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Shelby County Schools board calls for improved tracking system, discusses splitting property in demerger

Shelby County board members have asked district officials to provide a timeline and a cost estimate for an entirely revamped process for tracking its assets before the board’s next work session.
Last December, the first audit of Shelby County Schools’ possessions in years found over $48 million worth of assets missing.

Board member David Pickler says he’s surprised it wasn’t more: As it turns out, for three years, between 2005 and 2008, legacy Memphis City Schools was not properly tracking its items at all.

“If I wanted to order iPads for my buddies, I could have have ordered 210 instead of 200 and we wouldn’t have known,” said board chair Kevin Woods at a meeting of the Shelby County board’s audit committee Tuesday.

Board members Woods, Pickler, and Chris Caldwell were focused on next steps at Tuesday’s meeting. Both legacy Shelby County Schools and legacy Memphis City Schools were missing items, according to the recent audit. The two districts were merged last July and are now preparing for the creation of six new school districts carved out of the boundaries of legacy Shelby County Schools and the transfer of buildings and objects to those new districts.

“My honest assessment is, all this inventory is not going to be found,” Woods said. He said the board should move forward to ensure that there was a better process in place.

Pickler supported Woods’ idea. “Instead of trying to beat the proverbial dead horse, we should put the focus on acknowledging that we have a problem, creating a solution, and as we’re doing that make sure we meet our legal obligations and other obligations, especially as we’re about to transfer 33 very large assets and hundreds of others,” Pickler said. Pickler was referring to plans to transfer 33 buildings to six new suburban school districts being formed in the Memphis suburbs.

Pickler said some of his goals were “to bring forward to the board and superintendent some recommendations about policy issues, procedures, and putting in place a system and transparency structure. Then I think we can eventually have a report of what we really have per school.”

Pickler previously encouraged district officials not to spend time defending against the findings, but rather to locate items and improve their process.

Board members told district officials they did want the names of personnel associated with various objects, to ensure there had been no wrongdoing.

Melvin Burgess, the district’s director of audit, said his department would prepare a timeline and estimate for board members. He said recommended a return to a centralized tracking process. “Right now everyone is buying everything and we’re not catching who’s buying what,” he said.

He said of tracking items, “I’ve been with the district 25 years, and some things I saw, it wasn’t even an issue of tracking. For instance, you might have a delivery of equipment in summertime. The deliveryman puts it in the office, it’s not manned, and it walks away. There are so many factors. We have badges now, but people don’t follow the rules sometimes.”
Board member Pickler said the district needed to change its culture and attitude toward tracking its assets. “We are a government agency…We need to move into latter part of 20th century with how we’re doing this.”

Board member Caldwell said,”We should commit funds if we need extra people to get this right.”

Pickler said he hoped the district would have a timeline by June 1, and a new system in place by the end of August, when the district’s board will turn over due to the creation of the new school districts.

Board members cited FedEx and Autozone as local organizations with expertise in tracking objects that might be able to advise the district.

Transfers to Municipalities

How to effectively transfer items from Shelby County Schools to the new municipal districts was also discussed at Tuesday’s meeting.

Shelby County Schools superintendent Dorsey Hopson II will meet with superintendents from the municipal districts next week to discuss plans to separate the districts. “We’re referring to it as the reverse TPC,” Pickler said, referring to the Transition Planning Commission that facilitated the merger of Shelby County Schools and Memphis City Schools.

Each of the 33 schools that will be transferred from Shelby County Schools to a municipal district next year provided a list of items currently in their buildings to the county school system. Those reports had not yet been cross-checked with the district’s own audit of the materials by Tuesday.

Those 33 buildings were the first to be audited, Burgess said.

Board members sought to clarify expectations and legal obligations as the items are transferred between districts. Caldwell recommended that the district seek legal advice and ensure that the district and municipalities communicated about expectations.

But they were clear that all items in the 33 schools would remain with the municipalities.

“We’re committed with this transfer of facilities that the items will remain with the kids they intended to serve,” Woods said.

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