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[1. Notice and Return]

[00:00:02]

GOOD AFTERNOON AND WELCOME TO THE AUDIT COMMITTEE MEETING OF THE DALLAS SCHOOL DISTRICT BOARD OF TRUSTEES. PLEASE STAND AND JOIN US FOR A MOMENT OF SILENCE AND REMAIN STANDING

[2. Moment of Silence and Pledge of Allegiance]

FOR THE PLEDGE OF ALLEGIANCE. AND A SALUTE TO THE TEXAS.

OF ALLEGIANCE].

ALL RIGHT, I WANT TO THANK AND RECOGNIZE OUR BOARD OF TRUSTEES, PUBLIC ADVISER MEMBERS

[3. Acknowledgements]

TONI STEPHENS AND CHRIS LEWIS FOR BEING HERE.

WE REALLY APPRECIATE YOUR HELP.

I AM JOINED BY TRUSTEE DUSTIN MARSHALL.

I BELIEVE TRUSTEE JOYCE FOREMAN IS GOING TO BE JOINING US ONLINE.

AND TRUSTEE MAXIE JOHNSON, UNFORTUNATELY, HAD AN EMERGENCY, SO HE WILL NOT BE IN ATTENDANCE AND TRUSTEE DAN MICCICHE SAID HE MAY BE JOINING US LATER.

WE'RE HERE WITH OUR SUPERINTENDENT OF SCHOOLS, DR.

MICHAEL HINOJOSA, WHO JOINS US.

AND I AM EDQIN FLORES, COMMITTEE CHAIR.

AND WE'RE JOINED BY I THINK I ALREADY SAID DUSTIN MARSHALL.

ON MARCH 16, 2020, GOVERNOR GREG ABBOTT GRANTED A REQUEST BY ATTORNEY GENERAL KEN PAXTON TO TEMPORARILY SUSPEND A LIMITED NUMBER OF OPEN MEETINGS LAWS TO THE EXTENT NECESSARY TO ALLOW TELEPHONIC OR VIDEO CONFERENCE MEETING IN RESPONSE TO CORONAVIRUS COVID-19 ACCORDANCE WITH THOSE SUSPENDED RULES, WE CERTIFY THE FOLLOWING.

THIS NOTICE OF THIS MEETING WAS POSTED ONLINE FOR AT LEAST 72 HOURS.

WE HAVE A QUORUM IN ATTENDANCE AT THIS MEETING.

EITHER PHYSICALLY OR TRUSTEES ARE IN ATTENDANCE THROUGH VIDEOCONFERENCE VIA ZOOM.

WE'RE MEETING BY USE OF ZOOM'S MEETING SOFTWARE APPLICATION, WHICH ALLOWS TWO WAY COMMUNICATION FROM MEMBERS OF THE PUBLIC.

MEMBERS OF THE PUBLIC WILL FOLLOW THE INSTRUCTIONS ON MEETING NOTICE FOR REGISTRATION, REGISTERING TO SPEAK DURING THE PUBLIC COMMENT PORTION WILL BE ALLOWED TO ADDRESS THE BOARD FOR THREE MINUTES PHYSICALLY PRESENT OR UNMUTED, FOR THREE MINUTES TO SPEAK.

ALL OF THE MEETING PROCEDURES WILL ADHERE TO BOARD ADOPTED PROCEDURES TO THE EXTENT PRACTICABLE. AN AUDIO RECORDING OF THIS MEETING IS BEING MADE AND WILL BE AVAILABLE TO THE PUBLIC. WE APOLOGIZE IN ADVANCE FOR ANY UNFORESEEN DIFFICULTIES AND ASK FOR YOUR PATIENCE AS WE NAVIGATE UNPRECEDENTED CONDITIONS.

IF YOU HAVE ANY QUESTIONS ABOUT THESE SUSPENDED LAWS, PLEASE CONTACT THE OFFICE OF ATTORNEY GENERAL AT 888 672-6787 OR BY EMAIL AT TOMA@.

THAT IS TOMA@ORG.TEXAS.GOV.

THE NEXT PART OF THE AGENDA CALLS FOR A PUBLIC FORUM SEGMENT.

HOWEVER, I AM INFORMED THAT NO ONE SIGNED UP TO SPEAK.

[A. Consider and Take Possible Action to Approve the Minutes of November 12, 2020]

SO THE FIRST ITEM ON THE AGENDA IS TO CONSIDER AND TAKE POSSIBLE ACTION TO APPROVE THE MINUTES OF NOVEMBER 12TH, 2020.

DO I HAVE A MOTION TO APPROVE THE MINUTES OF NOVEMBER 12TH 2020.

MOVE TO APPROVE.

SECOND.

ALL THOSE. NO DISCUSSION.

ALL THOSE IN FAVOR SAY AYE.

AYE. THE MOTION PASSES TWO ZERO.

OK, WE HAVE JUST ADOPTED THE MOTION APPROVING THE MINUTES OF NOVEMBER.

12TH 2020. SO THE NEXT ITEM ON THE AGENDA IS THE REPORT ON DISTRICT FINANCIAL UPDATE.

[B. Report on District Financial Update, Dwayne Thompson, CBO]

DWAYNE THOMPSON.

MONEYMAN. GOOD AFTERNOON.

JUST QUICKLY RUN THROUGH THE BUDGET AMENDMENT FOR THE END OF FEBRUARY, THE ONLY ADD TO THE BUDGET WAS 129 161 129 THOUSAND ONE SIXTY ONE, AND THAT IS FOR THE FIRST QUARTER OF ADULT MEALS FOR THE MEALS WE SERVE FOR COVID.

AND SO THAT WAS ADDED AS WE FOR THE BUDGET AND CODED TO CHILD NUTRITION LINE WITHIN THE GENERAL FUND.

ON THE OTHER FUNDS.

WELL, LET ME JUST FINISH WITH THE GENERAL FUND.

WITH THAT THE ENDING FUND BALANCE OF UNASSIGNED WOULD STILL BE IS STILL PROJECTED TO BE 619 MILLION.

THERE WERE NO BUDGET AMENDMENTS FOR DEBT SERVICE AND THEN THE ONLY OR FOOD SERVICE WHEN FROM THE STANDPOINT OF EXPENDITURES, THEN WE GET INTO THE THE FOUR YEAR FORECAST.

AND AS WE PROGRESS THROUGH THAT AT THE END OF 2020, END OF 2025, WE'RE STILL PROJECTING A FUND BALANCE OF THREE HUNDRED TWENTY NINE EIGHT HUNDRED FIFTEEN DOLLARS, EIGHT HUNDRED FIFTEEN THOUSAND 719.

AND THAT IS ASSUMING NO CHANGES BETWEEN NOW AND 24-25 FROM THE PROJECTION.

[00:05:04]

SO I WILL ANSWER ANY QUESTIONS THAT YOU HAVE REGARDING THE FINANCIALS.

TRUSTEES. ANY QUESTIONS? ADVISORY OR. ADVISORY MEMBERS IS THIS.

I DON'T KNOW, TRUSTEE FOREMAN IS ONLINE OR NOT.

OH, OK, YEAH, LET ME KNOW WHEN SHE GETS ONLINE, SO WE'LL LET FOLKS KNOW.

OK, WELL, NO QUESTIONS WE'LL MOVED ON TO THE STATUS OF THE MAINTENANCE WORK ORDER SYSTEM.

[C. Report on Status of the Maintenance Work Order System, Dwayne Thompson, CBO]

DWAYNE THOMPSON.

STILL ME. SO OUR FIRST MILESTONE IN FOLLOW UP TO THE WORK ORDER AUDIT WAS THAT WE WOULD REDUCE BY 25 PERCENT THE WORK ORDERS OF ROUTINE WORK ORDERS BY DECEMBER 18TH.

AND AS WE'RE REPORTING HERE AND THE ROUTINE WORK ORDERS FOR THE CLOSE OF DECEMBER 11TH, WE HAD REDUCED 43 PERCENT.

SO OUR NEXT MILESTONE IS AT THE END OF MARCH OF 50 PERCENT.

SO WE'LL STILL BE TRACKING ALONG WITH THAT.

AND SO WE WANT TO DO A FOLLOW UP TO THE BOARD THAT WE, IN FACT, MET THE GOAL OF OUR MILESTONE AND THAT WE ARE REDUCING THE OUTSTANDING WORK ORDERS.

KEEP IN MIND THAT WE ALWAYS HAVE WORK ORDERS THAT COME IN EVERY DAY, BUT WE'RE MAKING PROGRESS ON THE OUTSTANDING ONES.

OK, TRUSTEES, ANY QUESTIONS? I WOULD JUST SAY THAT'S AWESOME. YOU KNOW, SUBSTANTIAL IMPROVEMENT THAT I KNOW IS APPRECIATED BY OUR PRINCIPALS AND OTHERS REQUESTING WORK.

NICE JOB. YEAH, DEFINITELY APPRECIATE THE HARD WORK OF EVERYBODY.

PLUS, WE HAD ICE MAGEDDON WHICH SET THIS BACK ALSO ON THIS TOPIC.

SO THANK YOU FOR THAT.

REALLY APPRECIATE IT. WELL, YOU KNOW, WE'LL KEEP THIS ITEM ON THE AGENDA JUST TO BE ABLE TO CONTINUE TO.

GO AHEAD. THE ONE THING, JUST AS IF WE'RE KEEPING THIS ON THE AGENDA TO KEEP MOVING IT FORWARD. I'D LOVE TO SEE SOME ADDITIONAL INFORMATION ABOUT THE LIKE THE AGING OF THE WORK WORK, WORK ORDERS.

WE CAN GET THAT FOR YOU AS WELL, BECAUSE WE ARE TRACKING THAT.

LET'S JUST STICK IT ON THIS DOCUMENT THE NEXT TIME WE LOOK.

I WILL DO THAT. THANKS.

NO WORRIES. ALL RIGHT.

SO THEN.

TRUSTEE FOREMAN HAS JOINED THE MEETING.

OK, THANK YOU.

[D. Consider and Take Possible Action to Accept and Make Final Internal Audit Reports]

SO WE'RE UP TO ITEM D, CONSIDER AND TAKE POSSIBLE ACTION TO ACCEPT AND MAKE FINAL INTERNAL AUDIT REPORTS. SO I THINK WHAT WE'RE GOING TO DO IS WE'LL HEAR THE REPORTS.

WE WANT TO HEAR THE REPORTS FIRST AND THEN WE'LL VOTE ON THEM AFTERWARD, AND ONE THING THAT I WANTED TO DO IS GET OUR CCMR FIRST BECAUSE THEY'RE HERE.

NICE FOLKS ARE HERE AND THEN THE SECURITY AUDIT.

DO YOU NEED A MOTION TO TABLE THIS? WELL, I THINK IT'S ON THE AGENDA TO DISCUSS.

AND SO THEY'RE GOING TO PRESENT THE REPORTS AND THEN WE'LL MAKE THE MOTION TO ACCEPT THE REPORTS. ARE WE GOOD WITH THAT.

WE DO NEED A MOTION TO.

OK, SO THERE WILL, I GUESS, WE'LL.

I MOVE TO CONSIDER AND TAKE POSSIBLE ACTION TO ACCEPT AND MAKE FINAL THE INTERNAL AUDIT REPORT. SO I'LL SECOND SO IT'S ON THE TABLE.

AND SO WE'LL GET THE REPORTS NOW.

THANK YOU, TRUSTEE FLORES.

ROBERT RUBEL, CHIEF EXECUTIVE TRUSTEE MARSHALL, SUPERINTENDENT HINOJOSA, GOOD AFTERNOON.

SO OUR FIRST REPORT TO GO THROUGH WILL BE, WE SPENT A LOT OF TIME OVER THE LAST SEVERAL MONTHS, YOU KNOW, WORKING THROUGH THE PROCESS AND THE GMPS.

OUR CONSULTANT THAT HELPED ON THIS AUDIT, RICH TOWNSEND, IS HERE.

I'M GOING TO LET HIM TALK.

WE'VE IDENTIFIED NINE ISSUES THAT WE PUT IN THE REPORT AND HAD RESPONSES ON.

SO I'LL LET HIM GO THROUGH THAT THOSE SPECIFICS, IF THAT'S OK.

PLEASE. VERY GOOD.

SO THIS REPORT IS REALLY A FOLLOW UP TO THE INTERIM AUDIT REPORT THAT WAS DISCUSSED WITH YOU IN NOVEMBER, I BELIEVE IT WAS.

SO THAT WAS WHEN WE TOOK A LOOK AT MOST OF THE GMPS HAD NOT BEEN SUBMITTED AT THAT TIME.

AND WE MADE A NUMBER OF RECOMMENDATIONS THERE ABOUT HOW THE PROCESS COULD BE APPROVED FOR THE CURRENT AND THIS REPORT BASICALLY TOOK THAT POINT OF TIME FORWARD AS WE WORK WITH PROCUREMENT, LEGAL, ET CETERA, FOR SEEING HOW THE GMPS WERE COMING TOGETHER.

AND WE SAW OPPORTUNITIES THERE ON HOW YOU COULD IMPROVE YOUR FUTURE FINDINGS, THERE'S NINE DIFFERENT REPORT RECOMMENDATIONS, MOST OF THEM RELATE TO.

IF YOU IF YOU DO LITTLE SMOOTHER, A MORE STREAMLINED GET THE MAXIMUM BENEFITS OUT OF THE WAY YOU DECIDE TO GO.

I KNOW YOU'RE ALSO CONSIDERING A DESIGN BUILD APPROACH AND THEY'RE SIMILAR.

SO MANY OF THESE RECOMMENDATIONS WOULD ALSO GO FOR DESIGN BUILD.

SO NO ONE BASICALLY IS JUST ABOUT GETTING DETAILS.

WE JUST IDENTIFIED SPECIFIC THINGS IN THE IN THE CONTRACTS THAT WE HAVE WITH THE A133.

[00:10:03]

IT WAS DRAFTED BY INTERNAL DISD AND LEGAL PRIOR TO ME COMING ON BOARD.

IT WAS ALREADY OUT ON THE STREET BACK AT LAST AUGUST OR SO FOR TO GET THE CURRENT WANTED FOR THE CURRENCY OF OUR CONTRACTS.

AND I MENTIONED THAT IN THE LAST REPORT.

AND ONCE AGAIN, I JUST SORT OF HIGHLIGHTED THE RECOMMENDATIONS.

SO THAT'S A WHOLE SPECIAL PROJECT THAT WE'RE RECOMMENDING THAT BEFORE YOU GO OUT THERE, EVER PROCURE ANOTHER THESE ADDITIONAL ENHANCEMENTS TO IT, THAT SHOULD SAVE YOU A LOT OF MONEY AND MAKE THE PROCESS GO SMOOTHER. OK, SO THAT WAS FINDING NUMBER ONE.

AND RECOMMENDATION. TWO WAS THERE WAS JUST A LITTLE BIT OF A TRANSITIONAL PROBLEM.

THE MBWE FORMS AND GUIDELINES THAT FOR AUGUST OF 2020, WHICH AGAIN, BEFORE I GOT HERE, IT THE COMMUNITY FOR THE CONTRACTORS SORT OF SORT OF DIDN'T EXACTLY KNOW HOW.

A TEAMING PARTNER REALLY SHOULD WORK FOR THE DISTRICT, SO WE ADDRESS THAT IN THE LAST AUDIT REPORT, GOT IT FIXED, GOT YOUR CONTRACT FIXED.

SO MWBE IS, YOU KNOW, HAPPY WITH A NEW TEAM AGREEMENT.

SO THERE WERE SEVERAL A COUPLE OF DIFFERENT THINGS.

THE WAY THE TEAMING PARTNERS WERE THINKING THEY WERE GOING TO GET TO OPERATE, THAT REALLY WASN'T APPROPRIATE.

AND THAT'S NOW BEEN ADDRESSED AND FIXED.

AND WE'RE JUST SAYING KIND OF TIE ALL THAT TOGETHER AS YOU GO FORWARD.

IT'S KIND OF TRICKY. CSP CONTRACTS ARE DIFFERENT THAN THE BECAUSE OF THE PROCUREMENT AT THE SUBCONTRACT LEVEL.

IT HAPPENS, YOU KNOW, UNDER YOUR WATCH, SO TO SPEAK, WHEREAS UNDER CSP IT'S ALL DONE BEFORE. SO THEN FINDING NUMBER THREE, OUR RECOMMENDATION WAS.

TALKING ABOUT STREAMLINING, GETTING THE A LOT OF YOU WERE CONCERNED WITH DELAYS THAT, YOU KNOW, GETTING THE GUYS.

WHY AREN'T WE STARTED? WHY AREN'T THE SCHOOL STARTED? AND I SAW THAT. IT'S LIKE IT AH.

SEEMS LIKE YOU SHOULD BE ABLE TO GO FASTER HERE.

SO THIS RECOMMENDATION NUMBER THREE WAS TO FIGURE OUT A WAY FOR YOU TO APPROVE YOUR CONSTRUCTION BUDGET AS A COST LIMITATION LIKE YOU DO WITH THE ARCHITECT CONTRACT.

AND YOU BASICALLY SAY, OK, HERE'S OUR HERE'S OUR BUDGET.

HERE'S OUR COST LIMITATION FOR CONSTRUCTION.

WE WANT TO HIRE THAT'LL COME ON AND HELP US DESIGN DURING THE DESIGN PHASE AND HELP US PLAN AND GET THESE THINGS MOVED.

SO YOU COULD ACTUALLY ISSUE THEM A CONTRACT WHEN YOU DECIDE WHO YOU WANT TO HIRE, THAT ESTABLISHES THAT CONSTRUCTION COST LIMITATION, WHICH SHOULD BE YOUR BUDGET, AND THEN THEY GO AND DESIGN IT. AND THEN ANOTHER RECOMMENDATION IN HERE WHERE THEY NEED TO KEEP YOU POSTED EVERY MONTH ON WHAT THE SCOPE THAT THEY'RE PLANNING.

I THINK TRUSTEE FOREMAN AND HAD A LOT OF QUESTIONS ABOUT, WELL, WHY AM I NOT HEARING THIS UNTIL THE LAST MINUTE WHEN THEY PRESENT A GMP? THAT SHOULD NEVER HAPPEN.

YOU SHOULD KIND OF ALWAYS KNOW, YOU KNOW, WHERE THEY ARE, WHERE THEY'RE THINKING, WHAT THE BUDGET'S GOING TO BE ON A MONTHLY BASIS UP UNTIL THE POINT WHEN THE GMP IS SUBMITTED.

AND THAT GMP, IF IT'S DONE RIGHT, WILL COME IN UNDERNEATH THE CONSTRUCTION COST LIMITATION, WHICH AGAIN, SHOULD SPEED UP THAT WHOLE PROCESS.

IF EARLY ON BEFORE THE GMPS ARE SUBMITTED, THEY SEE WE'LL PAY BASED ON OUR DESIGN AND BASED ON THE SCOPE THAT YOU WANT.

LOOKS LIKE WE NEED MORE MONEY.

THEY SHOULD COME TO YOU BEFORE AND GET YOU TO APPROVE MORE MONEY AND THE SCOPE SO YOU CAN DO IT BEFORE IT'S LIKE A LAST MINUTE THING BECAUSE OTHERWISE IT HOLDS UP.

IT WOULD HOLD UP THE SCHEDULE, IMPACTS OF COST, ETC., ETC..

SO WE'RE TRYING TO HELP, YOU KNOW, YOU FIGURE OUT A WAY TO STREAMLINE THAT FOR THE FUTURE. SO THAT'S WHAT.

NUMBER THREE WAS INCORPORATING THE CCL, YOU ALREADY DO THAT RIGHT NOW IN YOUR IN YOUR ARCHITECT AGREEMENTS.

SO IT'S REALLY JUST A PLAY BECAUSE THE ARCHITECT AND THE TOGETHER DURING THE PRE-CONSTRUCTION PHASE KIND OF DESIGN AND BRING FORWARD A PLAN WITHIN YOUR BUDGET OR WITHIN A BUDGET.

YOU'RE GOING TO PROVE THAT THEY NEED TO INCREASE OR DECREASE.

FINDING NUMBER FOUR. SO IF YOU DID THAT, THE GMP AMENDMENTS RIGHT NOW, YOUR BOARD POLICY AND YOUR PROCEDURES AND YOUR CONTRACT, ALL WHICH BASICALLY SAYS I KNOW THE BOARD'S VERY INVOLVED AND NEEDS TO BE INVOLVED IN PROVIDING OVERSIGHT.

WE'RE JUST TRYING TO GET THAT MOVED UP FOR YOU.

BUT THE GMP AMENDMENTS COMING TO YOU AND GETTING OFFICIALLY APPROVED BY THE BOARD ALSO, YOU KNOW, REQUIRES A LOT OF TIME AND LEAD TIME AND WHAT HAVE YOU.

IF YOU ALREADY APPROVED THE WHOLE CONSTRUCTION LIMITATION AND THE GMPS ARE BUILDING UP TO THAT, IT'S WITHIN THAT THE CODE ALLOWS YOU TO DELEGATE THE APPROVAL OF GMPS DOWN TO WHERE YOU WANT TO DELEGATE TO THE SUPERINTENDENT.

HE COULD HE COULD DELEGATE IT DOWN TO THE MAKE ADMINISTRATION RESPONSIBLE FOR THE FORMAL APPROVAL. AND THEN THAT SHOULD SPEED UP.

AND THEN, YOU KNOW, YOU'LL KNOW WHAT YOU'RE SPENDING BECAUSE THEY'RE GOING TO BE BRIEFING YOU EVERY MONTH ON HOW IT'S GOING.

SO JUST A WAY TO MAKE THIS THING WORK A LOT BETTER FOR YOU IF YOU DECIDE TO USE IT.

TO ME, THE WHOLE REASON FOR GOING EFFECTIVELY, VALUE ENGINEERING, CONSTRUCT-ABILITY LIFECYCLE COSTS AND ALL THAT.

[00:15:05]

BUT RIGHT NOW, THAT'S NOT WORKING REAL WELL FOR YOU BECAUSE OF THE TIMING ON WHAT'S GOING ON. SO THEY DON'T GET STARTED REALLY UNTIL IT'S PRETTY WELL, ARCHITECT WAS WORKING ON MOST OF THESE GOT OFFICIALLY HIRED. SO YOU DIDN'T REALLY GET THAT MAXIMUM BENEFIT, BUT IT IS WHAT IT IS AT THE MOMENT. SO TRYING TO STREAMLINE OR MAKE THAT BETTER FOR YOU IN THE FUTURE.

SO THAT WAS FOUR.

FIVE BASICALLY TALKING ABOUT YOU GETTING THE MONTHLY UPDATES THAT I JUST MENTIONED.

AND I THINK I'VE TALKED TO CHIEF THOMPSON ABOUT THAT.

AND IT'S LIKE, YOU KNOW, THAT SHOULD BE SHOULD BE DOABLE.

YOU KNOW WHAT SCOPE WISE, ET CETERA, MAKES THEM GIVE YOU A FORMAL PRESENTATION SO YOU KNOW WHERE YOU ARE AND WON'T BE SURPRISED AT THE LAST MINUTE.

NUMBER SIX. JUST A, WELL, THE TO USE A SECURE BIDDING SYSTEM AND TAKE SEALED BIDS AND LIKE YOU DO LIKE IT AT DISD YOU REQUIRE ON BIDDING ON CSPS.

THEY BRING IN A HARD COPY BID BY A CERTAIN TIME, AND THEN IT'S THE OPENING OF THAT BID AT THAT TIME. WELL, THEY'VE BEEN DOING IT INFORMALLY, THEY'RE ALLOWED TO DO IT INFORMALLY SO THAT TRADE CONTRACTORS CAN SUBMIT THEIR BIDS BY EMAIL INTO THE AND THEN YOU SIT DOWN AND SAY, ALL RIGHT, WE'RE GOING TO OPEN THEM ALL UP.

BUT IT'S NOT REAL SECURE.

AND SO WE'RE RECOMMENDING THERE ARE NICE SYSTEMS OUT THERE AND THEY ALL HAVE THEM.

I THINK TURNER IS NOW USING IT, BECK IS USING IT, THEY USE IT ON A SECOND GMPS THAT ARE COMING IN TO.

SO THAT. THE SUBS SUBMIT THEIR BIDS ELECTRONICALLY AND IT GOES IN AN ELECTRONIC LOCK BOX, IF YOU WILL, AND NOBODY CAN LOOK AT THAT BID UNTIL IT'S OFFICIALLY OPENED AT THE OFFICIAL BIDDING TIME. AND THAT SHOULD MAKE THE SUBS A LOT HAPPIER WITH THE INTEGRITY OF THE BIDDING AND HOPEFULLY, YOU KNOW, SERVE YOU BETTER AS WELL.

SO WE GOT THAT ON BOARD AND FIXED.

JUST WANT TO MAKE THAT A REQUIREMENT, THOUGH.

IN FUTURE DEALS. SO THAT WAS SIX, SEVEN WAS.

THE PRACTICE OF GETTING BID BONDS, WE SUGGESTED THIS IN OUR LAST AUDIT REPORT, WHERE YOU GET A BID BOND FROM THE FROM THE SUBMIT THEIR QUALIFICATIONS TO YOU, SO THEY BASICALLY SAID WE CAN BE BONDED, WE CAN BOND YOU FOR THE WHOLE AMOUNT OF YOUR BUDGET OF THE CONSTRUCTION.

SO THAT'S WHAT A BID BOND DOES AND BID BONDS DON'T NORMALLY COST ANY MONEY TO ANYBODY.

IT'S JUST A SURVEY. IF THEY'RE BONDABLE, THEY HAVE RELATIONSHIP WITH THE BONDING COMPANY THAT BID BOND JUST BASICALLY TELLS YOU THEIR BOND AND IT'S A GOOD THING TO GET.

SO WE HAD THAT, I THINK, IN THE LAST REPORT.

BUT THIS ONE NOW WE'RE SAYING WHEN THEY GO OUT TO GET SUBCONTRACTS THAT WE REQUIRE SUBCONTRACTS OVER A CERTAIN DOLLAR AMOUNT, FIVE HUNDRED THOUSAND FOR TO ALSO PROVIDE BID BONDS. IT'S JUST EXTRA THING THAT BEST PRACTICE IS PEOPLE DO IT, BUT THEY DON'T ALWAYS I MEAN, FOR EXAMPLE, I DON'T THINK SO FAR ON THE GMPS THEY DID NOT REQUIRE BID BONDS FOR THE SUBS. WE RECOMMENDED THAT IN TIME FOR TURNER TO DO IT ON THEIR NEXT GMP.

SO THAT SHOULD WORK, BUT JUST MAKE THAT A REQUIREMENT.

SO THAT IS SEVEN, EIGHT.

EIGHT THERE IS CONVENTIONAL INSURANCE WHERE THE CONTRACTORS AND SUBCONTRACTORS BUY ALL THEIR OWN WORKERS COMP INSURANCE.

THEY BUY ALL THEIR OWN GENERAL LIABILITY INSURANCE, THE WHATEVER INSURANCE YOU REQUIRE.

THAT'S CONVENTIONAL INSURANCE.

THEY BUY IT. YOU END UP PAYING FOR IT AS A COST ON IT BECOMES PART OF THE COST OF THE SUBCONTRACTORS DEAL.

AND IT'S. OH, I DON'T KNOW, RANGE, WHAT THAT MIGHT COST YOU.

CONVENTIONAL INSURANCE.

TWO TO THREE PERCENT TOTAL INSURANCE COSTS BURIED WITHIN YOUR CONSTRUCTION BILL, TWO TO THREE PERCENT, MAYBE MORE, SAY THREE AND A HALF TO FOUR PERCENT PERHAPS.

SO AN OWNER CONTROLLED INSURANCE PROGRAM IS WHERE DISD WOULD GO OUT AND FIND AN INSURANCE COMPANY THAT WOULD PROVIDE ALL THE INSURANCE FOR ALL THE SUBCONTRACTORS AND ALL OF THE WHATEVER DO YOU HAVE TO KNOW THE HOW TO HOW TO PUT THAT DEAL TOGETHER.

BUT I'VE WORKED WITH OTHER BIG CLIENTS WHO ARE BIG SPENDERS.

I'M THINKING OF YOUR NEW BOND PROGRAM COMING UP IN THE FUTURE.

IF YOU'RE GOING TO SPEND THREE BILLION DOLLARS OR WHATEVER IT IS ON CONSTRUCTION, YOU'RE BIG ENOUGH TO BE THINKING ABOUT HAVING AN I THREW UP SOME NUMBERS TO BOB, AND JUST IF YOU TALK TO THE INSURANCE COMPANY, THEY'LL TELL YOU EITHER IT'S GOING TO BE A BETTER PRODUCT AND IT WON'T COST YOU ANY MORE.

THAT'S ONE THING THE INSURANCE COMPANIES WILL SAY OR THE OTHER WILL SAY, WELL, IF YOU DO IT RIGHT, IT SHOULD SAVE YOU MONEY.

NOW, MIGHT IF YOU JUST TAKE THE NUMBERS I THREW OUT, IF YOU COULD BUY OWNER CONTROL INSURANCE PROGRAM FOR TWO PERCENT, TWO PERCENT OF YOUR CONSTRUCTION COSTS, WHEN CONVENTIONAL INSURANCE IS COSTING YOU THREE OR FOUR, THAT'S THE SAVINGS YOU WOULD GET.

THAT'S A LOT OF MONEY ON ALL THE PROJECTS YOU'RE GOING TO BE DOING THAT FUTURE.

SO THAT'S WHAT THE BIG PEOPLE DOING, SERIAL BUILDING, YOU KNOW, SPENDING A LOT OF MONEY

[00:20:04]

IN CONSTRUCTION. MOST OF THEM ARE DOING THAT.

AND FOR EXAMPLE, THE UNIVERSITY OF TEXAS HAS HAD AN THAT WORKS WELL FOR THEM. AND THAT'S KIND OF THE TYPE OF THING I'D BE RECOMMENDING FOR YOU TO LOOK AT BIG ENOUGH WITH WHAT YOU'RE SPENDING.

NUMBER NINE. SO I DIDN'T ACTUALLY WANT TO PUT THIS ONE IN THERE BECAUSE I AM A CONSULTANT AND I DO THIS SORT OF THING. BUT TALKING WITH INTERNAL AUDITS LIKE, WELL, YOU REALLY DON'T HAVE ANYBODY TO HELP YOU REVIEW PAYMENT APPLICATIONS AND GMPS AND CHANGE ORDERS AND THINGS FROM A CONSULTING BASIS GOING FORWARD.

SO YOU MIGHT WANT TO HAVE A DEDICATED RESOURCE.

I THINK AUDIT. HE SAID, I THINK WE'RE GOING TO NEED SOMEONE TO HELP US DO GMP REVIEWS, WHICH I'VE DONE SOME. BUT WE NEED TO CONTINUE TO DO THAT.

AND YOU'RE GOING TO WANT SOMEBODY TO DO THAT WHO HAS EXPERTISE, ET CETERA.

THAT'S ALL WE'RE SAYING, IS YOU WANT TO HAVE SOME SORT OF DEDICATED RESOURCE, INTERNAL OR EXTERNAL, TO PROVIDE THAT SUPPLEMENT TO THE DISTRICT.

AND THAT WAS IT. SO I'M OPEN FOR QUESTIONS AND.

OUTSTANDING. SO I'LL OPEN UP FOR QUESTIONS TRUSTEE MARSHALL AND THEN TRUSTEE FOREMAN.

YEAH, THANK YOU FOR YOUR REPORT AND THANK YOU FOR ALL YOUR WORK ON THIS.

I APPRECIATE YOU WALKING US THROUGH THIS.

BUT TO BE HONEST, MY QUESTIONS ARE NOT FOR YOU.

I WAS GOING TO INVITE DWAYNE TO COME UP AND JOIN US.

I KNOW THERE'S BEEN A LOT OF ATTENTION ON THIS PARTICULAR AUDIT AND SOME INTEREST FROM SOME OF MY FELLOW COLLEAGUES ON THE BOARD.

AND SO FOR THE BENEFIT OF THOSE THAT AREN'T GOING THROUGH ALL THESE DOCUMENTS IN DETAIL AND HAVEN'T READ THE REPORTS, I JUST WANTED TO HIGHLIGHT THE MANAGEMENT RESPONSE TO THE AUDIT AT THE BACK OF THE DOCUMENT ON ALL NINE OF THESE RECOMMENDATIONS, YOU STATED THAT YOU AGREE WITH THE RECOMMENDATION AND THAT YOU'RE TAKING SOME STEPS TO ADDRESS THOSE.

SO COULD YOU JUST SPEAK TO THAT AT A HIGH LEVEL ABOUT.

ITEMS THAT HE'S IDENTIFIED AND OBVIOUSLY INTERNAL AUDIT WAS INVOLVED WITH THAT.

BUT WE MET WITH HIM.

HE MADE SUGGESTIONS. WE MADE THOSE CHANGES.

WE, YOU KNOW, IN SOME CASES HAD TO RENEGOTIATE WITH VENDORS AND IDENTIFY THINGS.

AND SO AS WE WENT THROUGH THESE ITEMS THERE ARE THINGS THAT HE'S SUGGESTING THAT WE THINK ARE HAVE A VALUE ADD FOR US IF WE IN THE FUTURE.

AND SO WE'LL BE INCORPORATING THOSE.

AND SO, YES, WE DID AGREE WITH ALL THOSE ITEMS. AND SO WE'RE GOING TO I'M GOING TO HAVE A CONVERSATION WITH THEM ABOUT THEIR FAMILIARITY WITH THAT. AND IF THEY ARE NOT FAMILIAR OR DON'T FEEL CAPABLE OF THAT, THEN WE'LL BE REACHING OUT TO THE UNIVERSITIES THAT RICH HAS MENTIONED AND SEEING IF THERE'S SOME WAY WE CAN GET SOME ASSISTANCE TO AT LEAST INVESTIGATE IT.

IF IT'S IF IT'S SOMETHING THAT WE CAN DO THAT IS BETTER AND AT LEAST BREAK EVEN, THEN WE'LL CONSIDER IT.

MIC] THAT'S CORRECT.

THANK YOU. OH, I HAVE SEVERAL QUESTIONS REGARDING THE RECOMMENDATIONS, IF YOU DON'T MIND.

AND I'LL JUST WORK MY WAY BACKWARDS.

SO WE'LL START AT NUMBER NINE WHERE YOU TALKED ABOUT REVIEW PAYMENT APPLICATIONS AND THOSE KINDS OF THINGS.

DO YOU PERCEIVE THAT AS AN ADDITIONAL COST TO ARE WE ALREADY DOING THAT WITH CSP? IF THAT'S A QUESTION FOR ME, YES, EXCELLENT QUESTION ON THE CONTRACTS ARE COST PLUS FEE WITH A GUARANTEED MAXIMUM PRICE AND THEY HAVE CONTINGENCY BUILT INTO THEM, YOU KNOW, FIVE PERCENT OF THE OWNER CONTINGENCY, YOU HAVE IN ANOTHER PERCENT FOR THE CONTRACTOR CONTINGENCY ANYWAY.

SO WHATEVER THEY BILL YOU BECOMES YOUR COST.

AND THE BEST PRACTICE OUT THERE FOR ANY OWNERS USING RESOURCES TO AUDIT THE BILLING FROM THE CONTRACTOR, AUDIT THEIR RECORDS TO MAKE SURE THEIR BILLING ARE COMING IN ACCURATE.

SO, YES, YOU WOULD YOU WOULD SPEND MONEY ON RESOURCES.

THAT'S AN ADDITIONAL COST TO THE DISTRICT FOR CONSTRUCTION BASED ON WE ALSO HAVE 10 PERCENT CONTINGENCIES FOR CSP.

IT'S VERY THAT RESOURCE IS THAT CORRECT?

[00:25:04]

YES, IT'S MY UNDERSTANDING ON CSP HAS CONTINGENCY IN IT, AND YOU PROBABLY SHOULD BE DOING SOME AUDITING ON THE CSP CONTRACTS AS WELL, OUR COMPANY AND OTHER COMPANIES LIKE MINE PROVIDE THESE KINDS OF SERVICES TO AUDIT, WHICH ACTUALLY INVOLVES AUDITING THE BOOKS AND RECORDS. IT'S A WHOLE SPECIALTY KIND OF AUDIT.

I UNDERSTAND THAT.

I'M JUST TRYING TO GET CLARITY ON WHAT ADDITIONAL COSTS WE MIGHT BE INCURRING.

SO THAT'S AN ADDITIONAL COST.

LET'S GO TO NUMBER EIGHT.

NUMBER EIGHT. YES, PLEASE.

WE TALK ABOUT THE CONVENTIONAL INSURANCE AND MAYBE US DOING SO HOW DO WE HANDLE INSURANCE WITH CSP? ACTUALLY, THE INSURANCE FOR CSP.

OR BUT THAT'S NOT MY QUESTION.

HOW DO YOU HANDLE IT FOR IT'S CONVENTIONAL. OK, AND SO DOES THE DISTRICT HANDLE THE INSURANCE OR DOES THE CONTRACTOR? TRUSTEE FOREMAN, IF IT'S IF IT IS CONVENTIONAL INSURANCE IN THE CONTEXT, AS I MENTIONED, THE CONTRACTORS BUY ALL THE INSURANCE.

WHAT THE DISTRICT DOES IS THEY MAKE SURE THAT THE CONTRACTORS AND SUBCONTRACTORS BUY ALL THE INSURANCE THAT'S REQUIRED BY THE CONTRACT.

RIGHT. SO YOU ARE INSURED.

YEP.

THE DISTRICT HAS NOT VENTURED INTO OWNER CONTROL INSURANCE, IS THAT CORRECT? THAT'S CORRECT, AS FAR AS I KNOW, YOU HAVE NOT DONE OWNER CONTROLLED, WE BELIEVE IT'S A IT'S A GOOD THING TO LOOK AT.

IF YOU DO IT RIGHT, IT CAN CAN BASICALLY MAKE YOUR CONSTRUCTION PROGRAM A LOT MORE COST EFFECTIVE IF DONE RIGHT.

IT'S NOT AN AUTOMATIC. YOU HAVE TO KNOW WHAT YOU'RE DOING.

I DO GET THAT.

ALL I'M DOING IS IDENTIFYING WHAT I THINK ARE DIFFERENCES.

RIGHT. NUMBER 7.

SO YOU TALKED ABOUT BID BONDS WITH THE SUBCONTRACTORS.

DOES THE SUBCONTRACTORS PROVIDE BID BONDS FOR CSP? TRUSTEE FOREMAN THAT'S ACTUALLY IN THE CONTROL OF THE CONTRACTORS OF THE GENERAL CONTRACTORS. THEY CAN ELECT TO REQUIRE THEM TO GIVE BID BONDS AND OR THEY COULD DECIDE NOT TO. THAT'S TOTALLY UP TO THE CONTRACTORS.

IT'S CONSIDERED A BEST PRACTICE BECAUSE YOU WANT TO HAVE PEOPLE GIVING.

IT HELPS GET MORE VALID BIDS.

IT HELPS CONTRACTORS FROM WITHDRAWING BIDS, ETC..

SO IT'S JUST.

ONE OF THE THINGS WE DO KNOW IS, IS THAT WITH CSP, QUITE OFTEN THE CONTRACTOR PUTS UP THE BOND FOR THE WHOLE PROJECT.

CORRECT? THAT IS CORRECT, ACTUALLY, FOR ALL CONSTRUCTION PROJECTS THAT YOU HAVE.

OK, SO. YOU HAVE THEY HAVE YOU HAVE TO BOND THE WHOLE PROJECT AT THE I KNOW, I KNOW.

BUT WHAT YOU ARE ASKING ON NUMBER SEVEN IS, THAT THE SUBCONTRACTORS PROVIDE BID BONDS. YES.

TRUSTEE FOREMAN. THAT'S CORRECT.

ONLY BID BONDS.

THAT PIECE? YES MS. FOREMAN CAN YOU KNOW, HE'S TRYING TO ANSWER THE QUESTION.

AND SO WE YOU'RE LIKE TALKING OVER EACH OTHER.

SO I DO GET HE'S TRYING TO ANSWER THE QUESTION, BUT HE'S ANSWERING MORE THAN WHAT I'M ASKING. AND I'M PRETTY STRAIGHTFORWARD IN REGARDS TO MY QUESTION.

SO IF I JUST GET A SIMPLE ANSWER.

THEN THAT WILL HELP ME MOVE ON, BECAUSE I'M YOU KNOW, I'M I CAN BE KIND OF LENGTHY AND I KNOW YOU GUYS DON'T WANT ME TO BE THAT WAY, SO I'M JUST TRYING TO ASK SPECIFIC QUESTIONS AND GET SPECIFIC ANSWERS.

AND I APPRECIATE THAT VERY MUCH.

BUT SOME OF US ALSO WANT TO HEAR.

BUT SOME OF US ALSO WANT TO HEAR HIS FULL ANSWER, BECAUSE I ACTUALLY REALLY CURIOUS ABOUT HIS WHOLE ANSWER.

I'LL LET THE ADMINISTRATION ANSWER NOW.

OK, ADMINISTRATION, DO YOU OR DO YOU NOT REALIZE THAT ASKING FOR BID BONDS ON FOR ALL THE SUBCONTRACTORS ON COMMUNITY? YEAH.

SO WHEN WE WERE PRESENTED WITH THAT QUESTION, WE ASKED THEM TO

[00:30:03]

THEY SUGGESTED A 500,000 DOLLAR LIMIT.

SO IT WOULD BE ANY CONTRACTOR IN EXCESS THAT WAS BIDDING ON A ON A TRADE IN EXCESS OF HALF A MILLION. SO I WOULD JUST STRONGLY SUGGEST THAT YOU TALK TO THE HISPANIC AND THE AFRICAN AMERICAN CONTRACTING ORGANIZATION, SO THERE IS AND ASIAN, BY THE WAY, I FORGOT ABOUT THEM, FORGIVE ME.

SO THAT THERE'S A CLEAR UNDERSTANDING BECAUSE WHAT WE DON'T WANT TO DO AND WHAT I'M CONCERNED ABOUT WITH AND I DON'T WANT TO DO THAT.

THEN ON NUMBER SIX, YOU TALKED A BIT ABOUT CONTRACTORS, BUT DOING IT INFORMALLY, THEY SAID THEY SUBMIT THE BID ELECTRONICALLY FOR YOUR SUBS, OR FOR JUST THE WHOLE BID? YES, THE QUESTION IS, WAS IT A SUB OR THE WHOLE SO THAT WAS RELATED TO THE TRADE CONTRACTORS ONLY AND MY RECOMMENDATION SO WHEN THE SUBCONTRACTORS SUBMIT THEIR BIDS, THEY'RE SUPPOSED TO BE CONFIDENTIAL, SEALED BIDS TO GO INTO THE RECOMMENDING TO USE THAT ELECTRONIC SEALED BIDDING SYSTEM AS OPPOSED TO JUST EMAILING THEM IN THE WAY IT'S OFTEN DONE.

AND IT'S JUST. SO DOES THE? DOES THE HAVE TO BID THE SUB CONTRACTS? CAN YOU REPEAT THE QUESTION, PLEASE? DOES THE IF I UNDERSTAND CORRECT, YES, PER CODE, ALL OF THE TRADE PACKAGES, ALL THE WORK THAT WILL GO TO TRADE CONTRACTORS NEEDS TO BE ADVERTISED.

IT NEEDS TO BE PUBLICLY BID AND BIDS REQUIRED TO COME IN, IN A SEALED FASHION AND THEN OPEN BY THE SO THAT IS REQUIRED BY CODE, CORRECT.

ON ALL MAJOR TRADES.

THERE ARE PROBABLY MINOR THINGS WHERE, YOU KNOW, A CLEANING CONTRACT, FOR EXAMPLE, FOR TWENTY FIVE THOUSAND DOLLARS MAY NOT FIT IN THAT.

BUT ANY CONSTRUCTION TRADE CONTRACTORS OF ANY SIZE WOULD BID THAT AND THAT'S THE WAY THEY DID IT ON ON ALL THE GMPS.

AND IT LOOKED LIKE THEY HAD VERY GOOD PARTICIPATION FROM THE MBW COMMUNITY AS WELL.

THEY ALL OF THEM ARE REPORTING AT LEAST BACK ON THEIR TWO BIG ONES ARE REPORTING AT LEAST 30 PERCENT, 35 PERCENT, WHATEVER THE GOAL IS, THEY'VE GOT PEOPLE SIGNED UP AT ALL THE LEVELS TO TO MEET YOUR ASPIRATIONAL GOALS.

SO SEEMED LIKE THAT WORKED WELL WITH THE BIDDING THAT THEY TOOK.

WELL, YOU PROBABLY DON'T KNOW IT, BUT IN SOME CASES, WE SURPASSED OUR GOALS IN MANY, MANY CASES ON MWB.

THAT'S TRUE. I'M THINKING YOU CAN HEAR YES. YES, WE SURPASSED IT.

SO NUMBER FIVE, YOU TALKED A LITTLE BIT ABOUT MONTHLY UPDATES.

WHAT DO YOU FORESEE THAT MONTHLY UPDATE LOOKING LIKE? I BELIEVE THAT THE ADMINISTRATION AND THE CONSTRUCTION DEPARTMENT REPRESENTATIVE IS RESPONSIBLE FOR YOUR PROJECTS, THE TOGETHER A BRIEFING, PERHAPS A POWERPOINT DOCUMENT, SOME DOCUMENT TO YOU THAT WOULD JUST SAY, HERE'S THE BUDGET THEY APPROVED.

HERE'S OUR CONSTRUCTION COST LIMITATION.

HERE'S THE SCOPE YOU APPROVED.

HERE'S BASICALLY WHAT WE'RE ESTIMATING THE COST IS GOING TO BE.

THIS IS A SCOPE THAT WE'RE PLANNING AND THEY ADVISE YOU OF ANY PLUSES AND MINUSES ON SCOPE OR ANY SORT OF, YOU KNOW, BUDGET IMPACT THAT THAT MIGHT BE HAPPENING PLUS OR MINUS.

SO, YEAH, SOMETHING TO KEEP YOU POSTED MONTHLY ON HOW THEIR DESIGN IS COMING TOGETHER AND THE ESTIMATING OF THE PROBABLE COST COMING TOGETHER.

SO THAT YOU KNOW THAT AS THE PROJECT IS BEING DESIGNED AND PRE-CONSTRUCTION WITH THE CONTRACTOR. THANK YOU.

ON NUMBER FOUR, YOU TALKED ABOUT THE GMP AMENDMENTS.

AND ASKING THAT THE BOARD DELEGATE APPROVAL.

TO THE SUPERINTENDENT OR SOMEONE WHO THE SUPERINTENDENT MIGHT DELEGATE THAT TO.

THAT'S CORRECT, TRUSTEE FOREMAN, YOU KNOW, AS YOU KNOW, ACCORDING TO CODE, YOU KNOW THAT THE GMP LEVEL. BUT BOARD CAN DELEGATE TO ADMINISTRATION THOSE GMP APPROVALS.

[00:35:02]

BUT, YOU KNOW, WE DON'T WANT YOU TO BE LEFT OUT AT ALL.

YOU NEED TO KNOW WHAT'S GOING ON.

BUT JUST TO SPEED UP THE PROCESS.

I KNOW YOU ONLY MEET PERIODICALLY.

WE'RE LOOKING TO SAY, WELL, LOOK, IF THERE'S IF THERE'S SOMETHING WE CAN APPROVE NOW AND GET IT DONE TO SPEED UP THE WHOLE PROCESS TO GET THESE KIDS INTO THE SCHOOLS EARLIER, GET THE JOB DONE EARLIER, WHAT'S GOING TO SAVE EVERYBODY MONEY.

AND ANYWAY, SO THAT'S THE WHOLE GOAL OF THAT.

AS LONG AS THEY'RE WITHIN THE BUDGET THAT YOU APPROVED AND THE SCOPE YOU APPROVED, IF YOU DELEGATE THAT, IT SHOULD BE ABLE TO GIVE YOU A LOT MORE FLEXIBILITY TO DO THE JOB EFFECTIVELY. SO IF YOU SAW THE LAST.

THE LAST ARE YOU TALKING ABOUT THE CORE CONSTRUCTION? NO. OH, NO, NO.

YES, THAT WAS THE ONE.

YES, I WAS VERY CONCERNED ABOUT THAT.

THAT WAS THAT WAS THE ONE THAT WAS ON TJ KERRY.

AND I WAS WHEN I FIRST GOT INVOLVED, I STARTED TELLING EVERYBODY, I SAID, WELL, YOU KNOW, IF YOU THINK YOU'RE GOING TO BE OVER, YOU NEED TO START TALKING TO THE BOARD NOW ABOUT WHAT YOU THINK IT'S GOING TO BE.

AND I, IT SEEMED TO ME YOU DIDN'T KNOW UNTIL THE LAST MINUTE, WHICH IS WHY I'M SAYING I'M RECOMMENDING THIS. WELL, THE OVERAGE WASN'T JUST BASED ON WHAT WE HAD APPROVED, THE OVERAGE WAS BASED ON THINGS ADDED ON.

SO THAT TAKES ME TO WHY I HAVE SOME CONCERNS ABOUT DELEGATING THAT AUTHORITY WITHOUT KNOWLEDGE TO THE BOARD ON THE PARTICULARLY THE GNP THREE, WHERE THE BULK OF THE MONEY IS GOING TO BE ADDED TO THE CONTRACT.

SO LET'S NUMBER THREE.

SO, TRUSTEE FORMAN, YOU'RE ALREADY PAST 10 MINUTES JUST LETTING YOU KNOW.

OK, I'LL JUST I'LL JUST DO THREE AND THEN I'LL WRITE AND ASK THEM THE OTHERS.

WHEN YOU TALKED ABOUT APPROVED CONSTRUCTION BUDGET WITH COST LIMITATIONS.

HOSTED MONTHLY UPDATE.

YES. WHAT IF I COULD EXPLAIN JUST FOR A MINUTE, HALF A MINUTE.

SO WHEN YOU APPROVE A BUDGET AT A BOARD LEVEL EARLY ON, LET'S JUST SAY IT'S 100 MILLION DOLLARS THAT'S GOING TO GO FOR VARIOUS PIECES.

IT'S GOING TO GO FOR SOFT COST, DESIGN COST TO PROGRAM MANAGEMENT COSTS THAT ARE GOING TO GO FOR FURNITURE AND FIX WHATEVER IT'S ALL BUT SOMEWHERE WITHIN THAT PIECE, THERE'S A CHUNK OF MONEY FOR CONSTRUCTION.

AND RIGHT NOW YOU'RE CALLING IT THE CONSTRUCTION COSTS LIMITATION.

THAT INCLUDES YOUR CONTINGENCY.

SO THAT NUMBER THAT YOU IDENTIFY WHEN YOU APPROVE THAT BUDGET IS A NUMBER I'M SUGGESTING YOU PUT INTO ALL YOUR HERE'S OUR CONSTRUCTION COST LIMITATION.

WE WANT YOU TO WORK WITH US TO DESIGN THIS AND BUILD THIS WITHIN THIS CONSTRUCTION COST LIMITATION. IT'S AN OFFICIAL TERM.

ALL THE BIG YOU KNOW, MOST OF THE BIG UNIVERSITIES THAT I WORK WITH ON CONTRACTS, THEY'RE DOING THAT.

AND IT SEEMS TO WORK WELL WITH THEM ON GETTING THE WHOLE PROCESS GOING, APPROVE.

AND YES, IF THEY'RE GOING TO GO OVER THAT CONSTRUCTION COST LIMITATION, THEY SHOULD BE REQUIRED TO COME TO YOU AND TALK TO YOU ABOUT THAT BEFORE IT EVER COMES TO A GMP.

SO NO ONE SHOULD BE ABLE TO APPROVE WITH GMP THAT GOES OVER YOUR CONSTRUCTION COST LIMITATION.

HOW WOULD CAN YOU REPEAT THE QUESTION, PLEASE? HOW WOULD CHANGE ORDERS PLAY INTO THAT? HOW WOULD WHAT ORDERS? OCCURRING BEFORE CHANGE ORDERS.

CHANGE ORDERS HAVEN'T EVEN OCCURRED AT THIS POINT.

THIS IS THIS IS IN THE DESIGN STAGE, IN THE DEAL.

NOW, LET'S SAY YOU HAD 100 MILLION DOLLAR BUDGET FOR A CONSTRUCTION COST LIMITATION AND THEY CAME TO YOU AND SAID, WELL, YOU KNOW, WE REALLY THINK YOU OUGHT TO ADD X TO THIS SCHOOL. YOU SHOULD ADD A NEW FOOTBALL FIELD OR WHATEVER IT MIGHT BE.

AND YOU WANT TO SPEND FIVE MILLION DOLLARS TO DO THAT.

AND IT'S NOT IN THE SCOPE IS NOT IN THE BUDGET.

THEY WOULD COME TO YOU EARLY ON AND GET YOU TO INCREASE THE CONSTRUCTION COST LIMITATION.

THAT'S THE WAY THE ARCHITECT AGREEMENT IS WRITTEN AND THAT'S THE WAY THE AGREEMENTS ARE WRITTEN, THAT THEY NEED TO COME TO YOU AND BRING TO YOUR ATTENTION ANYTHING LIKE THAT, GET YOUR APPROVAL BEFORE IT SHOWS UP IN A GNP LATER.

THAT SHOULD NOT HAPPEN. SO WE'RE TRYING TO HELP YOU THERE.

ALL RIGHT, I HAVE MORE QUESTIONS, BUT MY TIME IS UP, SO THANK YOU.

THANK YOU VERY MUCH, TONI, CHRIS, ANY QUESTIONS? ALL RIGHT. WELL, I HAD TO HAVE ONE THING.

PLEASE OF COURSE. THIS IS JUST FROM MY OWN KNOWLEDGE, BECAUSE IT SOUND LIKE THE TRANSITION FROM, YOU KNOW, CSP TO SO THIS MIGHT NOT BE A QUESTION FOR YOU, BECAUSE I DON'T KNOW IF IT WAS WITHIN THE SCOPE OF YOUR ASSESSMENT.

BUT, MR. THOMPSON, YOU KNOW, WHEN YOU LOOK AT INTERNAL RESOURCES, I MEAN, YOU LOOK YOU

[00:40:06]

KNOW, YOU KIND OF ASSESS, YOU KNOW, YOUR BENCH STRENGTH AND SCOUT SKILLS.

DO WE FEEL THAT WE HAVE THE KNOWLEDGE TO EFFECTIVELY MANAGE, YOU KNOW, MAKE SURE THAT WE'RE GETTING THE FULL BENEFITS OF IT? SO. WE HAVE THE CAPABILITY AND THE CONSTRUCTION SIDE FOR SURE, AND THERE WERE SOME TIMING ISSUES WHEN THESE STARTED UP THAT THAT CAUSED US NOT TO GET THE FULL BENEFIT.

AND THEN AS REFLECTED ON THE RECOMMENDATION, NUMBER NINE, WE ARE PLANNING ON HAVING SOME ADDITIONAL RESOURCES FROM THE REVIEW PROCESS IF WE EVER HAVE ANOTHER FUTURE. SO I THINK ALL THOSE TOGETHER COMBINED TO GIVE US THE RESOURCES THAT WE NEED TO IF WE WERE EVER TO DO ADDITIONAL OK, THAT'S AWESOME, SO THANK YOU.

REALLY APPRECIATE. THANK YOU SO MUCH.

YOUR WORK AND HELPING US OUT ON THIS AND REALLY AND THANKS, DWAYNE, FOR FOLLOWING AND AGREEING TO THE RECOMMENDATIONS.

SO WE WILL NOW DO THE SECURITY AUDIT.

YES. OK, SO I GUESS WE'LL GO INTO CLOSED SESSION TO DO THE SECURITY AUDIT.

SO WHERE IS MY LITTLE CLOSED SESSION? SCRIPT. THANK YOU.

OK, SO BECAUSE WE'RE GOING TO TAKE IT OUT OF ORDER, BECAUSE WE HAVE SOME FOLKS HERE, SO THE BOARD WILL NOW RETIRE TO CLOSED SESSION.

THE PUBLIC AND STAFF ARE WELCOME TO STAY CONNECTED TO ZOOM WHILE THE BOARD LEAVES THE MEETING TO ATTEND THE CLOSED SESSION.

THE PUBLIC PORTION OF THE MEETING WILL RESUME AFTER CLOSED SESSION.

THE BOARD WILL RETIRE TO CLOSE SESSION PURSUANT TO TEXAS GOVERNMENT CODE SECTION FIVE FIVE ONE CONCERNING ANY AND ALL PURPOSES PERMITTED BY THE ACT, INCLUDING, BUT NOT LIMITED TO THE FOLLOWING SECTIONS.

FIVE FIVE ONE POINT SEVEN ONE TO SEEK THE ADVICE OF ITS ATTORNEY ABOUT PENDING OR CONTEMPLATED LITIGATION.

FIVE FIVE ONE POINT ZERO SEVEN FOUR TO DELIVER THE APPOINTMENT EMPLOYMENT EVALUATION, REASSIGNMENT DUTIES, DISCIPLINE OR DISMISSAL OF THE PUBLIC OFFICE OR EMPLOYEE.

FIVE FIVE ONE POINT ZERO SEVEN SIX TO DELIBERATE REGARDING THE SECURITY DEVICES OR SECURITY AUDITS. ONE THE DEPLOYMENT OR SPECIFIC OCCASIONS FOR IMPLEMENTING OR SECURITY PERSONNEL OR DEVICES OR A TWO SECURITY AUDIT.

SO THE TIME IS NOW 4:42 AND WE ARE IN CLOSED SESSION.

[6. CLOSED SESSION - The Board will retire to closed session pursuant to Texas Government Code Section 551 concerning the following sections:]

DO WE KNOW HOW LONG THIS IS GOING TO BE ROUGHLY.

FIVE MINUTES, OK, SO HOPEFULLY IT'LL BE JUST A FEW MINUTES AND WE WILL BE RIGHT BACK.

ALL RIGHT, SO THE TIME IS NOW 4:51 AND WE ARE BACK IN OPEN SESSION.

THE BOARD TOOK NO ACTION IN CLOSED SESSION.

SO NOW WE WILL CONTINUE WITH THE REPORTS, BOB? THANK YOU TRUSTEE FLORES.

THREE AUDITS WERE COMPLETED IN WHAT WE CALL THE CONTINUOUS AUDIT GROUP, GENERAL LEDGER RECONCILIATION WOULD BE THE FIRST.

WE LOOKED AT MATERIAL GENERAL LEDGER ACCOUNTS TO DETERMINE IF THEY'RE RECONCILED AND APPROVED ON AN APPROPRIATE TIME FRAME THAT COULD BE MONTHLY, QUARTERLY OR ANNUALLY.

WE IDENTIFIED SEVEN, MADE A RECOMMENDATION THAT MANAGEMENT AGREED WITH.

TRUSTEES. ANY QUESTIONS? CURIOSITY, WHAT'S THE CRITERIA FOR TIMELINESS THAT YOU GUYS USE WHEN YOU MAKE YOUR ASSESSMENT? SO WE RELIED ON THEIR SCHEDULE.

SO SOME COULD BE MONTHLY ACCOUNTS, SOME COULD BE QUARTERLY AND THEN, OF COURSE, ANNUAL, AND THAT WOULD BE BASED ON, YOU KNOW, ACTIVITY GOING THROUGH THERE, YOU KNOW, A YEAR END BALANCE THAT THEY JUST NEEDED TO LOOK AT.

SO I RELIED ON WHAT THEY HAD SET UP.

IF THEY HADN'T SET UP A SCHEDULE, WE WOULD HAVE RECOMMENDED THAT TOO.

OK. TRUSTEES ANY QUESTIONS? IF NOT, WE'LL MOVE ON TO THE NEXT ITEM EXPENDITURE.

EXPENDITURE CALLED IT AUDIT OF DISBURSEMENTS EXPENDITURES TO THE DISTRICT, WE PICKED A STATISTICAL SAMPLE AND TESTED FOR ACCURACY OF BACKUP TO SUPPORT THE EXPENDITURE, DETERMINE IF IT WAS PAID IN A TIMELY MANNER AND APPROVED APPROPRIATELY.

WE FOUND NO EXCEPTIONS IN THIS AUDIT.

OK, GREAT.

GREAT NEWS. OK.

NEXT ITEM.

THIRD AUDIT IN THIS GROUP WAS FOOD AND CHILD NUTRITION.

[00:45:05]

WE LOOKED AT PURCHASES AND OPERATIONS OF HOW THEY PROCURE AND THEN PAY FOR FOOD ITEMS. THIS ACTUAL ISSUE THAT WE IDENTIFIED HAD COME UP IN A PROCUREMENT AUDIT THAT WAS DONE PREVIOUSLY, SO WE REPEATED THE SAME ISSUE.

WE DIDN'T HAVE TO GET A SEPARATE RESPONSE, HAS TO DO WITH THE VOLUME OF TRANSACTIONS THAT GO THROUGH FOOD, CHILD NUTRITION SERVICES AND DIRECT DELIVERY TO 240 PLUS CAMPUSES FOR MILK, FOR DAIRY AND FRUIT.

WE HAVE ASK, YOU KNOW, IDEALLY, YOU HAVE THIS THREE WAY MATCH, YOU HAVE A PURCHASE ORDER AND A RECEIVING REPORT, AND THEN YOU CAN AUTOMATE THE PAYMENT.

DUE TO THE VOLUME AND THE DELIVERY AT ALL THE DIFFERENT SCHOOLS.

IT'S NOT CENTRALLY RECEIVED, SO IT FUNCTIONS SOMEWHAT DIFFERENTLY.

WE'VE ASKED THAT THEY LOOK AT DEVELOPING A SYSTEM THAT WOULD THEN UPLOAD ACCURATE INFORMATION. OR THE COMPLETE NOT TO ASSUME IT'S NOT THE COMPLETE INFORMATION INTO THE PURCHASE AND AP SYSTEM.

SO IT ALL TIES IT NICE AND NEAT.

IT'S NOT AN EASY FIX.

THEY'VE BEEN LOOKING AT IT AND RESEARCHING IT AND WE'LL HAVE TO JUST CONTINUE TO LOOK AT THE PROBLEM AND SEE WHAT THE BEST WAY WE CAN DO IT TO GET ALL THAT INFORMATION DIRECTLY INTO ORACLE.

AND MAYBE THAT'S AN INTEGRATION PROCESS FROM ALL THE SUBSIDIARY SYSTEM THEY'RE USING CURRENTLY. QUESTIONS.

ARE THERE ANY QUESTIONS, TRUSTEES? ALL RIGHT, NEXT.

ALL RIGHT, THE BIG AUDIT.

WE WORKED ON THIS IS THE 21 SCHOOLS WE VISITED FOR ACTIVITY FUNDS BEFORE WE DID OTHER STUFF, ISSUES CAME UP.

AND THIS IS NOT UNEXPECTED.

AND, YOU KNOW, EIGHT BROAD AREA, SEVEN BROAD AREAS.

I WON'T. I WON'T GO THROUGH EVERY SINGLE ONE, BUT THERE'S A TABLE THAT WE PUT THOSE ISSUES IN, AND I THINK THAT EXPLAINS THAT A LITTLE BIT BETTER.

TRAINING WHERE THEY DO THE TRAINING, THEY DO THE MONTHLY RECONCILIATIONS? HOW COMPLIANT ARE THEY WITH CASH HANDLING AND MAKING THE DEPOSITS DISPERSEMENT, SUPPORTING DOCUMENTATION ON FILE? FUNDRAISING. DID THEY HAVE SUPPORTING DOCUMENTATION ON FILE? BORDER CONTROL MINUTES THAT ARE REQUIRED THROUGH OUR RULES, SPONSOR AND SPONSOR RESPONSIBILITIES.

SO WE WOULD POINT OUT WE HAD FIVE SCHOOLS THAT DID NOT HAVE ANY FINDINGS, SO THAT WOULD MEAN 16, 16 DID.

IT IS A BIG RESPONSIBILITY, WE DID THIS IN THE MIDDLE OF THE PANDEMIC.

I'M NOT MAKING EXCUSES FOR ANYONE.

THIS IS WHAT WE FOUND AND THIS IS WHAT WE'VE GOT TO WORK ON AND IMPROVING.

WE DID GET RESPONSES BACK FROM EACH PRINCIPAL ON EACH OF THE ISSUES IDENTIFIED.

SO WE HAVE THAT ON RECORD AND THEN WE CAN DO FOLLOW UP.

OK, TRUSTEES, ANY QUESTIONS, TRUSTEE MARSHALL? YEAH, I'D JUST BE INTERESTED IN HEARING FROM THE ADMINISTRATION ABOUT WHAT WE'RE GOING TO DO ABOUT THIS, BECAUSE AS LONG AS I'VE BEEN ON THE BOARD AND, YOU KNOW, I'VE BEEN ON THE AUDIT COMMITTEE MOST OF THE TIME, I'VE BEEN ON THE BOARD.

AND THESE ACTIVITY FUND AUDITS PERVASIVELY SHOW MORE PROBLEMS THAN THEY DO SUCCESS STORIES. AND WE SEEM TO YOU KNOW, I THINK WE'VE ALL KIND OF GOTTEN IN THE HABIT, AT LEAST I HAVE, OF LOOKING AT THESE AND SAYING, OH, WELL, THERE WE GO AGAIN, SOME PROBLEMS WITH OUR ACTIVITY FUND AUDITS AND WE NEVER SEEM TO GET ANY BETTER AT IT.

SO I'M CURIOUS WHAT YOUR REACTION TO THAT IS DWAYNE AND WHAT GIVEN THAT YOU'RE NEW TO YOUR POSITION, HOW YOU'RE GOING TO GRAB THIS BULL BY THE HORNS AND FIX THIS? SO HOW ARE WE GOING TO DO IT EXACTLY LIKE WE DO EVERY OTHER AUDIT WE GET.

WE'RE GOING TO REVIEW EACH ONE OF THESE AND WHAT THE WHAT THE ISSUE WAS AND WHY.

SOME OF THE ITEMS IN HERE ARE NOT REALLY THE CAMPUS ISSUE.

WE HAD WE HAD OUR ARMORED CAR SERVICE PROVIDE US NOTICE THAT THEY WERE NO LONGER NO LONGER PROVIDE ARMORED CAR SERVICE.

SO WE HAD A TIME FRAME THAT WE HAD TO HAVE BIDS AND GET A NEW SERVICE.

AND IT'S REFLECTED IN HERE THAT THEY HAD MONEY IN THERE AND THEY'RE SAFE THAT THEY TYPICALLY WOULD HAVE DEPOSITED.

SO WHILE THAT'S REFLECTED AS THE CAMPUS LEVEL, THAT'S A DISTRICT ISSUE THAT WE NEED TO GET RESOLVED. WE'RE ALSO THERE WERE SOME REFERENCES IN THERE TO ONLINE TRAINING THAT HAS NOW BEEN CORRECTED. SO THERE IS AN OPPORTUNITY FOR THE PRINCIPAL AP AND THE SPONSORS TO GET THEIR TRAINING THAT IS REQUIRED ONLINE, WHICH IT WASN'T PREVIOUSLY.

SO WE'VE MADE THOSE CHANGES. SO TO ANSWER YOUR QUESTION, WHAT WE'RE GOING TO DO IS WE'RE GOING TO GO THROUGH EACH ONE OF THESE WITH INTERNAL AUDIT TO HAVE A CONVERSATION ABOUT

[00:50:02]

WHAT ARE THESE, WHAT ARE THE DEFICIENCIES AND WHY.

AND THEN WE CAN HAVE A CONVERSATION ABOUT WHAT CAN WE DO DIFFERENTLY.

ONE OF THE BIGGEST THING THAT IS IN THERE OR NOT REALLY THE BIGGEST THING THAT'S IN THERE, BUT ONE OF THE REPEAT IS THE SPONSOR LEVEL.

AND SO WE'RE GOING TO HAVE TO WORK DILIGENTLY ON HOW WE CAN GET THE SPONSORS TO ADHERE TO THE REQUIREMENTS OF TIMELY SUBMISSION TO THE CAMPUS FINANCIAL CLERK AND THAT SORT OF THING. BUT WE'RE GOING TO GO INDIVIDUALLY BY THESE.

SO I'VE HAD NUMEROUS CONVERSATIONS WITH MY DEPUTY ABOUT THIS.

AND SO THAT'S WHAT WE'RE GOING TO DO, IS WE'RE GOING TO GO THROUGH THIS AND FIND THE SOLUTIONS THAT ARE SOMEWHAT GLOBAL TO RESOLVE IT.

AND THAT'S WHERE I WAS GOING TO GO DWAYNE, I WAS GOING TO ASK YOU TO, BECAUSE WE HAVE NEW DEPUTY SUPERINTENDENT AND WE HAVE A NEW SCHOOL LEADERSHIP.

AS YOU FIND ITEMS THAT ARE SYSTEMIC ADDRESSED, TRUSTEE MARSHALL CONCERN THE ONE OFFS ON THE ON THE COMPANY THAT COLLECTS THE MONEY.

THAT'S THAT'S SEPARATE, BUT.

IT MAY BE MORE OF A TRAINING ISSUE THAT SCHOOL LEADERSHIP MAY NEED TO BE INVOLVED IN.

SO IF YOU CAN IDENTIFY THOSE EMERGING THEMES THAT YOU SEE CONSISTENTLY, THEN WE WOULD LIKE TO GET THAT HANDLED.

YEAH, AND I APPRECIATE YOU SAYING THAT BECAUSE THAT'S KIND OF WHERE I WAS HEADED WITH IT IS, THIS SEEMS TO ME TO BE A SYSTEMIC ISSUE.

AND I GET THAT THERE'S ONE OFF THINGS LIKE THE ARMORED CAR.

BUT THIS SEEMS TO HAPPEN EVERY TIME WE REVIEW THESE AUDITS.

AND, YOU KNOW, THERE SEEMS TO BE FAR MORE INSTANCES OF SCHOOLS WITH PROBLEMS THAN THERE ARE SCHOOLS THAT ARE DOING IT CORRECTLY.

AND I'M WONDERING IF THERE'S LIKE, YOU KNOW, IF.

COMPLIANCE WITH THIS NEEDS TO BE PART OF PRINCIPAL EVALUATION AND COMPENSATION OR, YOU KNOW, I'M NOT NECESSARILY ADVOCATING FOR THAT, BUT THAT'S THE KIND OF SYSTEM LEVEL CHANGE THAT I'M LOOKING FOR, WHICH IS, YOU KNOW, A WHOLESALE NEW TRAINING PROGRAM, LIKE YOU MENTIONED, THAT'S GOOD PROGRESS.

BUT, YOU KNOW, DO WE HAVE, YOU KNOW, REWARDS AND WE HAVE CARROTS AND STICKS IN THE RIGHT PLACE HERE TO MAKE SURE THAT, YOU KNOW, THERE'S COMPLIANCE HERE BECAUSE IT WOULD APPEAR THAT WE DON'T. SO I HOPE YOU'LL KIND OF THINK SYSTEMICALLY LIKE THE SUPERINTENDENT WAS ALLUDING TO. THANKS. TRUSTEE FOREMAN, ANY QUESTIONS.

NOT AT THIS TIME. THANK YOU.

OK TONI, CHRIS? OK, NEXT ITEM.

LAST AUDIT TO BE CONSIDERED ATM AUDIT.

WE LOOKED AT PROCESSING FOR NEW HIRES, DOCUMENTATION REQUIRED, AND THEN EMPLOYEE SEPARATIONS. A STATISTICAL SAMPLE WAS SELECTED.

WE DID HAVE ONE ERROR.

AN I9, THE FORM WAS THERE.

IT WAS JUST COLLECTED LATE.

SO AND THEN ON SEPARATION INSTEAD OF WITHIN THE TIMEFRAME, IT WAS 67 DAYS, APPROVED 67 DAYS AFTER SUBMISSION. SO ONE EXCEPTION IN EACH AREA.

MADE A RECOMMENDATION TO REVIEW THAT AND I'LL ACCEPT ANY QUESTIONS IF THERE ARE.

TRUSTEE MARSHALL? SO I DON'T HAVE ANY QUESTIONS ON THAT AUDIT, I JUST WANT TO MAKE ONE FINAL COMMENT, SINCE WE'RE SINCE THIS WAS THE LAST AUDIT THAT YOU ARE PRESENTING.

SOMEWHERE ALONG THE TENURE OF YOUR PREDECESSOR IN THIS ROLE, WE CHANGED THE FORMATS OF THE WAY THESE AUDITS ARE PRESENTED TO US.

AND THIS FORMAT IS WAY BETTER THAN IT USED TO BE.

SO WHAT I'M SAYING FORMAT, I MEAN, THE SECTIONS OF THE AUDIT, STARTING WITH THE EXECUTIVE SUMMARY AND THEN BACKGROUND AND IN SCOPE AND THEN OBJECTIVE AND THE METHODOLOGY AND THEN FINDINGS AND RECOMMENDATIONS AND THEN MANAGEMENT RESPONSE, THAT FLOW IS MUCH EASIER FOR US TO DIGEST. SO I JUST WANT TO THROW THAT OUT THERE IN HOPES THAT YOU WILL CONTINUE TO ADOPT THE FORMAT OF YOUR PREDECESSOR AND STICK WITH THIS FORMAT.

THANKS. THANK YOU FOR THE COMMENT.

WE SO ANY SUGGESTIONS, GLAD TO ENTERTAIN.

I JUST LIKE IT WHEN THE EXECUTIVE SUMMARY SAYS, LIKE IF THERE'S A LINE THAT SAYS THIS AUDIT FOUND NO EXCEPTIONS, IF YOU'RE ME AND YOU'RE TRYING TO SAVE TIME, I CAN QUIT READING, RIGHT? YES, SIR.

I DON'T WE WE'RE REQUIRED TO PUT IN OUR STANDARDS AND BACKGROUNDS BUT, YEAH, YOU SHOULD BE ABLE TO.

THANK YOU.

TRUSTEE FOREMAN. I'LL SAVE MY COMMENTS.

THANK YOU. CHRIS, TONY? OK, SO IS THAT IS THAT ALL OF OUR AUDITS, ARE WE ARE WE NOW READY TO VOTE ON THIS THING? YES. OK, SO WE'VE HAD OUR MOTION, WE'VE HAD OUR SECOND AND IF THERE ARE NO FURTHER COMMENTS. TRUSTEES, CAST YOUR VOTE, WE'RE GOING TO DO IT BY ROLL CALL.

[00:55:03]

TRUSTEE MARSHALL OH IT'S JUST THE TWO OF US. SO ALL THOSE IN FAVOR RAISE YOUR HAND.

THE MOTION PASSES TWO ZERO.

OK, SO WE HAVE ADOPTED THE MOTION TO ACCEPT THE FINAL INTERNAL AUDIT REPORTS.

[E. Audit Follow-Up Report]

AUDIT FOLLOW UP REPORT.

THANK YOU, TRUSTEE FLORES.

WE'VE PRESENTED THE STATUS OF THE FOLLOW UP ITEMS. THERE WERE 13 IN GREEN THAT WE WENT BACK REEVALUATED.

THEY WERE DUE AND THEY HAVE BEEN IMPLEMENTED.

IF YOU LOOK AT THE LEFT COLUMN, THE ITEMS IN YELLOW ARE STILL IN PROCESS.

IT'S US GETTING AROUND TO REVIEWING ALL THOSE OTHER ITEMS. SO THE ONES THAT WERE PERTINENT, THAT WERE OUTSTANDING ARE GREEN AND HAVE BEEN IMPLEMENTED. THAT'S THE TAKE AWAY HERE TODAY AND THE YELLOWS WE'RE WORKING ON AND WE'LL BE ABLE TO REPORT ON THOSE AT THE NEXT MEETING.

TRUSTEE MARSHALL. SO I THOUGHT, I'M JUST CLARIFYING BECAUSE I'M NOT SURE WHAT I WHAT I JUST HEARD. THE YELLOW MEANS, THAT INTERNAL AUDIT HASN'T REVIEWED MANAGEMENT'S RESPONSE.

NOT THAT MANAGEMENT HASN'T GIVEN YOU A RESPONSE.

THAT'S CORRECT. THEY'RE IN PROCESS.

WE'RE WORKING THEM NOW.

OK, THEN I HAVE TWO COMMENTS ABOUT THAT.

NUMBER ONE, WHAT'S CAUSING US NOT TO HAVE BEEN ABLE TO REVIEW THESE THINGS SINCE JUNE? IS THAT A PERSONNEL ISSUE OR A PRIORITIZATION ISSUE? I MEAN, SOME OF THESE THINGS ARE SIX MONTHS, NINE MONTHS OLD.

PRIORITY ISSUE.

JUST WORKING ON WORKING ON WORKING ON OTHER PROJECTS AND AND HAVING THOSE STAFF.

CAN WE TRY TO MAKE SURE THESE ARE ALL GREEN BY THE NEXT.

YES, SIR. AUDIT COMMITTEE MEETING.

AND THEN THE SECOND THING IS, AGAIN, I HATE TO HARP ON THE FORMAT, BUT THE FORMAT OF THIS CHART AND I ACTUALLY ALAN ACTUALLY WENT BACK TO THIS FORMAT BECAUSE WE USED TO HAVE THIS FORMAT SEVERAL YEARS AGO AND THEN IT WENT AWAY AND I ASKED ALAN TO BRING IT BACK, WHICH HE DID. AND I'M GRATEFUL FOR THAT.

AND I LIKE THE IDEA OF THIS FORMAT.

BUT TO ME, THE GREEN, YELLOW AND RED SHOULD REFER TO WHETHER THE ADMINISTRATION HAS RESPONDED OR NOT, WHETHER THE INTERNAL AUDIT GROUP HAS PROCESSED AND DIGESTED AND APPROVED THE RESPONSE FROM THE ADMINISTRATION.

BECAUSE WHAT I INTENDED WITH THIS FORMAT IS FOR ME TO BE ABLE TO TURN TO THE SUPERINTENDENT AND SAY, WHY IS THIS RED? BECAUSE RED MEANS THE ADMINISTRATION IGNORED.

CORRECT.

THE, YOU KNOW, RECOMMENDATION FROM AUDIT.

AND IT SOUNDS LIKE YOU'RE USING YELLOW TO MEAN SOMETHING DIFFERENT.

SO I'M HOPEFUL THAT WHEN WE PRESENT THIS AGAIN, THAT NOT ONLY HAS AUDIT REVIEWED ALL THE MANAGEMENT'S RESPONSE, BUT ALSO THAT WE'RE USING RED, YELLOW AND GREEN TO CORRESPOND TO WHETHER THE ADMINISTRATION HAS RESPONDED AND NOT WHETHER AUDIT HAS APPROVED.

MANAGEMENT'S RESPONSE, IF THAT MAKES SENSE.

YES, SIR. GREAT, THANKS.

BUT MAYBE THESE THERE ARE NO RED.

THERE ARE NO WHAT? THERE ARE NO RED ONES BECAUSE THE ADMINISTRATION HAS DONE.

I KNOW. THAT'S WHAT I'M SAYING. IT SOUNDS TO ME LIKE ON THIS ONE, THEY SHOULD ALL BE GREEN BECAUSE THE ADMINISTRATION HAS ACTUALLY RESPONDED TO ALL OF THEM AND IA HASN'T PROCESSED IT. I SEE WHAT YOU'RE SAYING. RIGHT.

BUT UNTIL WE REVIEW IT, WE DON'T KNOW.

I MEAN, WE HAVE A RESPONSE FROM THE ORIGINAL REPORT, BUT WE HAVE TO GO BACK AND THEN SOME WE CAN TAKE WE HAVE TO DO TESTS WORK ON MOST OF THEM TO DETERMINE IS IT BEEN DONE AND THE YELLOW, CORRECT.

YOU GET WHERE I'M COMING FROM, THOUGH, RIGHT? LIKE IF I TURN TO THE SUPERINTENDENT AND SAY, WHY IS THIS YELLOW? AND HE GOES AND INVESTIGATES IT AND FINDS OUT THAT THEY RESPONDED TO THIS IN SEPTEMBER AND Y'ALL JUST HAVEN'T DIGESTED IT.

THEN THERE'S A FINGER POINTING.

AND THERE SHOULDN'T BE THAT SITUATION, THOUGH, I HEAR WHAT YOU'RE SAYING, IF THEY RESPONDED, WE'LL ACT ON THAT IMMEDIATELY.

YOU KNOW, WE DO A FOLLOW UP.

OCCASIONALLY WHAT HAPPENS MIGHT HAVE BEEN DUE JULY OR MIGHT HAVE BEEN DUE OCTOBER.

WELL, OUR CUTOFF HAS TO BE AT A CERTAIN TIME TO GIVE US TIME TO GET READY AND DO IT BEFORE THE NEXT AUDIT COMMITTEE.

SURE. LOTS OF TIMING BENCHMARKS, SO TO SPEAK.

BUT WE'RE GOING TO WORK TO GET THROUGH THE REST OF THESE BY MAY.

THANK YOU. TONI.

SO I HAVE A QUESTION ON THAT.

SO SOME OF THEM ARE DESIGNATED AS NO DESIGNATION FOR RISK LEVEL, BUT THEN THERE'S SOME TOWARD THE END THAT WEREN'T LOOKED AT.

BUT THEY'RE DESIGNATED, AS I'M GUESSING, HIGH, HIGH RISK.

SO WOULDN'T IT BE BETTER OR IS THERE A REASON WHY YOU SHOULD DO THE HIGH, HIGH ONES FIRST? IF IT, YOU KNOW.

INSTEAD OF LOOKING AT JUST THE ONES WITHOUT A RISK DESIGNATION, AND MAYBE THAT'S BECAUSE YOU DIDN'T APPLY A RISK DESIGNATION BEFORE, I DON'T KNOW, BUT I WOULD THINK IT'D BE BEST TO DO THE HIGH RISK.

MAKE SURE YOU GET THOSE DONE FIRST AND THEN WORRY ABOUT THE OTHER ONES LATER.

SURE, SURE, THAT'S EASILY DONE.

I COULDN'T IT DIDN'T HAVE A DESIGNATION, I COULDN'T TELL YOU WHY.

[01:00:07]

SOME AUDITS, SOME AUDITS WERE DONE WITHOUT THAT DESIGNATION POSTED, SO I'M TRYING TO BE CONSISTENT AS WE MOVE FORWARD.

AND ALL THE HIGH, HIGH ONES ARE ACTIVITY FUNDS AT A CAMPUS.

RIGHT. TOO EARLY.

AND IT'S ONE CAMPUS. SO IT LOOKS LIKE IT'S A WHOLE BUNCH OF THINGS, BUT IT'S YOU KNOW, I'M SURE IT'S JUST TRAINING.

YOU KNOW, IT'S A NEW EMPLOYEE.

I MEAN, THESE AREN'T HIGHLY PAID EMPLOYEES THAT ARE HELPING DO SOME OF THIS SUPPORT OF THE PRINCIPALS AND SPONSORS.

SO THAT'S I JUST HAPPEN TO NOTICE THAT.

ANY OTHER QUESTIONS, TONI? TRUSTEE FOREMAN, ANY QUESTIONS? OK, THEN WE WILL MOVE ON TO THE REPORT ON THE DISTRICT HOTLINE.

[F. Report on District Hotline]

SO WE'VE PRESENTED THE RESULTS, THIRD QUARTER HOTLINE.

YOU CAN SEE THE NUMBERS IN HERE.

OBVIOUSLY, WITH SCHOOL AND CAMPUSES OPENING BACK UP, OUR NUMBERS HAVE GONE BACK UP.

I MEAN, THAT'S JUST THE TREND LINE.

AND BUT I'M GLAD TO REPORT, YOU KNOW, WE ONLY HAVE 39 OPEN AT THE DATE OF THIS REPORT.

I KNOW SOME TIME WE'RE STILL WORKING.

I STILL SEE EVERY SINGLE ITEM THAT COMES THROUGH.

WE TRIAGE IT THROUGH US AND AND PSO.

AND I THINK WE'VE WORKED VERY HARD TO, YOU KNOW, KEEP THIS TO A VERY MANAGEABLE LEVEL AND RESOLVE THESE ISSUES AS THEY COME IN.

SO.

TRUSTEE MARSHALL. SO THIS LOOKS LIKE IA THE POLICE DEPARTMENT AND PSO ARE ALL DOING A GOOD JOB INVESTIGATING.

I'M WONDERING WHAT'S HAPPENING WITH THE OFFICE OF TITLE NINE.

IT DOESN'T LOOK LIKE THEY'VE INVESTIGATED ANYTHING.

DO WE KNOW? WHO DOES THAT REPORT TO? I'D HAVE TO LOOK AT THE DATE THOSE CAME IN.

THAT'S A GOOD POINT. I CAN REPORT BACK.

YEAH, IF YOU CAN JUST FOLLOW UP WITH US ONCE YOU HAVE AN ANSWER TO THAT, I MEAN, IT JUST IS GLARING THAT THEY HAVEN'T CLOSED ANY CASES.

MAKES YOU WONDER IF THEY'RE INVESTIGATING THEM AT ALL.

CAN I SPEAK TO TRUSTEE MARSHALL? TRUSTEE MARSHALL, IF I CAN.

AND FROM SCHOOL LEADERSHIP SIDE, CUS TIMELINE DOES FALL UNDER US THAT WE'VE GOT AN EMPLOYEE WHO'S NOW LEADING THAT CHARGE AND WORKING THROUGH THAT WORK RIGHT THERE AND EXCITED ABOUT HER ROLE AND WHAT SHE'S DOING UNDER SCHOOL LEADERSHIP AND TRAINING AND MOVING THROUGH THAT.

THAT ADJUSTMENT WAS MADE AS WE WERE ENTERING INTO THIS SCHOOL YEAR.

SO WE'VE GOT TO SUPPORT THROUGH GENERAL COUNCIL SOTO AND HER TEAM AND THROUGH CHIEF AND WE HAVE SOMEONE WHO IS NOW IDENTIFIED AS A TITLE NINE COORDINATOR FOR THE DISTRICT.

OK, SO WE HAD A GAP, PERSONNEL GAP BEFORE THAT.

THERE'S A THERE'S A THERE'S A GAP IN THERE AND WE'RE CLOSING THAT GAP.

YEAH, OK, GREAT.

DON'T SELL PAST THE SALE.

TRUSTEE FOREMAN, TONI, CHRIS ANY QUESTIONS? YEAH, I JUST SINCE TRUSTEE MARSHALL BROUGHT UP TITLE NINE, IT WOULD BE INTERESTING FOR ME TO KNOW HOW MANY TITLE NINE COMPLAINTS WE HAVE DONE EACH YEAR FOR THE PAST FIVE YEARS.

AND I DO KNOW THAT THERE IS SOME RESTRUCTURING TO TITLE NINE NEW REGULATIONS THAT WE WILL BE INVOKED IN, BUT IT JUST BE IT WOULD BE INTERESTING FOR ME TO HAVE A GOOD UNDERSTANDING OF THAT. SINCE DR.

TELL HER IF SHE DOESN'T I'M GOING TO CALL HER ON SUNDAY.

OK.

OK, SO THAT'S THE REPORT.

SO THEN THE NEXT ITEM IS G REPORT ON THE STATUS OF AUDIT PLAN AND SUFFICIENCY OF

[G. Report on Status of Audit Plan and Sufficiency of Department Resources]

DEPARTMENT RESOURCES. THANK YOU, TRUSTEE FLORES.

WE PRESENTED AN AUDIT PLAN WITH STATE IS OUT TO DECIDE.

I WOULD LIKE TO ADD A FEW COMMENTS TO THIS REPORT AND I'LL WORK DOWN FROM PAGE ONE.

21, THE ERATE AUDIT.

WE ACTUALLY STARTED THAT LATE LAST FISCAL YEAR AND WE ACTUALLY STARTED THE AUDIT PLAN YEAR EARLY IN JUNE INSTEAD OF, YOU KNOW, JULY ONE.

WE NORMALLY DO JUST BECAUSE WE EVOLVED OR SET A NEW PLAN INTO PLACE AND STARTED UP EARLY.

SO WE FINISHED UP LAST YEAR'S ERATE AND WE WILL START UP A 21 ERATE AUDIT, APRIL MAY TIME PERIOD. SO THOSE HOURS, ALTHOUGH IT SAYS ESTIMATED TO COMPLETE, THAT PROBABLY IS GOING TO BE AROUND 400. SO THAT WAS A POINT I NEEDED TO CORRECT ON THAT.

[01:05:05]

UNDER THE TECHNOLOGY AUDIT, WE OUTSOURCED CYBERSECURITY AND SOME OTHER REAL TECHNICAL ASPECTS OF THAT AUDIT.

HOWEVER, INCLUDED IN THE DESCRIPTION IS BUSINESS CONTINUITY.

I'M SORRY, THE DISASTER RECOVERY PLAN.

I HAVE TO GET MY LANGUAGE RIGHT HERE.

DISASTER RECOVERY PLAN.

HAD WE HAD FIRST LOOKED AT THAT IN 19, IT'S CONCLUDED INCLUDED HERE IN THE DESCRIPTION AND I WOULD ASK TO ADD THIS BACK IN.

THERE WILL BE SOME HOURS TO COMPLETE.

THERE'S OBVIOUSLY EXCESS HOURS THERE.

WE DIDN'T KNOW WE WOULD OUTSOURCE AND GET SO MUCH VALUE FOR THAT WHEN WE CONTRACTED OUT.

YOU KNOW, THAT'S GOING TO BE I HAVEN'T REALLY PUT AN ESTIMATE IN THERE YET, BUT I'LL HAVE TO GO BACK AND LOOK AT THAT.

ACTIVITY FUNDS IN SECURITY, WE HAVE WAY TOO MANY HOURS IN SECURITY AND WE NEEDED THOSE IN ACTIVITIES. I WOULD ASK THAT WE JUST COMBINE THOSE.

SO THAT THE TOTAL OVERAGE OF THE TWO COMBINED ISN'T AS EXCESSIVE AS IT WOULD BE OTHERWISE.

CAN YOU SEE MY, THE MATH THERE? SHOULD HAVE BEEN ABOUT 90/10, 90 PERCENT ACTIVITY AND LESS ON SECURITY BECAUSE IT WAS A PRETTY VERY QUICK WALK THROUGH.

UNDER HCM.

WE DID A FOCUSED REVIEW TO GET SOME WORK DONE, GET A REPORT TO BACK TO HCM AND TO THE BOARD. AND I WOULD ASK THAT USING THOSE HOURS THAT WE CONSIDER OVERTIME AND SUPPLEMENTAL PAY, YOU KNOW, YEAR TO DATE WITH THE TOTAL DOLLAR AMOUNT OF PAYROLL THROUGH THE SYSTEM, THAT'S SOMETHING THAT WE ALWAYS SHOULD DO, BE VIGILANT ABOUT AND PROVIDE AUDIT COVERAGE AND LOOK AT CONTROLS OVER THAT.

SO THAT WOULD PROBABLY BE, YOU KNOW, 1000 TO 1200 HOURS BENCHMARK TO COMPLETE THAT BY THE END OF THE YEAR. AND THEN SEVERAL AUDITS ARE REMAINING.

THE VENDOR FILE WE HAVE TO DO.

THE NINE MORE ACTIVITY FUNDS IN SECURITY WALKTHROUGHS AND THEN INTERNAL CONTROL REVIEW.

SO OVERALL, IT'S BEEN A VERY, VERY BUSY YEAR.

WE STILL TURN TO PAGE TWO.

WE HAVE STAAR TESTING.

IF IT'S STILL ON THE BOOKS, IS MY UNDERSTANDING.

SO WE'RE MOVING FORWARD TO PLAN THAT AND A COMPUTER BASED PROGRAM THIS YEAR.

SO WE DON'T HAVE TO LOOK AT SECURITY OF PAPER TEST FILES, ET CETERA, BUT STILL DO AN OBSERVATION AND GO THROUGH THE TRAINING.

I WOULD BE GLAD AND CURRENTLY WORKING ON RISK ASSESSMENT AND AUDIT PLAN FOR NEXT YEAR.

SO THAT WOULD BE BROUGHT BACK IN THE MAY MEETING.

AND AS I MENTIONED IN THE EMAIL, WE WOULD MEET WITH ALL TRUSTEES TO GET THEIR FEEDBACK ON RISK ACROSS THE DISTRICT AND BUILD THAT INTO 2022 AUDIT PLAN.

ENTERTAIN QUESTIONS IF YOU HAVE.

ANY QUESTIONS? A COMMENT.

GO AHEAD, MS. FOREMAN. OH, THANK YOU.

ONE OF THE THINGS THAT I HEARD YOU SAY IS THAT YOU WOULD TALK TO TRUSTEES AND MAKE SURE THE TRUSTEES CONCERNS WERE A PART OF THE AUDIT PLAN.

FOR THE LAST A COUPLE OF YEARS.

I KNOW THAT HAS NOT HAPPENED.

I THINK THERE'S BEEN ONE CONVERSATION WITH TRUSTEES, BUT CONCERNS HAVE NOT BEEN THE SAME AS IT'S BEEN SINCE I'VE BEEN ON THE BOARD.

SO I'D REALLY LIKE TO MAKE SURE THAT THERE IS A CLEAR UNDERSTANDING THAT DIFFERENT TRUSTEES COME TO THE TABLE WITH DIFFERENT ISSUES.

AND SO IT WOULD BE GOOD TO KNOW WHAT TRUSTEES ARE ASKING AND MAKE SURE THAT SOME OF THESE THINGS BE A PART OF THE AUDIT PLAN.

BECAUSE THE LAST COUPLE OF YEARS IT'S BASICALLY BEEN ON THE AUDIT COMMITTEE DIRECTING THE AUDIT PLAN. AND SO I'D BE REALLY INTERESTED IN YOU REACHING OUT TO OTHER TRUSTEES.

YES, MA'AM. TRUSTEE FOREMAN.

WE'LL REACH OUT. MEET WITH EVERY SINGLE ONE.

THANK YOU SO MUCH.

ANY OTHER QUESTIONS? TONI, CHRIS, TRUSTEE MARSHALL?

[H. Risk Assessment Update]

SO DOES THAT INCLUDE OUR RISK ASSESSMENT UPDATE? IS THAT THE. WAS THAT ALSO PART OF THAT? YES, SIR, THAT WAS THE UPDATE.

I DON'T HAVE ANY FORMAL DOCUMENT TO SHARE TONIGHT, BUT IT'S A LOT OF WORK.

WE'VE BEEN ON IT ANOTHER FOUR TO SIX WEEKS, TAKES A LOT OF WORK TO GET THROUGH, PROVIDE A

[01:10:01]

COMPREHENSIVE RISK ASSESSMENT FOR THE DISTRICT.

WE'RE LEARNING LOTS OF DIFFERENT THINGS THAT WE DIDN'T HAVE DOCUMENTED BEFORE.

AND THE KEY IS HAVE A VERY GOOD DICTIONARY OF RISK ACROSS THE DISTRICT AND THEN MOVE FORWARD WITH THAT.

OK. GREAT. SO THERE'S NOTHING ELSE ON THE AGENDA.

I GUESS WE'LL JUST SCHEDULE THE NEXT ONE SOMETIME IN JUNE-ISH.

I THINK WE HAD A MAY DATE AND I'M SORRY.

OK, JUST AS LONG AS.

I DON'T HAVE IT IN FRONT OF ME.

THAT'S FINE. JUST FINE. NO PROBLEM AT ALL.

SO WITHOUT THAT, THE TIME IS 5:19 AND WE ARE ADJOURNED.

* This transcript was compiled from uncorrected Closed Captioning.