Seattle Schools misusing public resources, violating IRS rules

by: Essex Porter Updated:


There's no good reason for a half-dozen Seattle Public Schools employees to commute in district vehicles, according to an audit released eight months ago.

But an undercover investigation by KIRO 7 found at least three of those employees continue to routinely take home cars, though there's no public benefit.

KIRO 7 found one transportation employee drives 60 miles round trip from his Pacific home to Seattle.

The audit reported the practice "increased costs to the District in terms of maintenance, fuel, and repairs."

Yet, district administrators have failed to do anything about it.

"We need to go back to the school board in March with our corrective plan in place," said Pegi McEvoy, assistant superintendent of operations.

When we sat down with McEvoy she cited union concerns for the delay.

Take-home cars are not a written benefit in these workers' union contracts but because lax policies allowed them to commute home for so long, the union and district must now negotiate the issue.

Auditor Andrew Medina reports directly to the school board.

He was hired as an independent analyst after financial scandals rocked the district.

Medina was the lead author of this audit of Seattle Public Schools.

KIRO 7 asked Medina if he expected the issue of take-home cars to be corrected by now, eight months after his audit was released.

"We would expect significant progress, yes," said Medina.

For the past five months, KIRO 7 inspected more than 100,000 investigative records used to create the audit.

Then, we dug deeper, obtaining and analyzing more data to determine the district could save $2.8 million by following its own overtime policies for salaried staff and skipping expensive sick leave cash outs -- a benefit unheard of in the private sector.

Click here to see which district manager made the most overtime.

Follow this link to see KIRO 7's nteractive graphs showing the Seattle Public Schools overtime pay.

Medina also found the district's lax guidelines on take-home cars violate federal IRS regulations in two ways: there's no business reason for these employees to commute daily on the public's dime and the district hasn’t made the employees report mileage - a mandatory requirement that could leave workers stuck with a huge tax bill.

McEvoy disputed this and said the cars are being properly accounted for to the IRS.

However, Medina said, "There are IRS implications; if we're giving out vehicles without a specific need for it, there could be IRS implications for that specific employee."

We wondered if there could be implications for the district since it has not paid taxes on employees' mileage, which could be considered extra compensation.

"That's a potential concern also, but that's not something we looked into," Medina said.

Another troubling discovery, the district is not properly accounting for the fuel it uses to run school buses.

Seattle schools spends $2 million a year on fuel but fails to do regular inventories to make sure it gets what it pays for.

Which surprised Medina, who said, "It's a large asset that goes through the district and for us to leave it up to an outside agency, First Student, to monitor that fuel and have control over it, we just felt like we needed to bring that more in-house."

KIRO 7 discovered this is not a new issue. During the course of our investigation we found an audit from five years ago that criticized the district for not tracking fuel.

"It's sad to me that the district and various superintendents have had these early warning calls from both internal and state audits and they don't seem to follow up and make sure that things get done," said Melissa Westbrook.

Westbrook is a public education advocate and runs a well-regarded blog on Seattle Public Schools.

We shared our research with her.

"You ask yourself the question: How is it that no one is tracking the fuel?" asked Westbrook.

McEvoy said the Transportation Department just implemented a system where each bus driver is given a personal ID number to help monitor usage.

Still, to this day, there are problems following the fuel.

"Can the district say conclusively that none of the fuel is diverted or stolen?" asked KIRO 7 reporter Essex Porter. "We're working with our bus partners in order to do that," replied McEvoy.

For people who support public schools there is deep frustration that Seattle schools fail on basic system levels, wasting taxpayers' money.

"You can't look at other urban areas and see the kind of financial generosity and support that you see in Seattle," Westbrook said. "But I think on everybody's mind -- our elected officials, business people and parents -- (is) why are we not getting ahead as a district?"

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