form was estimated
on the form
#4 Ensure there was evidence of project completion, such as a Certificate of Occupancy or Certificate of
Completion, and was approved by an appropriate individual
#5 Ensure a Consent to Surety of Final Payment was issued and approved
We noted of the 122 completed E-SPLOST IV and V construction projects, full support of the 3 requested
documents (Substantial Completion Form, Certificate of Occupancy/Completion, and Consent to Surety
of Final Payment) was able to be provided for 28 projects, all within E-SPLOST IV. The remaining
documentation was not able to be provided by District personnel in a timely manner, therefore, we could
not conclude if the documentation was completed and furnished to relevant parties.
Recommendation #11
Industry best practice is to establish a close-out checklist, with a final review of the checklist and
supporting documentation (and the storage of this documentation) performed by those charged with
management of the capital program.
The District should establish a systemic approach to maintaining the crucial closeout documentation for
complete projects. The documentation should be easily accessible to individuals with appropriate roles
and responsibilities. Additionally, implementing a periodic internal audit of the Final Inspection
Documents ensures the documentation meets the requirements and is ready for external consideration.
Suggested timeframe for implementation: Q2 FY 2025
DCSD Response: Management agrees with the Auditor’s recommendation.
DCSD Management will leverage the document retention capabilities of Munis, the current Records
Digitation project, and the implementation of a District-wide document retention schedule and policy to
ensure that all relevant documentation, including Final Inspection Documentation, are available for any
future Financial or Legal audit, assessment, or review.
Expected Implementation Completion: Q3 FY2025
31
Responses to questions fielded from Board Members and Community Advisors:
Throughout our engagement, multiple questions were asked by DCSD Board Members and E-SPLOST
Citizen Oversight Committee Members. Those questions and the responses are below:
Question # Question Asked By Question Plante Moran Response
Question Board Member The BOE initiated this Our team reconciled the Board-approved
#1 Hill audit because they projects to actual reported expenditures
wanted to confirm: Is on E-SPLOST IV and E-SPLOST V
what the BOE approved projects. Additionally, we met with the E-
what actually SPLOST Program Manager (AECOM) to
happened? review current processes and procedures
relative to contracts, pay applications, and
reporting. From our observations, it
appears that DCSD received the $999M in
capital improvements between E-SPLOST
IV and V and was reported to the DCSD
Administration on a monthly basis from
AECOM.
Question Board Member Does any of your work PM reviewed design and construction
#2 Hill help explain why E- schedules with AECOM for E-SPLOST V
SPLOST V is and confirmed the Capital Improvement in
approximately 50% Process (CIP) amounts. E-SPLOST V
expended even though expenditures were slowed between 2019
we are well into the and 2022 due to the realignment of DCSD
collection of E-SPLOST priorities as well as the impact from
VI? COVID. To date, E-SPLOST V projects in
process total approximately $85M to $95M,
which equates to a E-SPLOST V
expenditure of 75% at this time. An
analysis of E-SPLOST VI projects and
expenditures is outside the scope of our
engagement.
Question Board Member Do you have concerns While we noted significant issues with
#3 Hill that the issues exist in regard to governance and oversight in E-
E-SPLOST VI? SPLOST IV and E-SPLOST V, we are
encouraged by the District's commitment
to remediation through the Miracles
program. We trust the District in their
remediation efforts, however, these
actions should be validated and regularly
monitored through routine internal
audits.
Question Board Member Does it concern you that Yes, due to the fact the District was unable
#4 Hill E-SPLOST reporting is to produce a detailed ledger of expenses
not timely or accurate? and the related support.
32
Question # Question Asked By Question Plante Moran Response
Question Board Member Have you ever Yes, but not to this extent. These are
#5 Hill experienced this in serious deficiencies over governance and
other districts? Maybe a oversight of taxpayer funds. The lack of
better way to ask the key controls over the E-SPLOST program
question is on a scale of gives rise to the seriousness of our
1-10, how “serious” findings.
would you consider
these problems? 1, 5, 7?
Question Board Member Do you suspect fraud, We performed an extensive analysis
#6 Hill waste, or abuse? involving analytics and research to narrow
the population from $1B of spend to 23
flagged vendors. We subsequently
performed an exhaustive review of
invoices and emails to understand the
facts and circumstances surrounding the
reasons that led to 16 of the vendors being
flagged, and in our review did not identify
evidence of fraud waste or abuse related to
those vendors. However, there were seven
vendors for which we were unable to make
a determination as to their
appropriateness due to the lack of
information available for review.
Question Board Member Was there any work you Yes, we wish we had the opportunity to
#7 Hill wish you had been able provide real-time remediation and
to perform but it was coaching to District team members. Once
outside of the scope of issues were found, we wish we had been
work? able to develop policies, procedures,
controls, templates, etc., that would
provide District team members with the
skills and tools to remediate the identified
issues. This would then provide a roadmap
for standing up a governance and
monitoring function that allows real-time
reporting to prevent and detect material
deviations from best practices and
policies.
Question E-SPLOST Citizen Do you have a dollar There was $274M in expenses that we were
#8 Oversight value tied to the unable to fully test due to missing
Committee documents that could documentation.
Member Major not be found
Question E-SPLOST Citizen How many transactions There were 1,234 transactions with a value
#9 Oversight were there where no of $22.6M where no documentation was
Committee documentation at all available to test.
Member Allen was available
33
Question # Question Asked By Question Plante Moran Response
Question E-SPLOST Citizen Regarding change Construction change orders were tracked
#10 Oversight orders, were you not in the third-party engineering firm’s
Committee able to find them, or do system. They were supposed to be
Member Major they just not exist? maintained digitally on District drives;
however, our team was unable to locate all
change orders even after requesting
assistance from District personnel.
34
III. Appendix
35
III. Appendix
Plante Moran was engaged to perform a comprehensive audit of E-SPLOST IV and E-SPLOST V in accordance with RFP 23-543 – E-SPLOST
Comprehensive Audit. While the scope of our engagement followed the District’s guidance and at times included items outside of the scope per
the RFP, the District requested answers to the questions below. These answers, our procedures, impediments to our procedures, and any related
findings to the District’s requested answers are noted below:
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
1 Did DCSD spend E-SPLOST Plante Moran will select Plante Moran tested all expenses Due to the District’s lack #7
IV and E-SPLOST V funding a sample of spending for E-SPLOST IV and E-SPLOST V of retained
in accordance with expenses for each project where support was available. documentation, Plante
established rules and and compare spending Where we were not limited by the Moran was not able to
guidelines, including details to the provided availability of documentation to verify that all funds were
standards and practices of established rules test, we reviewed the support to expended in accordance
the DCSD capital program guidelines. compare to established rules and with established rules and
and all local state and guidelines. guidelines, including
federal guidelines. standards and practices
of the DCSD capital
program and all
applicable local state and
federal guidelines.
Documentation support
received indicated
numerous departures
from District policy.
Additionally, the
District’s lack of
documentation retained
for audit prohibited our
36
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
team from auditing the
full extent of funds.
2 Do the expenses match the Plante Moran will obtain Plante Moran inspected the Based on the information #10, #7
established budget for each the total expense documentation available for each provided by the District,
project? Compare “as built” spending amount for expense item to determine their we were able to confirm
vs. “as planned.” each project and perform relevance to the scope of the expenses match the
an actual to budget related project. established budget for
analysis to verify each project to a material
expenses were either Plante Moran reviewed the extent. These financial
under or at the financial reports provided by reports were provided by
established budget AECOM to the District on a AECOM to DCSD on a
provided by DCSD. monthly basis. monthly basis providing
Plante Moran requested and sufficient documentation
Plante Moran will to demonstrate that a
inspect each project reviewed where available, the
project closeout checklists for material portion of the
build expectation as set funds disbursed were in
by DCSD and compare completed projects for E-SPLOST
IV and E-SPLOST V. alignment with the scope
project build of planned projects.
expectations against
Plante Moran reconciled the
project build completion Where documentation
Monthly Status Reports to the
or current status as was available, we noted
reconstructed ledger for expenses
documented in the $23m in expenses, the
through the date of each Monthly
Monthly Status Report nature of the expense was
Status Report.
for the Capital unable to be agreed to the
Improvement Programs scope of the project.
The District did not
maintain completed
closeout documentation
for each project, limiting
our ability to conclude the
District effectively
37
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
monitored “completed”
vs. “planned”.
Not all monthly status
reports were available on
the District’s C.I.P.
website. Projects listed as
“not active” in the
monthly status reports
had costs assigned to
them
3 What did DCSD buy, and Plante Moran will obtain Plante Moran inspected the The District was unable to #7
was spending performed in and inspect each project documentation for every expense provide all requested
compliance with what DCSD contract to verify it for each project where contracts and expense
said it was going to do? This matches the DeKalb documentation was available to support.
includes a review of County Board of compare the nature of the expense
whether the end project (or Education (BOE) to the approved spending plan. Where documentation
work-to date) matches the authorization thresholds was available, we noted
contract; whether the as provided by DCSD. $23m in expenses, the
contract matched the nature of the expense was
DeKalb County Board of Plante Moran will obtain unable to be agreed to the
Education (BOE) and inspect the E- scope of the project.
authorization and whether SPLOST referendum to
the BOE authorization verify the BOE
matches what was stated in authorization stated
the E-SPLOST referendum. matched the referendum
This should include but not provided.
be limited to scope, cost and Plante Moran will obtain
schedule. and inspect the total
expense spending detail
for each project to verify
spending was in
38
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
compliance with the
approved and signed
contract as provided by
DCSD.
4 Have the capital Plante Moran will obtain Plante Moran created a detailed The District was unable to #1-#11
improvement projects the population of capital population of capital improvement furnish a detailed
utilizing E-SPLOST funds improvement projects projects that utilized E-SPLOST population of all capital
been managed according to that have utilized E- funds in the form of a ledger of E- improvement-related
DCSD Board Policy SPLOST funds. SPLOST transactions and tested, expenses utilizing E-
regarding budget allocation, when the documentation was SPLOST funds,
procurement, contract and Plante Moran will verify available, the compliance of the necessitating Plante
change order execution, funds have been expenditures with DCSD Policy Moran’s involvement in
expenditures, and managed according to regarding budget allocation, the creation of the
reporting? the DCSD Board Policy procurement, disbursement, detailed expense ledger.
regarding budget change order management,
allocation, procurement, interim reporting, and financial Exceptions were
contract, and change accounting. identified throughout all
order execution, process areas (budget
expenditures, and allocation, procurement,
reporting. disbursement, change
order management,
interim reporting, and
financial accounting)
leading us to conclude
that projects were not
managed according to
Board Policy.
5 Were tax funds expended Plante Moran will Plante Moran reviewed the For 5,000 expense line #3, #4
efficiently and determine spending contracts the District entered into items, the District was
39
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
economically, so as to efficiency and economic with its vendors, when contracts unable to produce
secure to DCSD the requirements as where available. purchasing
maximum possible benefit established by DCSD and terms/contracts.
from the tax dollars compare those
collected? requirements against tax We observed multiple
fund expenditures to instances of inefficient
verify they meet or spending especially
exceed established relative to soft costs (i.e.
requirements. CM fee discrepancy,
staffing, general
conditions, insurances,
etc.)
6 Were sales tax proceeds Plante Moran will Plante Moran tested all expenses Sales tax proceeds were #7, #8
disbursed in a fiscally determine fiscally for E-SPLOST IV and E-SPLOST V not disbursed in a fiscally
responsible manner? responsible that where support was available responsible manner.
disbursement to be tested. We tested for Plante Moran noted a lack
requirements as compliance with applicable rules, of internal controls
established by DCSD and regulations, policies, and overall within the disbursement
compare sales tax best practices. function of the District.
proceed disbursements Instances of duplicate
for all projects against payments, unsupported
these requirements to payments, and a lack of
verify they meet or justification for expenses
exceed expectations. were found.
7 Were adequate Plante Moran will review Plante Moran established an We noted a significant #8
administrative controls established expected control framework based lack of controls in
established to ensure the administrative controls on applicable rules, regulations, throughout the District’s
proper management of the against best practices to policies, and industry best management of E-SPLOST
determine if adequate practices. We met with District IV and E-SPLOST V funds.
40
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
sales tax proceeds received controls were personnel and AECOM to Controls were either not
by DCSD? established. understand their procedures to in place, or if in place,
execute the stated controls and were not operating to the
Plante Moran will evaluate whether the expected level we would expect for
compare project controls were in place and adhered a $1B capital
spending and to throughout E-SPLOST IV and E- improvement program.
management against SPLOST V.
established
administrative controls
to verify sales tax
proceeds received by
DCSD were properly
managed.
8 Were DCSD’s construction Plante Moran will obtain Plante Moran reviewed several For SPLOST IV and V, N/A
project expenditures and inspect comparable other large education sector DCSD utilized a
comparable to other School metro Atlanta area projects in the metro Atlanta area. Construction Manager at
Districts’ building School District building Risk (CMr) approach with
construction program construction program a guaranteed maximum
expenditures in the metro expenditures and price (GMP) in addition to
Atlanta area? compare those program a “prototype” approach
expenditures to DCSD’s for new construction
construction project projects. The District’s
expenditure to cost per square foot range
determine whether is within expectations for
spending was in line the time period and
with expectations and geographic region.
industry standards.
9 Were DCSD’s technological Plante Moran will obtain We met with DCSD individuals and The District did not N/A
expenditures reasonable and inspect the noted no cost-based analysis was perform a cost-based
41
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
considering the volatile population of DCSD’s performed prior to the initial E- analysis, and a material
market environment for technological SPLOST IV and E-SPLOST V portion of documentation
these products? expenditures and spendings. Plante Moran related to IT purchases
evaluate expenditures performed a cost vs. market was destroyed prior to
for alignment with analysis on the District’s behalf our audit, limiting our
criteria agreed upon ability to review all
between Plante Moran In our analysis we found the technology purchases.
and DCSD, including but district was paying at or below
not limited to: market price for technology Based on the
purchases. Based on the documentation we were
• Number and listing documentation we reviewed we able to review, the
of comparable did not identify outside of District was paying at or
providers of product industry standards related to a below market price for IT
• Inspection of cost- timeline for technology purchases.
expenditure. Due to the District
based analysis
paying at or below market price
performed by DCSD
for their purchases, we deemed
prior to expenditure
further investigation of
• Timeline alternative providers low risk.
requirement for
technological
expenditure based on
type and need of
product
10 Has the investment of the Plante Moran will Plante Moran established an Plante Moran noted the #1-#11
sales tax proceeds received evaluate applicable expected control framework based District lacked internal
by DCSD been conducted in investment activity for upon applicable rules, regulations, control over the
a sound fiscal manner? alignment with DCSD policies, and industry best management of sales tax
investment policy. We practices. We met with District proceeds, characterized
will provide DCSD with a personnel and AECOM to by instances of
report summarizing understand their procedures to unfavorable contracts,
42
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
investment allocation execute the stated controls and significant lack of
and detail transactions evaluate whether the expected controls, unauthorized
that were executed in a controls were in place and adhered document destruction,
fashion inconsistent to throughout E-SPLOST IV and E- and lack of internal
with DCSD investment SPLOST V. communication within
policy. the District
11 Is the public reporting of E- Plante Moran will obtain Plante Moran was required to It is our understanding #2
SPLOST funds accurate and the population of public invest a significant amount of that the District created
complete? reported E-SPLOST time to reconstruct an itemized Weekly Budget
funding and compare ledger which reconciled Reports/Budget & Spend
this funding against to/comprised the monthly reports Reports, which were used
receipt of E-SPLOST provided to the public to create a monthly
amounts to verify public report to the public called
reporting of funds are “Financial Report for the
accurate and complete. E-SPLOST Capital
Improvement Program”.
We leveraged these
reports to identify the
total spend for -ESPLOST
projects. However, when
trying to obtain an
itemized listing of the
individual expenses with
vendor-level detail that
comprise this ledger, the
District was unable to
produce such information
(ex. General ledger
transactions were posted
as journal entries without
43
No. RFP Requirement RFP Response Procedures Impediments and Finding
Conclusion No.
vendor information,
especially as batches were
used to convert data from
Cross Point to Munis).
In addition, we are unable
to validate the accuracy of
the transaction detail
given the significant
number of
missing/destroyed
documents.
44