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Audit: SFUSD's parcel-tax oversight finds $9 million restricted but prompts union questions over indirect costs
Summary
The Quality Teacher & Education Act oversight committee reported a clean agreed-upon-procedures audit and recommended designating a roughly $9 million fund balance as restricted for QTEA purposes. United Educators of San Francisco raised concerns about nearly $1 million in direct/indirect costs and transparency around MOU language governing excess revenues.
The San Francisco Unified School District's Quality Teacher & Education Act (QTEA/QTA) Oversight Committee reported to the Board of Education on April 28 that auditors found no expenditures inconsistent with the 2008 ballot language and that the fund ended FY2014 with about $9 million in restricted balance.
Franco Cirelli, chair of the oversight committee, said the panel's role is to "inform the public concerning the expenditure of parcel tax revenues" and to ensure those proceeds are spent as voters intended. Auditor Nathan Edelman of Vevrenic Trine Day and Company summarized the financial results: the district began the year with roughly $6.5 million, recorded about $33.6 million in expenditures for the fiscal year, and closed with a fund balance near $9 million. "We did not identify expenditure transactions inconsistent with the QTEA act of 2008," Edelman said, describing the engagement as a clean agreed-upon-procedures report.
But union speakers pressed the board for more detail on how indirect costs are charged. Susan Solomon of United Educators of San Francisco said the district reported nearly $1 million in indirect costs in 2013-14 and called for clearer accounting: "We are concerned that QTEA not be charged for illegitimate costs ... it shouldn't be used as a cash cow for other expenses that are generically called indirect costs," Solomon told the board.
Committee members and staff said the oversight committee had moved to designate the $9 million fund balance as restricted for QTEA purposes and that UESF and the district were discussing the MOU language from 2008 that governs how excess revenues may be used going forward. Board members asked staff to provide further breakdowns for several line items (members requested a report detailing how about $980,000 labeled "innovation research and development" was spent and the portion allocated to iLab/innovation labs).
The oversight committee and auditors will follow up with more detailed line-item reporting and the board requested staff brief the full board as negotiations between the district and UESF continue.
