St. Anthony Village Watchdog - St. Anthony, Minnesota

Minnesota State Auditor Reports on Recent Audit of Independent School District 282 See below for links to related articles and report.

The Minnesota State Auditor's office made some much-needed recommendations in their audit of School District 282.

The Auditor determined that the district had the legal right to spend the $1.3 million surplus that resulted from the referendum and health and safety bonds. In these difficult economic times, the ISD 282 School Board used poor judgment when using these surplus funds on non-voter approved projects rather than using these funds to pay down the massive debt load the school district is carrying.

We support the recommendations that the Auditor's office made concerning the current conflict of interest policies by including "organizational conflict of interest" in a revised policy. (Kristen Hoheisel, the Director of Business Service's husband, Michael Hoheisel of Northland Securities, underwrites the school district's bonds and counsels them in financial matters, and petitioners feel this is a conflict of interest).

According to the Auditor's report, the following policy changes are recommended:

"Policies regarding organizational conflicts of interests seek to ensure adherence to two underlying principles: 1) preventing the existence of conflicting roles that might bias a contractor's judgment, and 2) preventing unfair competitive advantage in the awarding of contracts . . ."

Also, "The adoption of an organizational conflict of interest policy would provide the District an opportunity to formalize procedures for disclosures and mitigation of potential organizational conflicts of interest, including setting out procedures for assignment of work to the representative by persons or bodies other than the Director of Business Services."

The Auditor's office also recommended that the District also adopt a formal bidding process. No bidding process was used for the underwriting of $22,000,000 in bonds awarded to Michael Hoheisel of Northland Securities in 2008. Principal and interest will amount to a debt of $37,000,000 to district taxpayers, yet there were no competitive bids for such a large expenditure, and that is unacceptable!

Now, the school board needs to change their policies and implement the recommendations made by the State Auditor's office. This will be a first step toward enhancing transparency and fiscal responsibility. This is long overdue!