School credit card spending needs look
Five months after the Indian River County School Board approved opening a $7 million credit card account to be used for certain purchases, an investigation by Vero Beach 32963 has discovered that financial safeguards put in place to monitor School District spending are not being followed.
Even more alarming, the School District appears to be using the credit cards to circumvent spending limits for individual vendors. In the case of at least one vendor, use of the card appears designed to hide mold problems in schools from the School Board.
As a first line of defense against unauthorized purchases, the School Board is supposed to get “transaction information electronically from . . . [Regions Bank, issuer of the card] through its Procurement Card Management System on a daily basis,” according to the 18-page policy governing use of the card.
But School Board members Charles Searcy and Shawn Frost said that although millions of dollars have been charged to the card and the board is responsible for the money being spent, they haven’t seen a single bank statement detailing card expenditures,
“That issue is being raised with the superintendent,” Board Member Charles Searcy said. “I get mixed answers and am told, ‘You don’t understand.’” Searcy has asked Superintendent Mark Rendell to hold a workshop on the procurement card policies “so old and new board members better understand how it works.”
Besides the lack of reporting, district staff appear to have violated board-approved policy in at least two other ways.
First, someone on the staff appears to have gotten the bank to increase the School District’s credit line to $8 million by issuing two different cards, each with a credit line of $4 million.
Second, the School District has used the cards to greatly exceed spending limits for individual vendors.
Vendors who provide ongoing goods or services to the School District that cost more than $50,000 a year are put under contract for a specific yearly amount that is not supposed to be exceeded without School Board approval. But in at least one instance, a vendor has received way more than the contract limit via credit card payments.
The case in point is EE&G Environmental Services, which performs mold and asbestos remediation and testing.
The School Board approved a $150,000 contract with EE&G for the 2016-2017 fiscal year, and the quarterly report on recurring vendors from July 1 to Oct. 1 states nearly $48,000 was spent with the company.
But credit card payments to EE&G over the same period total nearly $413,000. An anonymous source at the district said Superintendent Mark Rendell and Chief Financial Officer Carter Morrison approved the card purchases to hide mold remediation charges from the School Board.
The existence of a mold problem has been repeatedly denied by Rendell and other top district officials, even though Maureen Weisberg, a union representative for school janitors, has relayed complaints to the board that mold and mildew are forming in schools. Weisberg says district employees are forbidden to use the term “mold” in maintenance requests, making denial of the problem complete.
EE&G invoices obtained by 32963 show credit card charges for “carpet removal-abatement” done at seven unnamed schools in July. Also in July, “mold remediation services” were performed at the Rosewood Magnet School library, according to invoices.
“Black particulate remediation” was done at Sebastian River Middle School media center in August and “Remediation services and PRV” were done at Dodgertown Elementary room 306 in October.
“Micro-cleaning and PRV” was done at Sebastian River High School in November. Weisberg, who is head custodian at Sebastian River High School, said the band room was so damp over the summer all the band uniforms were mildewed and all band equipment was moved to another location.
From July through the end of October, $2.86 million in purchases have been paid for by credit card with at least two board members never having seen a single credit card statement.