State audit raises concerns about change order process
July 28, 2016 at 4:25 p.m.
A state audit of Warsaw Community Schools' finances raised questions about how the school corporation has been handling change orders for the high school construction project, the school board was told Monday.
Chief financial officer Kevin Scott said the state auditors told him the change orders submitted so far had not been approved by the school board, as required by state law.
Architect Mary Ellen Rudisel Jordan said she is part of a team of architects chosen by WCS to keep track of the construction project. When a change order is requested, she said, either by administrators at the school or contractors, it is first submitted to the architects, then to to the construction control company, then to contractors, who submit their prices. It then goes back to construction control, then to the architects, who approve it after a reasonable price is agreed upon.
Then the change order is submitted to the WCS finance office for payment.
"Where does the board fit into this process?" asked board member Deb Wiggins. "The board is responsible to the public for the bottom line."
Rudisel asked the board to form a subcommittee to review change orders, and McGuire suggested the board have a subcommittee approve change orders.
"I want a process that does not unduly burden the board with meetings," McGuire said.
Wiggins made a motion to require the architects to provide at the next school board meeting a compilation of the change orders so far, and the motion passed unanimously.
The board also approved a motion to instruct McGuire to develop a process by the next meeting May 16 that will allow the board to meet state requirements in approving change orders.
No amount was given for the change orders approved so far, but superintendent Dr. Dave McGuire said the $3.8 million over budget that was mentioned at last month's meeting was not accurate.
Most of the $3.8 million overage, Rudisel said, was because of the increase in the cost of steel, which went up 55 to 110 percent.
Wiggins said she wants to know how much of the overage is due to the increase in material costs and how much is due to change orders.
McGuire said the original bond issue was $30 million.
"As we're working on this and we have money available and there are things we can do for the betterment of the students and that will improve the project, ... then the whole thing is to get as much bang for the total dollars as we can get," he said.
"The issue is that the 'we' has not been the board," Wiggins said. "But it will be from this time out."
Board member Dan Robinson said state law specifies that change orders cannot exceed 20 percent of the construction costs, and Rudisel said the actual construction costs are approximately $26 million to $28 million.
Jennifer Shepherd, an assistant principal at Warsaw Community High School, said the committee at WCHS that is involved in the construction first looks at how the change will benefit students.
"There's application and then there's fiscal accountability," Wiggins said. [[In-content Ad]]
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A state audit of Warsaw Community Schools' finances raised questions about how the school corporation has been handling change orders for the high school construction project, the school board was told Monday.
Chief financial officer Kevin Scott said the state auditors told him the change orders submitted so far had not been approved by the school board, as required by state law.
Architect Mary Ellen Rudisel Jordan said she is part of a team of architects chosen by WCS to keep track of the construction project. When a change order is requested, she said, either by administrators at the school or contractors, it is first submitted to the architects, then to to the construction control company, then to contractors, who submit their prices. It then goes back to construction control, then to the architects, who approve it after a reasonable price is agreed upon.
Then the change order is submitted to the WCS finance office for payment.
"Where does the board fit into this process?" asked board member Deb Wiggins. "The board is responsible to the public for the bottom line."
Rudisel asked the board to form a subcommittee to review change orders, and McGuire suggested the board have a subcommittee approve change orders.
"I want a process that does not unduly burden the board with meetings," McGuire said.
Wiggins made a motion to require the architects to provide at the next school board meeting a compilation of the change orders so far, and the motion passed unanimously.
The board also approved a motion to instruct McGuire to develop a process by the next meeting May 16 that will allow the board to meet state requirements in approving change orders.
No amount was given for the change orders approved so far, but superintendent Dr. Dave McGuire said the $3.8 million over budget that was mentioned at last month's meeting was not accurate.
Most of the $3.8 million overage, Rudisel said, was because of the increase in the cost of steel, which went up 55 to 110 percent.
Wiggins said she wants to know how much of the overage is due to the increase in material costs and how much is due to change orders.
McGuire said the original bond issue was $30 million.
"As we're working on this and we have money available and there are things we can do for the betterment of the students and that will improve the project, ... then the whole thing is to get as much bang for the total dollars as we can get," he said.
"The issue is that the 'we' has not been the board," Wiggins said. "But it will be from this time out."
Board member Dan Robinson said state law specifies that change orders cannot exceed 20 percent of the construction costs, and Rudisel said the actual construction costs are approximately $26 million to $28 million.
Jennifer Shepherd, an assistant principal at Warsaw Community High School, said the committee at WCHS that is involved in the construction first looks at how the change will benefit students.
"There's application and then there's fiscal accountability," Wiggins said. [[In-content Ad]]