This audit report is the ninth in a series of reports to be issued on audits conducted pursuant to Chapter 2001-253, Laws of Florida, Specific Appropriation 118; Chapter 2002-394, Laws of Florida, Specific Appropriation 105; Chapter 2003-397, Laws of Florida, Specific Appropriation 59; and Section 11.45, Florida Statutes.

This operational audit focused on Miami-Dade District School Board’s operating units, programs, activities, functions, and classes of transactions related to capital construction funding. For each of these areas, our audit primarily included examinations of transactions, as well as events and conditions, occurring during the period July 1, 2002, through June 30, 2003, and selected actions taken through May 2004. Financial information for the prior fiscal year is included for comparison purposes.

Finding No. 1: Reports periodically prepared for the Board and management’s review did not provide sufficient information for effectively monitoring the status of individual construction projects and the effects of individual projects on the overall capital construction program. Providing budgeted and actual information based on existing and planned projects would enhance the ability of the Board, management, and other stakeholders to assess the effectiveness and efficiency of the capital construction program.

Finding No. 2: Our review of the District’s capital projects tracking procedures noted that project numbers were not consistently assigned to capital construction transactions. We noted that capital projects were identified with program numbers; however, each program number could have several specific projects associated with it. The inaccurate identification of capital construction transactions by project and program hinders the District’s ability to capture and report capital outlay expenditures accurately.

Finding No. 3: The District has initiated staff reductions and the implementation of an automated time accounting system as directed by the Board, based on recommendations from an outside consultant. The District plans to use the automated system to determine the construction department’s efficiency and the achievement of goals recommended by the outside consultant. However, we noted that the design of the automated system does not include budget information for certain significant work categories that may be used to further the recommended goals. In addition, the compiled information will not be used to determine the reasonableness of salary cost allocations to the capital construction projects.

Finding No. 4: The District submitted a facilities work program to the State Office of Educational Facilities in September 2003 that included facilities needs for five years (i.e., 2003‑04 through 2007-08), but did not include information for the 10-year and 20-year periods, as prescribed by Section 1013.35, Florida Statutes. An amended facilities work program submitted in March 2004 did not provide additional information for the 10-year and 20-year periods. In addition, our review of the District’s facilities work programs for 2002-03 and 2003-04 fiscal years noted that the amounts reported in the facilities work programs for the first year did not agree with the adopted annual capital outlay budget for the corresponding fiscal year, contrary to the requirements in Section 1013.35, Florida Statutes.

Finding No. 5: Our review of 30 construction projects, with adjusted contract amounts totaling approximately $173 million, noted delays in the completion of the projects and costs in excess of the original project budgets. The delays in the time required to complete 25 of the projects ranged from 47 to 1,057 days, with an average of 284 days. The costs in excess of the original project budgets ranged from $30,846 to $3,096,447, with an average of $411,689 for 18 of the projects.

Finding No. 6: Our analyses of the District’s efficiency in utilizing funds available for capital construction for the three-year period of 2000-01 through 2002-03 show that the District’s utilization of capital construction funding sources is not matching its capital construction plans. The District’s average actual expenditures and transfers out over the three fiscal years were 37 percent of its average budgeted expenditures and transfers out.

Finding No. 7: Our review of 23 capital construction projects active as of March 26, 2004, noted that the timing between the receipt and expenditure of funds allocated to 15 of the selected projects were reasonable. The remaining 8 projects were funded with Qualified Zone Academy Bonds (QZABs) and had a significant part of their allocations unexpended. The time elapsed between the initial allocation of QZAB funds and March 26, 2004, ranged from 2.47 to 3.62 years and the percentages of unexpended allocation ranged from 71.5 percent to 98.9 percent. Since QZABs are debt issued to fund specific renovations and remodeling projects, the proceeds should be expended in a relative short time.

The Superintendent's written response to the audit findings can be viewed in its entirety on the Auditor General's web site.