Audit Committee - RCPS

Minutes of the Roanoke City School Board Audit Committee June 15, 2017 Audit Committee Members: Bill Hopkins, Committee Chair - Present Laura Rottenborn, Committee Member - Present Others Present: Steve Barnett, Deputy Superintendent for Operations Kathleen Jackson, Chief Financial Officer Donna Caldwell, Director of Accounting Timothy Spencer, School Board Attorney (joined at 10:45 AM) Jacque Banks, Director of Special Education Stan Crowgey, Director of Transportation Justin McLeod, Community Relations Coordinator Drew Harmon, Municipal Auditor, City of Roanoke Cari Spichek, Senior Auditor, City of Roanoke WSLS Reporter and Cameraman 1. Call to Order Mr. Hopkins called the meeting to order at approximately 10:30 AM. 2. Audit Report – Special Education Mr. Hopkins opened the meeting up for questions. He considered the report to be favorable overall, noting that all but five (5) of the 16 consultants recommendations had been implemented. Ms. Banks stated that the remaining recommendations were under review to determine whether or not to implement them. A follow up audit report will be brought to a future audit committee meeting to update members on how the remaining recommendations are ultimately addressed. Mr. Hopkins asked for any further questions. Hearing none, the report was received and filed. 3. Audit Plan - FY-18 Mr. Hopkins noted that the committee had reviewed the risk assessment at an earlier meeting and that the plan is consistent with that assessment. He asked if there were any questions or comments on the audit plan. Hearing none, the plan was approved as presented. 4. Audit Report - Transportation Mr. Hopkins noted there were several factors used to compare costs with other school divisions and that cost per mile seemed to be the most important one. Mr. Harmon agreed that cost per operating mile was the most important measure as it provides a bottom line number unaffected by variables such as the number of students, the square miles covered, and the number of trips provided. Page 1 of 3 Audit Committee Minutes March 23, 2017 Mr. Hopkins referred to the “Management Comments” section of the report (page 25) and asked if the Division’s cost per mile appears high due to having understated its mileage. Mr. Barnett confirmed that management believes total miles may have been understated. Mr. Barnett noted that Transportation has begun using the GPS system on the buses to track mileage. In response to the Committee’s questions about GPS, Mr. Crowgey stated that the Division had not received mileage reports in the past. A new GPS system was implemented in January 2017 and is in an experimental stage. He plans to begin reviewing the mileage numbers in greater detail starting on July 1. Mr. Barnett commented that the Division’s bus fleet may be traveling as many as 2 million miles per year based on early GPS data, if the trends hold. Ms. Rottenborn asked how the GPS data is reported to Mr. Crowgey. Mr. Crowgey responded that Mountain Valley Transportation submits a report to him. Ms. Rottenborn asked if the mileage is reported in the aggregate or if it’s broken down by bus. Mr. Crowgey responded that only total miles per day have been reported, but the system can report mileage by bus. Ms. Rottenborn asked who makes the decision to increase the average age of the fleet to 14 years, and ultimately to 15 years if appropriate. Mr. Barnett stated the decision rests with the administration and that it would be based on a review of the maintenance records, mileage, and condition of the bus. Ms. Rottenborn asked if Mountain Valley Transportation would be making recommendations regarding the age of the bus fleet, to which Mr. Barnett responded yes. Ms. Jackson noted that the administration will have to work with Mountain Valley Transportation to develop guidelines. Mr. Hopkins asked if this would have to be memorialized in an addendum to the contract, to which Mr. Barnett stated yes. Mr. Harmon noted that a bus replacement plan was one of the key recommendations of the audit. He stated that the Director of Transportation should be more involved in replacement decisions because the contractor could benefit from greater resale value if a bus is retired earlier than necessary. Mr. Harmon stressed that age should not be the primary factor for replacement decisions. Mr. Hopkins asked if maintenance costs affect the rates billed to RCPS. Mr. Harmon noted that Mountain Valley Transportation uses a flat rate for routes and does not directly bill the Division for maintenance costs. Mr. Hopkins asked if management knows how much Mountain Valley spends on each bus. Mr. Barnett responded that management does not receive that data. Mr. Harmon suggested that the Division take back responsibility for purchasing replacement buses in exchange for lower rates from the contractor. This would enable the Division to restore its ownership of the fleet over time and provide greater flexibility to consider other contractors in the future. He also recommended that future transportation contracts require the contractor to provide a breakdown of costs consistent with the data required by the Virginia Department of Education so that Roanoke can compare its costs to other school divisions. At approximately 10:50, Ms. Rottenborn made a motion to enter into a closed session to discuss the transportation contract. Mr. Hopkins seconded the motion and the motion passed. Page 2 of 3 Audit Committee Minutes March 23, 2017 Open session resumed at approximately 11:10 AM and was promptly adjourned. 5. Adjournment Mr. Hopkins adjourned the meeting at 11:11 AM. Page 3 of 3