Taylor Issues Performance Audit of Liberty Local School District

Auditor of State says plan could save taxpayers more than $1.2 million each year

Wednesday, August 5, 2009

Trumbull County -

Auditor of State Mary Taylor released the performance audit of the Liberty Local School District.  The audit identified potential savings of more than $1.2 million annually to help the district address its financial condition.

“This performance audit is a valuable resource for Liberty Local School District leaders as they make important decisions about their operations and finances,” Taylor said.  “The audit will assist school officials as they work to ensure fiscal stability while continuing to provide important educational services to area children.” 

The performance audit was conducted in response to the district’s financial condition.  The Liberty Local School District projects a deficit of approximately $1.9 million for fiscal year 2009-10, which is anticipated to reach $11.7 million by fiscal year 2012-13.

The audit examines the district’s financial systems, human resources, facilities and transportation operations. The audit also notes that the district should be commended for transporting 29.5 percent more students per bus than other similar school districts.  Each bus completes three runs per day, which allows the district to utilize fewer busses.  Because of this practice, the district can better control operating and bus replacement costs.

The audit provides a series of options for Liberty Local School District officials to consider in their efforts to improve efficiency and reduce costs. Some of the recommendations include:

• Reducing the number of teachers and educational service personnel could save $490,000.
The Liberty Local School District employs more teachers than peer districts and state minimum standards.  The district also employs more educational service personnel (counselors, registered nurses, library, media specialists, visiting teachers, social workers, elementary art, music and physical education teachers) than minimum standards.  Reducing staffing closer to state minimum standards may be necessary to address the projected general fund deficit.

• Changing the rate of employee contributions to health insurance premiums and adjusting plan benefits through negotiations could save $306,000.
A negotiated increase in employee contributions for all staff would reduce the impact of health care costs on the district’s general fund and bring employee contribution rates in line with statewide averages.

• Reducing the number of custodial/groundskeeper staff could save $155,000.
The district currently employs more custodial/groundskeeper staff when compared to industry benchmarks.  Decreasing staff to meet the industry benchmarks would reduce costs.

• Eliminating the additional pension benefit for the administrative and non-bargaining positions, negotiating to limit the base wage increase for classified staff and adjusting salary schedules for custodians and bus drivers could save $134,800. 
Taking these measures would bring compensation levels closer in line with other similar districts.

The performance audit also recommended that the district take steps that would involve a one-time cost:

• Maintaining an appropriate reserve balance in the Self-Insurance Fund could cost $799,000.
The district should work with its third-party administrator to determine an appropriate reserve balance in the Self-Insurance Fund.  Auditor of State Technical Bulletin 2001-005 indicates that only meeting the minimum requirement of having sufficient cash on hand to pay approved claims is risky since catastrophic illnesses and other significant self-insured liabilities could cause a material increase in required payments. A more fiscally conservative approach is to fund an additional amount above the amount needed for approved claims, to build a cushion (reserve balance) for large, unforeseen claims.

A performance audit reports on the efficiency and effectiveness of government agency or program operations.  This is achieved through comparing and benchmarking the agency or program to similar agencies and relevant standards.  The results of a performance audit can be used to improve the effectiveness of operations, save taxpayer dollars and make better use of existing resources.

Since taking office, Taylor has released 68 performance audits outlining more than 2,400 recommendations for improvements. Those recommendations, if fully implemented, could result in potential cost savings and revenue enhancements of more than $122.7 million annually.

A full copy of the report is available online at http://www.auditor.state.oh.us/AuditSearch/Reports/2009/Liberty_LSD_09_Performance-Trumbull.pdf


The Ohio Auditor of State’s Office is one of the largest accounting offices in the nation.  The office strives to ensure that all public funds are spent legally and appropriately and works aggressively to root out fraud, waste and abuse in public spending.  Taylor encourages anyone suspecting fraud or misspending of public dollars to contact her office toll free at 1-866-FRAUD-OH (1-866-372-8364).  Since taking office in January 2007, Taylor has identified more than $20.6 million in public funds that were spent illegally and must be repaid.