Schild: Scottsdale Schools issues reflect symptom of questionable Arizona procurement law

Although i applaud Jann-Michael Greenburg’s observation that the Scottsdale Unified School District needs tighter financial controls, he fails to see the big picture. Even if one board makes changes to the district’s internal financial controls, those changes can easily be ignored or discarded by subsequent boards.

Christine Schild

When I joined the Scottsdale school board in 2003, it was with the same commitment to ensure the district had tighter financial controls and the board was more proactive in its oversight of the finances.

I demanded monthly budgets to actual reports with spending variances, reviewed every document associated with the bond and the expenditure of bond funds, hired an internal auditor and an attorney, obtained procurement training for the board, and read and reviewed the paperwork on almost every single agenda item.

The board continued those policies and procedures for two years after I left the board. By the time I had been gone four years, the auditor had been fired and the board was no longer insisting the superintendent provide them with the same level of documentation my board received.

In 2015, I personally observed the board engage in questionable procurement activities. They didn’t seem to understand what restricted funds could be used for. They didn’t understand that board members are not supposed to engage in procurement activities before the public bidding process begins.

I challenged the board to avoid the appearance of impropriety. The district finally hired Susan Segal to advise them against moving forward.

As we discovered between 1998 and today, change at the local level may fix the problem in the short term, but will not fix it permanently. That’s because the real problem is the law that allows school districts to use a “no-bid” process to acquire construction services as long as those services are acquired through a “nonprofit” purchasing cooperative.

Arizona law allows for the incorporation of non-tax-exempt, nonprofit corporations. Several school purchasing cooperatives are owned by private individuals who act as middlemen between contractors and school districts, skimming a percentage off the top as their commission. These owners create a list of contractors and the school districts pick whomever they want off that list without using a public procurement process.

It should come as no surprise that those contractors are the ones who contribute to political action committees that run school bond campaigns, such as Scottsdale’s Yes to Children effort. It should also come as no surprise that these same contractors sponsor almost every business outing, luncheon, and conference attended by school administrators.

These purchasing cooperatives and their chosen contractors do not want the law changed. Instead, they work to elect board members who lack the knowledge to understand what is going on behind the scenes or are known to trust without verifying.

They invest in state legislators that can prevent changes to the law. When the community elects board members that insist on tighter financial controls, they work to push those individuals out of office.

It is beyond the reach of one board or board member to adopt a longterm policy that prevents the cycle from repeating itself. Meaningful change can only occur at the state level. The procurement laws need to be amended to prevent school districts from using a no bid process for construction projects.

Editor’s note: Ms. Schild is a Scottsdale resident and served on the Scottsdale school board from 2003 to 2006.

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