Press Release:

Today the Washington State Auditor’s office (SAO) briefed members of the School Board on its construction management performance audit of Seattle Public Schools’ Building Excellence Program (BEX). The audit, which covers BEX activities from July 1, 2005 through June 30, 2008, states that the District has adopted a well-designed set of policies and procedures for construction management. The report lists as noteworthy several examples of District good practices including: hired experienced construction managers, developed standard practices and contract provisions and established the BEX Oversight Committee, comprised of subject experts from the community.

The audit also points out that, based on the period reviewed, there are additional improvements that could be made to strengthen policies and procedures, and acknowledges that the District has already put additional policies and procedures in place to strengthen contracting and ensure compliance. The audit also identifies instances where District policies and procedures were not followed, and where cost savings could have been realized.

The audit report states that, “In general, we found the District’s processes and procedures for managing the BEX construction projects were well-designed and addressed most of the leading best practices.” At the exit conference, the auditor also stated, “We commend the District for recognizing the need for outside expertise to manage construction projects under the Building Excellence Program.”

“I appreciate that the State auditor commended district staff for navigating the very difficult conditions in the construction industry during the period of the audit,” said School Board Vice-President Michael DeBell. “Staff faced unprecedented escalation in construction costs; needed to manage the complexity of historic renovations which often result in unanticipated costs; and at the same time stay on schedule to ensure that schools reopened on time for students and staff. The projects underway during the time of the audit were completed successfully and these buildings are tremendous assets to our community.”

Director DeBell also thanked the state auditor for the detailed review of the district’s construction program. “I appreciate the suggestions made by the auditor to improve practices, and we will look to incorporate those as we continue to move forward with our Building Excellence Program,” said Director DeBell.

The audit focused on management of contracts and contractors, contract changes and communications with interested parties, and was designed to determine whether Seattle Public Schools established and followed sound processes to effectively manage BEX construction projects. The audit covers portions of the District’s management of BEX II and BEX III projects from July 1, 2005 through June 30, 2008. The audit specifically focused on change orders and modifications, and covered $38 million of program expenditures over the period audited. Seattle is the first school district in the state of Washington to have its construction practices audited under the new performance audits resulting from the voter-approved Initiative 900.

The audit report states that, “Overall Seattle Public Schools designed appropriate construction management practices that addressed most leading best practices, but it could make improvements in several areas.”

The audit report identified several improvements that could be made in the areas of policies and procedures, including contractor proposals, construction management performance evaluations, performance measures, corrective actions for non-performance, communications with the Board and lessons learned. However, the audit report states that the “the District has addressed many of these gaps when it revised its policies and procedures in September 2008.”

“Seattle Public Schools appreciates the detailed review provided in the State Auditor’s report,” said Dr. Maria L. Goodloe-Johnson, Superintendent. “Our community has entrusted the District with the funds that enable us to repair and renovate our aging buildings so that students and staff benefit from up-to-date learning environments. It is imperative that these programs are well managed, so I am pleased that the auditor found our construction management practices to be sound. It is unacceptable when staff do not comply with those practices. The improvements made to policies and procedures over the past two and a half years help ensure that these issues will not occur again.”

In 2007, the District began a comprehensive review of contracting policies and procedures, which were approved and implemented in fall 2008. As the auditor began to share preliminary findings, the District made additional adjustments to policies and procedures in 2009 and again in 2010. In addition, BEX program staff, construction management and project managers have all been trained in current policies.

Materials related to the audit and district response are available at: HUhttp://www.seattleschools.org/area/auditresponse/index.dxmlUH. The State Auditor’s Office will post the full report on its website at HUwww.sao.wa.gov