The Missouri state auditor’s office released a report Tuesday stating that St. Louis Public Schools is spiraling toward bankruptcy if steps to control spending are not taken immediately.
The first of two reports states that the St. Louis Board of Education failed to provide proper oversight of the district and its leadership, which could cause the district to run out of funds during the 2030-31 school year.
State Auditor Scott Fitzpatrick launched the audit last summer after the school board placed the district’s former superintendent, Keisha Scarlett, on leave for offering high-paying salaries to district leadership without board approval.
The board has maintained that the financial mismanagement was led by Scarlett, but Fitzpatrick said the school board “was asleep at the wheel and allowed Dr. Scarlett to abuse the system in the first place.”
“Time and time again, you'll see that the Board of Education can and must do a much better job of providing leadership and oversight for the district,” Fitzpatrick said. “These problems exist in the essential functions of the budget process, where it's been well documented that the district is on a path to bankruptcy.”
Scarlett could not be reached for comment.
The audit primarily focused on the district’s finances and policies from July 2023 to July 2024, but also examined credit card expenditures before and after this time frame.
Questionable charges include:
- $3,888 for a Top Golf venue rental.
- $1,689 for an unexplained four-night stay at Caesar’s Palace.
- $1,282 for an Airbnb rental.
- $1,747 of travel upgrades.
The audit also states that district personnel failed to ensure credit card bills were paid in a timely manner, resulting in $1,106 in late fees.
Scarlett also set high salaries for cabinet-level positions that exceeded the pay schedule the school board had previously approved.
The salaries exceeded the maximum allowed by amounts ranging from $12,478 to $44,039, according to the report.
The board and district failed to follow their own policies and state law around the procurement of contracts for outside vendors, the report said.
The district is supposed to put out a request for proposals and then review at least three bid options, with the goal of choosing the most cost-effective and efficient vendor.
“The district did not competitively select some vendors as required by district policies and state law. In one instance, the district used a non-RFP vendor instead of a preferred vendor for $133,295 in T-shirt purchases without being able to provide an explanation,” the audit states.
Many of the findings in the state audit followed an audit commissioned by the school board last school year that found the misuse of public funds.
St. Louis Public Radio and the St. Louis Post-Dispatch also followed the audit with reporting that detailed many questionable purchases made by district officials using about 20 credit cards.
Since the internal audit, the district took back all of the credit cards that were in circulation and implemented a new policy that would require prior approval for use.
The district also has hired a new chief financial officer and an internal auditor.
The board adopted new policies in February.
Many of the policies are the same as those outlined by the Missouri School Board Association, but the board is in the process of reviewing and adapting them to be more specific to SLPS.
SLPS leadership reacts to state audit report
During a press conference held at the Old Post Office Building in Downtown, Superintendent Millicent Borishade said she was not pleased with the audit’s findings.
“The only place we can go is up from here,” Borishade said. “We have already started new processes, and everybody is aware that we have to do better.”
Borishade joined the district as chief of schools when Scarlett was superintendent. She said she was under the impression that any decisions being made by Scarlett were with board approval.
When asked how the district plans to reduce spending, Borishade didn't provide specific details.
“One of the things that we know that we have to do is look at our spending, look at the efficiencies of our buildings, and plan from there,” Borishade said. “When I say plan from there, meaning that it has to be tighter. We have to follow the protocols. We have to follow our board policies.”
Board President Karen Collins-Adams attended the press conference along with board Vice President Emily Hubbard and Tracy Hykes.
Hubbard and Hykes served on the board when Scarlett was hired and throughout the time period the state auditor’s office examined.
When pressed on the audit’s finding that the board had failed to do its job, Hubbard said, “it’s our job to be responsible, so we are responsible.”
“It's the public's job to say how they feel about who's on the board, and they did that. I'm very pleased with our board right now, and I know that we are working hard to make sure the right things happen, and that our kids get what they need every day.”
Collins-Adams, who ran on a platform to guide the district through its financial problems, said the board is working to do a better job of providing financial oversight of the district.
“All of us are really working hard to be able to provide the best education for our students in St Louis Public Schools,” Collins-Adams said. “It's important for families to understand that we are prioritizing our students. They are the reason why we're here, and as long as we keep that focus up front, we'll be able to do what we need to do to gain the trust of our community.”
Byron Clemens, spokesperson for the American Federation of Teachers Local 420, said in a statement that the union is still reviewing the audit, but is concerned by the lack of planning from district leadership.
“We notice that there seems to be no real plan to move ahead other than closing and consolidating schools in predominantly Black neighborhoods [which are] already devastated by tornado damage,” Clemens said in a statement. “We believe that there is still a significant ‘rainy day’ fund and offer to sit down with the elected school board and other stakeholders and develop a comprehensive five-year plan. Closing and consolidating schools alone is not a viable plan.”
Dorothy Rohde-Collins, previous school board president and SLPS parent, echoed the union’s concern. She’d like to see the board acknowledge the loss of trust among teachers, parents and community members.
“I wish the school board would apologize for the way that they handled this,” Rohde-Collins said. “It doesn’t feel like they’ve taken ownership of this or even feel sorry, and I’m sure that may be true on an individual, personal level, but as a whole, it just doesn’t feel like they’re sorry.”
You can read the full audit at the state auditor’s website.
