JEFFERSON CITY, Mo. — A new report released by State Auditor Scott Fitzpatrick reveals how the cost of a new high school in the Francis Howell R-III School District went from $86 million to a final cost of more than $164 million.
The audit report gives the school district the lowest possible rating of "poor" and identifies several issues with the management of projects financed by Proposition S, as well as other aspects of how the district is run.
"We responded to public calls for a state audit with the goal of giving taxpayers a better understanding of what happened with the construction of the new high school and with the goal of providing district officials recommendations to ensure these types of mistakes aren't repeated," said Auditor Fitzpatrick in a press release.
It was also discovered there was a:
- A lack of transparency
- A failure to communicate
- A flawed project manager selection process
"(Those discoveries) led to the Board of Education and taxpayers being shocked when the actual cost of the new school was revealed. Because of these cost overruns, 71 originally-planned projects, totaling more than $56 million, for schools across the district will not be completed. This lack of transparency violated the trust of the people and created serious doubts about the district's ability to manage projects of this scale in the future."
The district's new leadership is already working to address the audit findings and put our recommendations into place as they try to restore the public's confidence in the district.
In looking at the process the district used to finance projects funded by Proposition S, the audit found district officials were not transparent with the Board of Education or the public about construction cost estimates for the new high school.
The report notes the marketing materials for Proposition S estimated the cost of the new school at $86.35 million, even though no one associated with the project can explain the origin of this estimate.
While estimated costs for the project rose over the $100 million mark by February 2021, these new estimates were not presented to the Board until November of that year when a new cost estimate of $164.7 million was provided.
The report states the district and its construction manager attributed the higher than expected price to insufficient original estimates that did not take into account:
- Annual inflationary increases
- Increased square footage and project scope
- Unprecedented materials cost increases associated with the COVID-19 pandemic
The audit compared the costs of the new building to another school building project completed in 2022 and found the costs were within $30 per square foot.
The audit also found that while district officials were not transparent with the Board or the public, the Board failed to take steps to ensure cost updates on projects were provided and, as a result, made decisions with insufficient knowledge or understanding of their financial impact. Additionally, one Board member was on the design teams for the Proposition S projects and was aware of the updated cost estimates but did not provide that information to the rest of the Board.
This lack of awareness of the increased cost of the project also led to the Board approving four bid packages for a total of $38 million prior to knowing the total project cost. Because of the inaccurate cost estimates and increased costs of the new high school and other projects, district officials have now identified 71 originally-planned Proposition S projects, totaling at least $56.18 million, that will not be completed. The district determined 49 of these projects, including interior and exterior renovations at other schools to roof replacements and heating, ventilation, and air conditioning updates, would require additional funding or further evaluation.
Another major finding in the report outlines how district officials failed to use a competitive and transparent process to select key personnel for the planning and oversight of the Proposition S projects. District officials insisted the project management firm selected must hire a former district employee as project manager.
Originally, district officials recommended that the Board select the highest scoring firm but, the day before the Board voted, the recommendation document was altered to instead recommend the lowest scoring firm with no additional information to explain why the firm was now a better candidate. The audit notes the former employee the district wanted hired worked for this firm and the firm was owned by his brother. At a minimum, the awarding of this contract gives the appearance of bias towards a former employee and his brother's firm and a potential conflict of interest.
Other findings include:
- A failure to perform safety drills in accordance with policy
- Overstated student attendance that led to the district receiving $11,500 in excess state funding
- Insufficient guidance to schools on how to handle receipts and inconsistent cash handling procedures
- Lacking payroll controls and procedures
- Insufficient guidance to building officials on how to track school property
The complete report for the Francis Howell R-III School District can be found here.
