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Erie County -

Auditor of State Mary Taylor released the performance audit of the Vermilion Local School District.  The audit identified potential savings of more than $2.5 million annually to help the district address its financial condition.

“This performance audit is a valuable resource for Vermilion 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 Vermilion Local School District is projected to have a deficit of approximately $4.5 million and $12.7 million for fiscal year 2010-11 and fiscal year 2011-12, respectively.

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 using web-based purchasing software.  The software allows the district to take advantage of cooperative purchasing and competitive bidding and to review historical purchases and trends.

The audit provides a series of options for Vermilion 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 $1,804,500.
The Vermilion Local School District employs more teachers than peer districts and state minimum standards.  The district also employs more educational service personnel than minimum standards (counselors; nurses; elementary art, music and physical education teachers; library media specialists; visiting teachers; etc.).  Reducing staffing closer to state minimum standards may be necessary to address the projected general fund deficit.

• Requiring all staff to enroll in the new health care plan and changing the rate of employee contributions to health insurance benefit premiums through negotiations could save $160,000.
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.

• Limiting bus purchases could save $151,000.
Based on industry guidelines, the district should postpone replacing two buses per year over the forecast period. 

• Reducing retirement payouts through negotiations could save $95,000.
The district provides severance payouts that are significantly higher than state minimum requirements, especially for staff that retire in their first year of eligibility.

• Reducing the number of supplemental contracts and related pay could save $59,400.
The district has twice as many supplemental contracts when compared to nearby districts. Additionally, based on a sample review of supplemental positions, the district typically provides higher compensation.

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 www.auditor.state.oh.us.

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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 $20.4 million in public funds that were spent illegally and must be repaid.