Collaboration in Civic Spheres

State audit: Seattle Schools facility rentals program in disarray

by Matt Rosenberg June 25th, 2013

A new report from Washington State Auditor Troy Kelley suggests the Seattle Public Schools have left uncollected potentially several million dollars of revenues for facility rentals and related costs in recent years, much of it since last September. In addition to 9,000 hours of un-billed rentals, the district is also failing to monitor and collect on past due bills it has issued for facilities rentals; has disguised outside rentals as internal events, causing more revenue loss; has failed to follow insurance documentation requirements for outside events; and hasn’t trained many staff as needed on a new rentals record-keeping system.

According to the new accountability audit, the district failed to collect rental fees for about 9,000 hours worth of use of its facilities by outside at 2,432 special events on premises from last September through this April. District rental rates vary from $8.00 per hour to $88.90 per hour. Additional hourly fees are often charged for utilities, cleaning and security, ranging from $47 to $73.85. Combined rates thus could range from $56 per hour at the low end to as high as $162.75 per hour at the high end. The report says the amount of lost revenue can’t be quantified but that auditors believe it is “substantial.”

If all of the roughly 9,000 un-billed hours hours were charged at the minimum combined rental and services rate the revenue would have been $504,000; if all were billed at the highest combined rental and services rate – something that is unlikely – the recovered revenues would have been $1.46 million.

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In addition the audit reports that the school district estimates it has left another $400,000 to $820,000 uncollected from the City of Seattle Parks and Recreation Department in shared 2006-2011 revenues related to adult usage of facilities and lighting fees. The school district failed to invoice Parks and lacks supporting documentation so cannot recover the monies it believes it is due.

The audit also says that of $223,213 in rental fees charged in from last September through this April, $102,913 remains uncollected and those payments are an average of 115 days overdue. The report adds, “The rentals office is not monitoring these past due accounts, nor is it sending delinquent accounts to collections.” Any additional past due amounts before last September can’t be calculated due to lack of records, the audit says.

In three cases, district staff disguised outside events as internal and lost $45,000 in the process, the audit also finds. Further, rentals overseers aren’t documenting insurance and concussion policy compliance, which could increase liability upon a death during an outside event, the audit states. A third of schools tested in the audit were’t using the district’s new online system for scheduling outside events.

The audit recommends the Seattle School District train staff to follow facilities usage guidelines; train staff who are assigned to do scheduling and event approvals in the new online system; follow-up on past due bills; and reconcile shared revenues from Parks with its own calculations of its share.

In a response in the audit the District says it concurs with the findings and will take the recommended corrective steps.


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