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YELLOW SHEET Office of the State Auditor of Missouri |
September 6, 2001
Report No. 2001-81
During the 2000-2001 school year, the Kansas City 33 School District
(district) reported a significant number of textbooks and related supplemental
materials that were not delivered to the district�s schools in a timely
manner.� To address this issue and other
issues surrounding textbook procurement and management, the district�s
superintendent requested the State Auditor to conduct an audit of the textbook
procurement system.� On February 6,
2001, the district�s Board of Directors approved the State Auditor�s proposal
to perform this audit.
In November 1997, the district began working on budget cutbacks in
anticipation of the end of state desegregation payments.� These cutbacks were included in the budget
for the year ended June 30, 1999, which was approved in June 1998 by the school
Board of Directors and the district�s Desegregation Monitoring Committee.� One of these cutbacks was to close the
district�s textbook depository warehouse in December 1998 and lay off the seven
employees who ran the depository and oversaw the distribution of textbooks to
district schools.� The district had $1.5
million in textbooks in the warehouse and needed to make a decision on what to
do with this inventory and how to distribute books to the schools.� In July 1998, the district�s Textbook
Coordinator resigned and the responsibility of overseeing textbook procurement
and distribution was given to the district�s Library Services Coordinator in
addition to her other duties.� This
individual indicated that she had no experience or training in textbook
procurement and management, and was provided little, if any, formal guidance or
job expectations regarding her new duties.
In May 1999, the district contracted with Follett Educational Services
(FES), a used textbook vendor, to provide textbook procurement, warehousing,
and inventory management.� The district
has paid this vendor a total of $1.1 million for textbook purchases and related
fees through March 2001.� The provisions
of the contract included transfer of the district�s entire textbook inventory
to FES�s warehouse in Chicago, Illinois.�
Prior to contracting with FES, the district did not solicit proposals
from other vendors, and the district did not fully evaluate the costs and
benefits of other alternatives for textbook warehousing and management.� In addition, the district did not adequately
monitor the terms of the contract with FES, and FES overcharged the district approximately
$32,000 in fulfillment fees and $141,000 in freight costs.
Budgeting and accounting concerns appear to have been the principal
cause for the delay in ordering and receiving certain textbooks for the
2000-2001 school year.� The majority of
the district�s textbooks were initially ordered on a timely basis; however,
system errors and inadequacies caused a perceived shortage of budgeted funds
which caused the cancellation of certain textbook orders.� For example, the accounting system showed a
textbook budget deficit of approximately $990,000 at September 26, 2000, while
the system should have showed a budget balance of approximately $1.2
million.�� Although system errors were a
major problem, it appears the lack of budget monitoring and oversight allowed
the budget system errors to go undetected.
The perceived budget shortfall appears to have caused the postponement
of textbook orders from FES totaling $643,000.�
These orders were initially placed prior to July 1, 2000, but were
postponed until October 2000, which appears to have contributed to the shortage
of textbooks at some schools.� Of the
$643,000 in postponed orders, approximately two-thirds of this amount
($439,000) was for adopted textbooks, and approximately one-third ($204,000)
was for non-adopted textbooks and supplemental materials.
The lack of a district-wide inventory system apparently contributed to
the untimely shipment of textbooks to some schools.� In one instance, an elementary school was closed in May 2000, and
its students were transferred to another school at the start of the next school
year.� The textbooks at the closed
school were to be transferred to the other school; however, these books were
picked up by FES and put in the district�s inventory in Chicago, and these
books were not shipped back to the school until December 2000.� It appears an adequate district-wide
textbook inventory system could have helped prevent this from happening.
As of November 2000, the duties of overseeing textbook procurement and management were reassigned and the district established a committee to develop new policies and procedures for textbook procurement and management.� The district�s textbook committee is considering implementing an individual school site-based textbook procurement and inventory system (as opposed to a central warehouse and inventory system).� If implemented, this will place a significant amount of responsibility on the school textbook coordinators.� Therefore, it is imperative that the district develop written policies and procedures, written job descriptions and duties, and provide adequate training for the school textbook coordinators.
