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School district audit: WC-1 funds appropriately spent

By Jeri Chadwell
Published: Last Updated on

An independent consultant hired by the Washoe County School District said the district has not mismanaged funds raised as the result of the 2016 passage of Washoe County Ballot Question 1 (WC-1), which raised the county’s sales tax to one of the highest in the nation in order to generate funds for capital improvements in the district.

On Thursday, the district announced the audit of its capital funding program, saying that it was “found that all money obtained through the 2016 ballot initiative on capital funding has been spent in accordance with laws and regulations.”

Money associated with WC-1 is required by law to be used only for capital improvement projects, including acquisition, construction, repair and renovation of school facilities. The WCSD board of trustees hired the company Protiviti, an international consultanting firm, in January to review whether the use of the funds aligns with certain laws and regulations—and to determine if WCSD has implemented financial and administrative procedures and internal controls to safeguard assets and ensure project completion according to applicable construction agreements.

MARCE HERZ: The 190,000 sq. ft. school was designed to fit the  surrounding environment. Image: Eric Marks.
MARCE HERZ: The 190,000 sq. ft. school was designed to fit the surrounding environment. Image: Eric Marks.

Financing, debt management, contracting and construction—and the bidding processes related thereto—were reviewed in the audit.

The consultant reviewed WC-1 revenues, bond proceeds and associated Capital Improvement Program expenditures related to capital projects completed or in progress from January 1, 2017 through August 31, 2019 and said it found no misuse of any WC-1 funds.

Since the ballot initiative passed, WCSD has opened five new schools, installed safety features at every school, replaced every school’s lighting with energy efficient LED bulbs and spent more than $150 million on upgrades to HVAC systems, flooring and roofing at older schools.

Additionally, two new schools are being built—Michael Inskeep Elementary School in Cold Springs and the new Procter Hug High School near Wildcreek Golf Course—and upgrades are beginning for Swope Middle School and O’Brien STEM Academy.

A new Career and Technical Education Academy—the Debbie Smith CTE Academy High School—will be under construction beginning in 2022.

“We are so grateful to the voters for prioritizing education and passing the ballot initiative in 2016,” said WCSD Chief Operating Officer Pete Etchart. “The new schools we’ve been able to build because of this funding have significantly reduced overcrowding.”

He added that repairs the district has been able to make to older schools have ensured that “all students are able to stay safe, warm, and dry when they’re in our buildings.”  

The report was presented to the district’s Audit Committee on Thursday and will also be presented to the Capital Funding Protection Committee and the WCSD board of trustees in December.

When WC-1 was being promoted before the 2016 election, some advocates fought back against community outcry for the sales tax driven initiative. According to the IRS, sales taxes, like those associated with WC-1, “are considered regressive because they take a larger percentage of income from low-income taxpayers than from high-income taxpayers.”

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