School districts and charter schools were put on notice this week: Be ready for an audit of how you handle donations, fundraising and advertising for sports, clubs and other activities.
And not only that.
The Utah State Auditor also will keep an eye on how well schools follow laws designed to ensure that no employee steers business to family or friends or gets kickbacks for contracting with a particular vendor for computers, math books or even construction of a new school building.
The auditor's office said it alerted all districts and charter schools that they can expect audits beginning in September 2014, one year after the deadline for implementing policies to meet a new Board of Education rule. A revised state law on purchasing also took effect last spring, and schools' compliance with that also will be scrutinized.
Following embarrassing revelations last year that led to the resignation of Timpview High School's head football coach and an overhaul of the way sports booster donations were handled at Cottonwood High, the board passed its Fiscal Policies and Accountability rule in January.
On Friday, the board will tweak the rule to exclude noncurricular clubs from the requirement that money donated or raised be considered public money and, therefore, meticulously tracked as it is spent. Nearly all sports, booster clubs and activities are covered by the rule, but clubs not sponsored by schools would be exempt.
The auditor's announcement was intended to inform voters who will soon cast ballots in school board elections, said Nicole Toomey Davis, public information officer for the auditor's office.
Local school board members, as well as school employees, have responsibilities to ensure the rules and laws are followed, she said.
Taxpayers "spend a ton of money on education, and we're watching," Toomey Davis said.
Audits at four high schools last fall by the state auditor found confusion over money, missing funds and inadequate tracking of public dollars.
The worst problems were at Granite District's Cottonwood High, where public funds were improperly kept by booster clubs and athletic construction projects were managed by a donor.
That limited glimpse showed that schools throughout Utah likely have loose reins on money flowing in via fundraising, donations, advertising, sponsorship and booster club activities, the state auditor told the state board.
The board's new rule requires that districts and charter schools keep at arm's length those activities that are not school-sponsored, such as a sports clinic that simply uses a school gym. Any money from those should not be mingled with public money, such as donations to a booster club, the rule says.
Schools need to annually review fundraising that supports clubs, sports, classes or programs to ensure it is school-sponsored, according to the rule. Parents, students and the public must be able to look at the detailed records of contributions and expenditures, the rule says.
Natalie Grange, internal auditor for the state board, said that most districts already had policies, but many were not as robust as they need to be. The board has provided training and model policies for the districts, but each district is writing its own, she said.
Granite School District began revising its policies when the Cottonwood High problems first became evident, said spokesman Ben Horsley. The final version was approved by the Granite board this spring.
The district will continue to train principals, coaches and others on the new rules, but, he said, "A policy is only good if people follow it." The policies "give us the latitude to take disciplinary action," he said.
Last year's audits were not the first to show need for improvement in how school districts handle public money.
A 2008 legislative audit of 21 school districts found that nine of them needed to foster more competition in their bidding for architectural and construction services. Often, school boards simply go with an architect or construction firm with whom they have rapport, the audit found.
At the same time the education board was revising its rule, the Legislature was revising the Utah's massive law on procurement, which guides how state and other political bodies buy goods and services.
The law had not been updated since 1979 and is being modernized in steps that will take several years.
One change enacted last session, though, targets a problem that arose at Timpview High, where former coach Louis Wong resigned in the wake of allegations of fiscal irresponsibility and policy violations. The state board later suspended his teaching license for 18 months.
Among the accusations was that Wong split the bid for a larger expenditure into several smaller bids to circumvent a district approval process. Under the Legislature's revision last winter, doing that could expose a public employee to criminal prosecution.