001Thank you, Miss Barton. Thank you for beginning the recording. The time is now 6:02 p.m. and I would like to call to order the January 12th, 2026 board audit committee meeting. Welcome everyone. My name is Dr. Tiffany Ander. I'm the chair of this committee and the district 1 school board member. The primary purpose of Prince George's County Board of Education Audit Committee is to provide oversight of the financial reporting process. the audit process, the PGCPS system of internal controls and compliance with laws and regulations. Welcome to our committee members and any other board of education members. Um, happy new year to everyone. Also, I would like to welcome members of the administration and special guests this evening. We'll now have introductions starting in this order. Board members, PGCPS administration, board office staff, and any other
002guests. Thank you. >> Uh, good evening everyone. Pamela Boozer Strruther, vice chair of the committee in district 3, board of education member. >> Good evening everybody. Brandon Jackson, District 6 >> Administration. >> Uh, good evening, Jason Washington, Associate Superintendent of Supporting Services. >> Good evening, Shayla Jackson, director of capital programs. And good evening, Will Smith, supervisor of capital programs. >> Good evening, Ricardo Smith, CIP fiscal supervisor. >> Good evening, Mia Barton, board office staff. >> And I'm Dana Thorps, the director of internal audit. >> Fantastic. Thank you everyone and welcome again to this evening's board audit committee meeting. Next, we will have the roll call of the board audit committee members. Miss Barton, could you please call the role? >> Dr. Tiffany Anderfold, >> present. >> Miss Pamela Boost, >> present. >> Mr. Brandon Jackson,
003>> here. >> Dr. Felton Moss, >> we have quum. >> Thank you. With quorum present, we will begin and move to item 3.0, the adoption of the January 12th, 2026 agenda. The question is to adopt the January 12th, 2026 board audit committee meeting agenda without objection. to adopt the agenda as is. >> Yes. To adopt as is. Okay. Hearing no objection. Um the January 12, 2026 board audit committee meeting agenda has been adopted. Moving on to item 4.0, approval of the October 6, 2025 meeting minutes. The question is to approve the October 6th board audit committee meeting minutes. Um, without objection. There being no objection, the October 6, 2025 board audit committee meeting minutes have been approved. We will now move on to public comment. And it appears we have one registered public comment speaker
004this evening. Miss Barton, are they here? No, they are not the pre-register but I don't see him as an attendee. If he comes up late, I will let you know. >> Thank you so much. >> With that, we will move on to item 6.0, presentations. Um, this evening, we are joined by capital programs. Um, and I'd like to recognize Miss Shayla Jackson, the director of capital programs to provide her presentation. Thank you so much for joining us. Turn it over to you. Thank you. Good evening. Um, Mr. Smith, you gonna help me? I have two, Mr. Smiths. Whichever one. Awesome. Thank you. Okay. Hey, good evening and happy new year, chair, members of the committee. I want to start by saying I'm genuinely happy that we're having this conversation. And I think more than any
005individual audit finding or change order that surfaces on the board consent agenda, we'll get to talk about how the capital program actually works. I think when you see the capital program through individual moments like a CIP vote or an EFMP update or a contract award, it looks fragmented. It looks like a lot of motion, a lot of money, a lot of complexity. But what I want to show you tonight is that underneath all that motion, there's a system of controls that is layered and redundant and deliberately or bureaucratically designed. So no one office or person or department is acting alone. And PGCPS really doesn't own any of these systems unilaterally. Um that's why it can take seven years to get a new school, but that's another presentation. Next slide, please, Mr. Smith. So today's presentation
006roadmap I just want to walk us through from a controls angle on on the capital process which I don't think we've done publicly. We're going to step back look at the full control framework from early planning through the moment there's a builder and then with that shared understanding we'll be able to discuss the audit findings uh with the full context and with accuracy and then we'll leave time for questions since I'm joined by Ricardo Smith. um he's our master of the money and Will Smith who has spent over a decade yeah with us supervising project delivery and is now serving in a deputy director role. So you have the people who live inside these controls every day uh with you on this call. Um, so there is a common assumption and it's not unreasonable that
007capital programs really kind of come alive when construction starts. But the truth is by the time a shovel hits the ground almost all the decisions are already locked in. Our controls don't start in construction. They really start years earlier. So we're going to visit that next because before we have a design or we even know if we're renovating or replacing, we have about four separate control gates. Um the first one is the EFMP selection. This one should be familiar. This is where the board and Maryland Department of Planning acting with the IC decide why, how, and what order. Every LEA in Maryland is investing in their buildings. And it um every major project that we undertake is either in here or it's not going to achieve state funding. The second piece though um we don't
008talk about quite as much and that is if a major project involves an existing school, the state requires a formal feasibility study to determine renovation or replacement. So it's an independent study. It looks at the building, its site, any missing program elements. Um and most importantly, it does a cost comparison between renovating and new construction. That study is approved by the board and then it goes to the IA for approval. If it's a new building, it's a mirroring process to do a test fit on that site. And I just want to focus there just to note that PGCPS can't unilaterally even decide if we're going to renovate or replace a school. Um, and it's an important inflection point because while the policy is, excuse me, neighborhood blight is a problem. So, if we're just throughout
009Maryland abandoning schools in Mass, like that would be a neighborhood problem. But renovations can often have a lot more hidden costs than new buildings. It can be a little bit less satisfactory of a product sometimes at higher costs than building new and really has for us a lot of unforeseeable conditions because of the condition of our facilities. So either way, we just want to note there that baked into these early preliminary steps are these controls. Um so educational specifications, this is where the project is starting to get real. uh we have school leaders, academic staff, cost estimators, and an external architect. And they define what the building will actually contain, what the new project will be. So, it's no longer a CTE space or barbering and cosmetology. It's five barbering spaces and three cosmetology stations.
010It's not furniture. It's three lockers are allowed per station. One teacher wardrobe, that's 100 square feet per three lockers. It is that detailed. And so if it says for that that academy you can have 1,000 square ft it's not flexible later beyond this 10% margin. So above,00 square ft you've jeopardized your funding. So if Maryland State Department of Education approved a barbering program with a specific square footage you don't get to quietly add more square footage during the design process. Um, and I'm just including that. Um, academics would also then have to get that CTE program approved in a separate but still tied in process. And then this next one is of course the loud noisy one. Every fall, we know the rhythm. Board approval in September, submission to the county and state in October,
011final approvals in May or June, and funding that appears to be available on July 1st, which is roughly, we'll say, $150 million a year here. But here's the controls that lie behind the scenes on that dollar amount. DCP uh capital programs doesn't gain access through all that $150 million on July 1st. And in fact, we don't have any ownership over those capital account strings. And actually PGCPS as a whole never receives like $150 million as a transfer of cash. There's no bank account. There's no pile of money. Capital funding functions really as a reimbursement to the operating budget. So after our construction related invoices are paid, they're submitted to the state and the county. They sell bonds as we spend. And there's essentially no flexibility in that. Um even when you might want some because
012how it actually works is a specific project appropriation is loaded into Oracle by the CFO's accounting and financial reporting office after their review of the final state and county approval documents. So very concretely that means every dollar or approved appropriation is tied to a specific project with a specific scope approved by a specific funding agency. We request our account strings from an external department in order to use those funds and as the invoices are paid um the CFO's office seeks reimbursement from our funding agencies on a monthly basis as construction progresses. So because of that structure, one of the most common accusations we hear really isn't possible. If the state provided 2 million to replace the chiller at Thomas Stone Elementary, I can't move that 2 million to replace the chiller at Matapana Elementary. Like
013it can't happen. But how about if Thomas Stone, the same school that was approved for the chiller, needs a boiler. A lot of what we do is about predicting failure. So, if I show up, we have a chiller approved, but over the summer the chiller failed and building services had to replace it to open school, I I still can't switch. It doesn't matter um that they were both HBAC projects, that's how specific the scope is tied to the project and to the funding. And so for the final pin on that point, even if DCP's internal fiscal controls failed and we moved it to Matapani or we tried to, the CFO's office would also have to fail and then the reimbursement system would still catch it and it would really catch it before reimbursement because they
014also approve contract award. So just noting that there are layers of built-in controls on every major action we make. And it just occurred to me right before we leave that slide. Uh it's okay, don't go back. Um, we can move $250,000 a year. I want to be accurate. Uh, but it's cumulative. So, it's one total of $250,000 and that's that's great. We spent $200 million or so last year. That 250 doesn't quite get you a playground. Um, the next one, uh, as planning completes, you know, the net kind of tightens on what we can do. So during design and I've compressed them here because this isn't a presentation about design but these are actually three separate internal external state reviews at roughly 35% 65% and 95% and I just want you to know those are
015separate actions to separate external agencies. Um, you know, MSDE we've talked about has approved an edspec, but now they're going to look at your designs and they're going to count those lockers and if they said it was three per station, it's still three and that square footage. They're going to check it. They're also checking to make sure you're making educational system improvements. And as the project is coming alive, DGS is also through there looking more at compliance and more at your systems. Um, and at every stage they're reviewing against what they codified earlier in the earlier step because not only is it like a rubber stamp, it's all tied to eligibility for funding. And then permitting begins and that's definitely not a simple or rubber stamp process. uh in Prince George's County, DEPI coordinates reviews
016from more than 10 agencies, fire marshall, highways, environmental authorities. And then only then once we have all of those checks is when you see us bid or get hard numbers for the project. At that point, we are finally ready to award construction. And who approves the construction award? Kind of feels like everybody. Um Department of General Services at the state has approved either the specific solicitation or a blanket one. They've approved the specifications which is kind of that technical background to the drawings. Uh general counsel has approved all of our contract languages and all of our solicitations. Uh fiscal and CFO's office have verified funding before award proceeds. But I'll let you know they also uh verify funding before we even issue a solicitation. um purchasing reviews and of course approves internally since they actually
017issue all the contracts and usually they oversee a multimember selection committee as well and then the state approves our contract awards at their formal meeting and um also the board depending or the board's designate depending on the type of contract it is. On the next slide, just want to talk about what again is a contract and it it's really everything in our industry because it's not just an agreement. It's the control system for construction services once it's ratified. Every approval that we just discussed and there's still some more we didn't is now frozen into this contract as a governing agreement. It legally incorporates the PGCPS approved, state approved, permit approved design. It has the solicitation documents and I mean all of them. The RFP itself, contract. Any agenda we issue during the RFP, it's contract.
018Anything a vendor submitted as a bid form part of your contract. If you asked us a question and we answered it, contract the notice of award. We also then supplement that usually with an AIA contract. And when I say AIA contract, usually it's two to three different AIA contracts. If you gave us a schedule of activities and how you were going to meet our completion date, that's part of your contract. And then who approves that? Again, that's the state. They have a formal vote at their um inter agency commission meeting and the board or designate would approve. And the critical rule here is once that contract is executed, there's only one lawful way to change it and that is a change order. That's the next slide. So change orders aren't casual. They're definitely legal modifications
019to an executed contract. And because of that, that's where our controls and our SOPs tend to be most specific. Uh an approved change order at PGCPS requires a written justification. We use what we call DCP form 3211. That's not what I have on this slide. I have the how we execute it. But um form 3211 is shown on another slide. It shows the scope. You have to justify your scope because remember everything that we just went through wasn't just about a dollar amount. You can't now go and add a barbering station because it wasn't left out. It was an approved planning scope. So the scope has to be justified, but the price also independently of the scope has to be justified. The scope is why should we add this to the base contract? And the
020price is like why does that cost make sense? And then the source of the change has to also be codified in our form. We want to know for the record and for future improvement. Was this an unforeseen condition? Was this an unexloded bomb that was found during excavation which has happened? Burned cars. These are unforeseeables. Uh we also want to know if it was just a school request. Maybe we missed or maybe we need to look at um how we're involving them earlier or was it capital programs initiated uh change? And I think the other one is um is it a design error or a mission? Those are probably the most major ones. Just know that's a lie. The most major one is a permit change. Um, you also have to have independent technical validation
021by your architect or construction manager andor our cost estimator. Um, there's a sequential internal approval chain for each change order. It's always the project manager uh and always the fiscal analyst. And then depending on the dollar amount, it may include the supervisor and the director. There's board approval for anything over $250,000. And then every change order appears on our monthly change order report to the board. It's a standing document that has just been added to over time, but if we approve a change order, it's on the change order log to the board. Uh and then finally, there's execution of the AIA G71. And if you remember, we executed all those AIA contracts as part of our contract. Well, this AIA G71 is how we now modify that contract. This is the point where legal liability
022is incurred. And so the control point on change orders is always the moment of this change order execution. Not later um when payment vehicles are modified or when we pay invoices, but the moment the legal liability incurs to the system. The next one um just to clear that up again like the purchase order is a payment vehicle. It's not a contract control. It's definitely not a change order. Uh the timing can differ. So, the contract has a dollar amount associated with it. The way we pay right now at PGCPS is usually through purchase orders, but the timing doesn't necessarily match up. You don't necessarily for a big multi-year school, we don't necessarily initiate a purchase order with you that year. We might increase your purchase order each year based on your spending projection. So, timing
023could be driven by cash flow, multi-year funding. It could just be we're waiting because it's year and close. It could be based on balances. We could just bundle the projects up just based on workload and then all purchase orders are approved by purchasing and supply services and tied to vendors that are maintained in a nice supplier. I think the key takeaway for me here is just that if PGCPS changed to paying vendors by Apple Pay tomorrow, the contract and change order controls wouldn't change at all because the risk lives in the contract, not the payment tool for us. Next. Oh man, I cannot see that. But on the left hand, that is definitely uh one of the invoices because what we want to note here is that by the time we get to invoices, the
024controls are pretty excessive. Like they're not estimates. They are architect notorized certifications of work in place. And that work is broken down by trade, by system, by line item. It's not just like electrical. It's it's low voltage wiring. It's um not just furniture, you know, it's desks, it's every single line item and then it's a percentage complete and we build on progress building. These are verified in the field. They are reviewed internally. Um they have signoffs associated with purchasing and supply around MBE with um find um AFR and then externally. These are what we submit for reimbursement. PGCPS only pays for verified construction progress. um consistent with the contract. I think the next one is also um invoices. I can't remember why I have two and what I wanted you to know here, but there
025are maybe it was the internal signature process because invoices are also signed off. It depends on if they're final invoices, but they all have a signature chain and there's a SOP that dictates that as well. All right. So now we're ready to talk about the audit findings with that framework in mind. I think I am addressing these in order of juiciness. So the next one is finding three. This is the heart of it for us. Um our general statement here is that we don't concur with the implication of finding three. Um every change order under 250,000 had proper signatures. Every change order over 250 had board approval. every change order appeared on the board notification log at the time the change order was executed and even if as many as nine were processed on the
026same day for the same project they sat on that log and we'll get to that in a later example. So on this slide, the finding aggregates 75 change orders across 15 different purchase orders, which for me I'm going to say projects there, and notes that the cumulative purchase order for those projects increased by more than 250,000 over the audit period. The audit period was 3 and 1/2 years. So here the context really matters because the total spending during that 3 and 1/2 years exceeded 500 million. Um there were approximately 200 change orders and they totaled altogether just under 30 million. Um so 15 projects experiencing a cumulative increase over $250,000 over three and a half years uh isn't wrongdoing. It's just evidence for us of active construction. And then the next slide. Yeah, this one
027sounded good. This one was um binding 34 change orders where PO modifications were approved within the same week and some the same day. So here again, we have to divorce purchase orders from change orders. And note that we'll always focus on that point of risk or liability. That's a pretty standard change order policy. Um especially because that timing difference we talked about isn't necessarily a failure of controls, but it could represent anything in our funding cycle, sequencing or bundling of work. But this is still a big one. Um because of that 34 when I looked, a lot of the change orders were indeed modified on the same day and not just a purchase order. I didn't look at any of the ones that were within a week of each other because I wanted to zero
028in on what would we be doing on the same day. So that's what we're going to look at. And the ones that I pulled up, I noticed that 15 of the 34 reference change orders were for the Chillin Pod conversion. Um they were grouped together. There were nine change orders processed on a day in October um all in the same day. Uh the nine change orders added up all together uh totaled $72,000. So they weren't bundled to avoid the $250, but they were bundled. And then um on February 2023, six change orders for Chill and Pod were bundled and that total was $155,000. There were also two change orders flagged as same day um purchase order modifications. Okay, I can exclude this one, but I just will note one of the change orders behind that
029purchase order modification was actually executed like 18 months prior to needing to increase the purchase order. And then I think what I have next is wanting to just show you what that looks like. So this is that monthly change order report I'm talking about that goes to the board. And here you can see this is the six chill and pod change orders from February 15th, 2023. They are all listed there. That's the date they're listed at. They have their amount um and they give you a brief scope. Next slide. And then if you click that link right there, what pops up is um and it's a live link on the document as we share it on the board drive. What links by when you click the change order number. This is our approval document. This
030is form 33 321.1. So it has all of our signatures, all of our justifications. I think if you go to the next slide, we zoom in on that so you can see what that looks like. Um, this is actually a real one. I didn't bother to block our project manager's name out. But this is what I was talking about. This is telling you what the classification of the change order. Is it an omission? Is it just a change? This was an unforeseen um condition. You can see in the scope justification box, it's for asbestous abatement. And then he didn't provide a value justification, but that's because this would be a pre-approved vendor through um where he mentions um Mr. Baylor. Uh he runs our hazardous material. So, this wouldn't be one that we normally vetted
031through our contractor versus through an internal, but it is a change order to the construction contract. And then this is just so you can see why he might have broken out his change orders. So, when we talk about invoices being multi-page, we're we're really saying they're really broken out. So, for Chill and Pod, which is a small project for us, right? Um it's still an 18page invoice. So, when you're looking at this cover sheet and you're seeing all these trades on the left side, this is every single trade, but every single trade has a page where it's broken out even further. And when you see the percentage, this is how serious it is. Like, if site work is getting paid 52%, it's 52%. That's what we see in the field. that's what we're paying. But
032if you look down at the bottom towards the bottom, you see one line item for change orders. So if you lump all your change orders together and if you look over here on this next um the right side is a change order page from the same invoice, you can see like it it's based on how you bundled it. So, while it would save how many signatures I have to make, um, if he had bundled them all together, especially since they did only add up to $72,000, it would have been less paperwork, but he is able to do a higher level of oversight by seeing each one because if you look at each one, it responds to not just usually a different trade, but also they're going to be executed at a different time. So, since
033you're verifying and we're paying based on progress billing, this does give you a higher level of oversight. So, it's not constituting wrongdoing. It's just constituting a choice in management and oversight. And then this final one, um, this says that we had one board of education change order approval for $3.9 million for what was then called the new Glenn Ridge Area Middle School. And then we followed that by a new change order for $139,000 just a few days later. Um, so the board change order, the the one that appeared to the board uh for the $3.9 million. So that was actually compiled by the project manager on May of 2022 because it takes a while to get in line for the board agenda and to get through that process and it did appear on the board
034agenda as noted on June 23rd, 2022. But what also was happening in another lane of life at PGCBS was the climate change action plan was being approved. So what you see here when it was improved in April um the project manager was working through a process to get solar panels um initiated in the design and that process and that negotiation didn't complete until June 17th 2022. That's too late to pop up on the board agenda with the other change order. So the change orders have different approval dates but this becomes a really good example because the system was closed for POS against old appropriations at that time. So, the PO isn't modded until August 31st, 2022 and again for the CCAP collar panels on September 2nd, 2022. So, it looks like it's 3 days apart.
035Um, but that's the reason behind it. And I'm going to show you on the next slide some of the documents. So, this is the June 23rd, 2022 board action summary with that $3.9 million. And then you can see on the right side, our project manager is requesting a purchase order modification just three days later. Um, but it won't be approved until August 31st, 2022, waiting for the system to reopen. Next, and then on this left side, you can see um between May 2022 and August 22, a new change order 2 was designed, negotiated, and approved to react to the CCAP adoption by the board. in April 22 and added solar panels to a Choa Middle School. She fills out the same form you saw before. Um and she actually attaches the items that I told
036you about how we verify um cost justification and the justification by the architect. And then I hope she called this a she called it an error on omission. Okay. And then G71 this is actually the actual contract modification. So it says 829 2022. This is the date the contract changed. And so that's also the date you'll see it on the change order log because that was the point of action and liability. Next slide. Um so then just some final notes on some of the recommendations. It's a note about we should develop SOPs with an external consultant. Um so our current SOPs were developed with Ernston Young during the 201620 2017 audit of capital program. specifically the change order process was audited there. So these processes match um their recommendations and um what's the next one?
037Internal controls are circumvented require secondary reviews. So I think this is particularly about the PO date timing um but we've talked about the control framework for change orders residing not in the PO system but in the contract execution where authority risk and financial obligations are occurred. Next. And then there were discrepancies between the purchase order log and the monthly board change order report. I think we have covered the difference. Um we don't see any instances where we approved a change order and it didn't appear on that change order log. But we will continue to report and make sure we're not missing any change orders. Um noting that the purchase order process, you know, is separate, but it also does have its checks and balances that we can certainly talk about. uh ineffective PMIS exists. We
038emphatically concur with this. There will be an implementation um consent agenda item on the February board agenda. Hopefully, we have full support. Um we are modernizing our tools here because visibility and efficiency really matter at this scale. Um you know, we we do a lot of work. We have maxed out what you can do on Google Docs and Google spreadsheets. And we really uh need a grownup PMIS system. And so finding one then was lack of standard operating procedures. Um I think it was lack of updated. And we we do agree that we need to update um some of our SOPs. Some of them refer to positions that have actually been moved to other um departments. the function and the process might not have changed but it still needs updating there. Also, we implemented SOPs
039kind of based on risk. So, we took a look at like what is controlling the most dollar amount, what do we have the most to lose, and we worked our way down that list. But now there are some that you would consider not to be as high a risk, but it's time to get to them. Like one of the ones that's just sitting on my desk and has been vetted and written um by my colleagues and just needs like to be formalized is for example just shared file structure and savings and it's not as risky as change orders or contract award. But it is because if you leave the system and all your project management files are on your personal computer, there's a risk there. So we're working our way down that line. And then
040this is just a note that this is where our procedure manuals live. This is our internal staff portal for capital programs. Every member of the capital programs team has access to it. It has our approvals. Um it has templates based on comar, based on state APG, based on board policy, and based on AP. Um invoices, uh it was just 12 were paid outside of 30 days. Uh our fiscal team compiled some numbers in response. Um, and it said that 99.8% of the 4,200 invoices processed during the audit period were paid within 30 days, which exceeds the district's 97% standard. Of the 12 invoices noted, two were submitted late by the vendor, three were returned for vendor correction, and six experienced delay because approved change orders were still being entered um into Oracle, which is a
041nice way of landing it on the project managers, and it's true, but that's still a pretty good finding for us. That is um a level of effectiveness and efficiency that we've been really working for for a long time. Um and 95% of invoices were reviewed within three business days. And there have been a lot of improvements implemented over the recent years. This too though would benefit a lot from PMIS. It would benefit a lot from digital invoice processing throughout the system as well. Uh inadequate supporting documentation. I think now we have left the capital findings and we're moving into some of the purchasing findings that were um kind of added on to our audit. Uh it said six purchase orders didn't have an RFP or competitive solicitation documentation and were high value or above 50,000
042and three didn't have assigned NOA resulting in inadequate review and controls. Um, I think what was looked at was what was in the purchase order system and the procurement files are only partially attached to some of the requisitions when they're made. Um, there are Oracle file limits, but also what we're sending to purchasing is a copy of what lives in their files. So, the full files for all purchasing contracts resides by KMAR uh in the purchasing office behind key and lock. Um, so I don't think there's any instances where they don't have a signed notice of award. We might have expedited a purchase order and gotten approval to attach the draft notice of award and assigned recommendation of award to the requisition, but we would be sending that to the person who owns and signs
043the notice of award. And then failure to maintain an approved vendor list. Um, this is about two. It says two purchase orders were issued to vendors who didn't have an active approved vendor status at the time of transaction and 14 payments were processed to unapproved vendors. I think that's referring to being um current in I supplier. Um, but it's not possible to put a requisition in for a vendor who's not in I supplier. It is certainly possible to pay somebody um who's been working on a multi-year project and purchasing needs to update that list. It's not approval though, you know, it is it is I supplier. So, it's not it's not like your contract with us has lapsed and you're no longer an approved vendor. You might need to send us an updated certificate of
044insurance or we might need to just verify your contact information, but that also lives in purchasing. you know, we don't have any um say so or responsibility there. And that's the last. With that, I'm ready for questions. Thank you so much, Miss Jackson. Thank you so much for the presentation, Miss Jackson. Um I will now open the floor for any discussion from committee members. I do have a few questions if no other committee members do. Just wanted to give an opportunity. Okay, I I'll get us started. Um so, um Miss Jackson, thank you so much for going over the findings. I just had a few um hopefully rather rather simple questions, some clarifying. Um so one with regard to um 3B the 34 change orders um modification finding you mentioned that um there was a
045need to diverse I'm sorry divorce purchase orders from change orders and you mentioned that um some of the delays that we were seeing were just normal system lags. Can you speak to to what you mean by that just for just for clarification? What are the normal system lags specifically? >> I wouldn't call them delays. I would just say that a change order is just very different than a purchase order. So the change order changes the contract, but the purchase order is the payment vehicle. So we have multi-year funding. So something like Sutland didn't get $400 million on its first year. It gets a little bit every year. And so for example, we will fund its purchase order a little bit every year. There won't be a change order action necessarily, right? There's still a contract
046that's multi-year funding. So a lot of times our funding action is not a change order action. it is just a multi-year funding action. Other times that might be delayed because um the system closes. It has that year and close process. So you can approve your change order in June on June 30th, but you're going to wait for the system to come back up for end of the year before you can modify an existing purchase order. So sometimes it's just about system cycles, sometimes it's about multi-year funding. I might even be missing something that one of my colleagues, they look like I'm missing something from their faces. But there are multiple instances where I've seen us also just bundle that. Like we know this isn't going to be executed. Like maybe it's a final thing like
047a landscaping thing, but we're in early sight construction. So it's a change order, but there's no press to increase the contract today. In fact, it might even be increased in another fiscal year. So, there is just a difference in your contract and how we're going to pay you. Now, we've messed up when we can't pay you. That's when we know we we we lagged and we didn't get that right. But, as long as we have the money when we need to to pay the bills, we know that we manage that pretty well. >> I'm add one more thing because one of our one of the things we get beat up about is leaving appropriations unspent. So for that example with Suland, if we did fully fund, it would make Suland whole and it would it
048would reduce some of our anxiety about will we have enough as we're kind of forecasting out because it's an imprecise thing. You ask a contractor what they think they're going to spend. You base everything on this draw schedule, but if you get it way way high and it's just sitting there, you get penalized and you get less future money, but you're also doing less work. Like it might not seem like a lot to have overfunded Sutland by3 or$4 million, but when you know the state of our roofs and you know that's two roofs right there that just sat on the suit purchase order. No, that wasn't a good use of capital dollars. But of course, if we we under we go too low. Now we've we've jeopardized the project. So we don't want to do
049that either. So that's part of some of that internal inks that we don't get to talk about a lot, but it's very much a part of what we do. >> That makes sense to me. Um thank you for explaining that. and I will um um uh board member Jackson, please um and I'll come back with additional questions. >> Thank you so much. Um just just one quick question. Um uh thank you for the presentation. I don't think it's been broken down with that level of granularity before. Sorry for my son coming up back upstairs as soon as I unmute the mic. >> Okay. Okay. Give me one second, baby. Um uh what was I supposed to say? Uh the um yeah the change order modifications. Uh that's the question that I was uh about to
050ask. Um have we explored um there was just quite a few of them and so I want to know do we have we explored any alternatives to minimize the number of change orders? Is there is there is that are we operating um at the industry uh you know standard on how we handle the change orders and modifications in general and then um if we're not have we explored some ways to improve our process so we don't have as many >> I'm going to start it off then I'm going to ask Will to finish it up but every time we've been audited on our change orders or we look overall how each project is doing we tend to be a little under industry standards There are some projects that have of course been higher and some
051that have been lower. There are also projects that return money when they're completed and they've had no change orders and that sounds like from a fiscal standpoint that seems like the win, but I I assure you it's not the win. Um when there is money still available on that appropriation, um I would encourage my team to spend it because it doesn't return to another project dollar for dollar because appropriations aren't money in your bank account. They're just appropriations, an ability to spend, and if you have to go back and move it, it doesn't come with you dollar for dollar. So since our schools are in such bad shape, some of those projects that ended with our credit had really correct in terms of they executed the scope. But just a small example is like if
052you go to some of I won't name the school, but if you go to a school where we did a small renovation, we did hazardous material abatement in the floor just on the part that we did. Now, we had enough money to go ahead and do the whole hallway because the project was coming in under budget, but instead we got a credit and it wasn't incorrect for the project manager to do that. There's no document. This is a definitely an area where we rely on both our project manager's expertise, but also hopefully a commitment to building nice schools. And so, what I wish we had done instead of returning that money where we couldn't get it back dollar for dollar is going ahead and abating that full hallway. That's the hallway you see when you
053open the door. So, when you go to our schools and you see little patches in those brown tiles, like sometimes that's what happened. We did what we had the scope to do. Sometimes it's all we had the money to do. But every now and then, when you have as many repairs as we need, if you have the money in your budget, I would encourage um diligence in the pricing. And while we have a full construction crew, sometimes that's a time that we um shore up our building services team and we perform what are really work orders. Will >> Yeah, I would just add that um and and Shayla had hit had a lot of information earlier on, but um overall construction industry standards is roughly 8 to 10% in terms of just change orders. And
054I want to say that in past uh audits we were somewhere around 3% 4% uh operation in terms of percentage of change orders as a as a whole. And so when you ask the question are we below or above industry standard uh in the past we definitely have been uh you know within um that eight 8 to 10% but honestly you know much less than that. Um, as Shayla was mentioned earlier on, you know, I think you know this also, Chair Jackson, that, you know, many of our all of our facilities are, you know, except for the the newest, you know, probably 30 or 40 facilities are extremely old and a lot of our projects are renovation projects. Uh, they're they're not uh just going in there, you know, demolish demolishing the whole facility and
055building brand new. And so when you're doing renovation projects, there's going to be a host of regardless of how good your design team is and how much due diligence you try to do, uh there's still going to be a certain element of uh unforeseen elements that will that will trigger, right? Uh and then ultimately end up in a change order. There will also be some of the code compliance requirements even though you go through uh an extensive um permitting process uh you know some of which last two to three years. Um once you get into construction, it is still up to that that permit inspector. Uh they have the autonom autonomy to say, well, listen, you know, yes, I understand your drawings uh are showing, you know, 300, you know, uh smoke detectors in the
056facility, but we want you to add another 50. Uh or you there strobes, you know, in the in the hallways, but you don't have them in the classrooms. We need you to add that. And and that is that's something that is is unforeseen. That's something that you you just don't anticipate. But that also equates to to change orders as well. And so um yeah, we have a a ton of just protocols in place in order to negotiate change orders, in order to fight back on change orders. Um but you know within you know our belief is we're definitely within that you know one definitely within the 10% industry standard and much less than that and that we do a a a fine job between our design teams our architects our PM team our construction managers
057that assist us as well of of vetting and and really fighting back and pushing back on the cost in order to get the best value for the school district. Thank you, board member Boozer. >> Yeah, thank you so much. Um, uh, thank you, Director Jackson, uh, for the response to the audit. Definitely. You answered one of my big questions which was the the context of some of the numbers and um particularly you know the further into the report um around the 99% um was the other half of the equation. So that's very very good for us in the public to understand. Um, I did you the modernization piece that you were talking about reminded me of the legislative day when Alex Donahghue addressed the board and the general assembly on this concept of six best
058practices for a capital projects um team and for specifically for PGCPS. And I was wondering if you could speak to speak to all of that and how it would impact um this this type of auditing that we need to do. Thank you. >> Remind me what he said. >> Oh. Oh, I was hoping that you had the six the list of the six best practices. >> I know. the techn the fact that we we left your division with outdated technology that even the state inter agency on school construction is concerned for PGCPS but we need our legislators to understand what his message was is to the delegation this is why you need to invest in your school system. >> I got I got it. Yes. Yes. That is what we are working on doing with
059this implementation. And so we're looking at a software that's called um well there's like three. They're all um it's Cahooa Procore. There's like two other big ones. There's they're only as few that play in the sandbox as big as ours. But what we really like and what we agree with Alex is is that they make asset management and capital replacement. Uh because a lot of what building services does is they do a lot of repair work but we don't have an ability to actually easily quantify like where does that money go? like which work orders is it going into, where are the assets? We have we have Google Sheets, but where are the boilers that are at the top of the age? If you saw the spreadsheet that tracks the roofs, you would really be
060like, "This is not a prioritization process. This is a spreadsheet." Um, and we would love to see that be live. We would love to see it be updated. We would love to know what got repaired, but we would also love to know what's just prioritized based on age, what's old, but not failing. that would also be very helpful because some of our older equipment isn't failing. Um, and so we have to kind of make that assumption sometimes. And he's also just talking about being more efficient um, with our requests. Like anytime somebody asks us a question, it's a research project and there is a I think sometimes when you're not transparent because your processes are outdated, it looks like there's something going on when there's nothing going on. And so the way we could tie
061into building services better uh with a a modernized system, the way work orders could be part of capital planning um because that EFMP is supposed to be supplemented by a comprehensive maintenance plan that's always part of our CIP request and that's always something that we struggle with and it's just because we're just trying to do with manpower and like will and might what should kind of just be an automated like where is the playground prioritization list and we're like hold on let's go meet with the ground shop and let's pull up our spreadsheet again and make sure it's still valid and none of these have been replaced already. So, there are so many pieces to what he said, but I'm going to stick with that for tonight. >> Just to add addition additional information to
062that, one of the components he was mentioning was just adequate funding for maintenance and and and maintenance staff, right? Um because we we do not have the funding that is truly needed in order to in order for maintenance to to facilitate performing the yearly maintenance and preventive maintenance. uh that really would do us good service for the district. Ultimately that then equates to failing systems and additional increased costs for capital programs deliver projects as well. >> Yeah. Absolutely. The the two going hand in hand has been has been the the big this deferred maintenance piece in the in the school construction that we've all been working on together for a decade. And really, it's clear to me that we're starting over with funding. You know, the the jump in funding streams for P3 have have
063cycled and and we are now uh faced with with that advocacy work around the funding. And I I know the stress of that, the impact we can see in in reports like this. And uh yeah, I just want to thank thank you all for you know moving along with this board with this you know this the audit committee being you know what uh its own standalone committee since 2023 and we're going deeper and and revealing you know having this opportunity to just go into the layers of our divisions with the public and and that means more eyes and more scrutiny and I just want to thank you all for what looks like a tremendous amount of uh time in detail to do the presentation tonight. So, thank you, >> Miss Thorts. >> Thank you so
064much. Um, I know I'm not a committee member, but I just wanted to um ask some questions, I guess, or try to clarify some details. Um would you mind actually sharing the screen one more time with the change order um analysis where you guys had the finding and where you guys kind of laid out those um numbers. And so I know um my team was tasked with completing this audit. Um and so in looking at some of the support and things like that, I just wanted to go in and kind of like do a triple check myself just to make sure I'm not seeing something incorrectly or anything like that. And so I have here like two different change orders and those are the ones that are actual change orders. These are not um actual
065purchase orders. Is that correct? Like the justification memo information and things. If you could just confirm >> what's the thing you're looking at? What are the two? >> Um go back um to an ear. It has like the yellow highlighted box where it says board approval required. One more. You passed it. Okay. >> I think it's this one coming up next. Go back one more. One more. That right there. That is a change order request, correct? Or justification memo. Okay. So, I know in like some of the support that I wanted to pull up and just to like cross check and reference this says the project name is fiscical year 18 Greenbuilt Elementary School of Chiller. And we have two um request dates for change orders that are dated on 68 2022. And when I
066combine those two together, it does exceed the $250,000 threshold. And so I noticed also mentioning to like what Mr. Smith spoke about regarding code compliance, is that normal? Because this is where we were finding issues to kind of accumulate how we came up with those items. So, if maybe you could clarify that, I'd appreciate it. >> So, this is actually chilling pod. It's FY20 chilling pod. It's >> it's not a chiller. Um, >> and so it's one of the six that were approved on the same day. There were nine on one day and six on another day. So, it's one of either batch of those. >> So, Green Belt is considered the Chilling Pod. No, >> no, that's a separate facility. >> Okay. So the there's two that I'm looking at here where it's saying
067these are like um change orders for the green belt chiller. Um and again there's one for 153 481 and then there's a second one for give me one second to go down um 110. So this is where I think I don't know if there were some issues with the request that was fulfilled but these are two different change orders on two like the same day that would exceed when you combine them. I think there they are more than two in a three and a half year period that would exceed >> right >> for the same day though and so I think that's where um the team is identifying those instances as being a potential circumvention of getting the board approval where I see like the project name the two change orders on the same date
068and the amounts are not under that threshold >> it would still be on that change order report that you just saw It's not something that I think should happen very often, but I didn't. >> But yeah, we're we're talking about 34. Um, we don't see 34 and we definitely don't see 75 change orders that are a problem. And when the number is put out that of the 200 change orders, 75% have a finding, that's the thing that's dangerous when it's inaccurate. Um, so wanting to like roll that back and look at what a a real number is and what a a real modification is is a different is a different conversation um than the one we initially had where like it was usually about purchase order modifications. Um, but the majority of what we saw,
069we didn't see anything that wasn't signed. Uh, we didn't see anything that didn't go to the board for notice. And so I think that's our our point. Um, I I guess the question for me now is would the two different change orders have to go to the board for approval if they're under 250? So even though there are on the same day, they're less than 250. Would it be presented to the board because they're less than 250? Is this for is this referencing the same project, same school, same project, same vendor? >> That's correct. >> Okay. We would probably have a look into it. But I mean, if if you look at it from that standpoint, if it was broken out in two different change orders, that then does not then trigger the board BAS.
070uh unless it was caught afterwards. If it if it was fully processed and approved, then it didn't get triggered or didn't get caught. >> Okay. >> Yeah. >> And we can definitely maybe like recircle back to this sometime next week or this week if you guys want to just to kind of dig into some of the details. um maybe there were some um maybe it's some missing information that the team didn't receive or maybe something wasn't clear on their end in terms of the explanations, but I would definitely like to make sure that you know everything is accurate as is how we reported it. And so I just want to make sure that what I'm looking at because that's what I'm basing my findings on were correct. I think the unfortunate part was the majority
071of that time we were going back and forth with clear disconnect on what the termination really was and and we tried explain in numerous meetings with the personnel that our policies are about change orders. Our policies are not about purchase orders, >> right? >> And so I think unfortunately it just you know was a lot of time really was dive down dove down into that. Um, and I I feel like it it just wasn't as uh um a place where we were I guess everyone's willing to just understand that or or maybe disconnect that never really got ironed out. Um but from our standpoint, our policies are about change orders and we we're providing this information. It's about the policy that is established in order to make sure that we are um doing um the
072due diligence of a department, being good stewards of of the financials, still moving forward with construction and minimizing any delays. Um >> and and you know what and I would I would probably say and and I you know you can we can talk about it and you can forward information but you said that those change orders were June >> June 8th >> and I think probably what happened that is right at the fiscal year in the uh cutoff and at that point there are no board meetings in the summertime. the next board meeting occur into August, maybe September. And that point just to ensure that those projects still move forward without any delays. We didn't incur any additional costs and that those schools were that school was still able to open uh for school opening
073in in June. That's probably why they were processed at that same time >> because if you look at that June date there, there is nothing further afterwards. There's no July board meeting >> and we would have had to have information like in April to get to the to the June board date. So that's probably what happened there. >> Okay. >> Yeah, I saw a a few of those with that timing and you know, one of the things that we would like to do, um, the board policy has some notes in it about what we could do in emergency situation. Um, but I have tried it and since it's not done, it's one of those things like why are you asking me to approve this like in July or as an emergency or just to the
074board chair? But it would be nice because summer is our busiest time and so it would be nice to have like a a written like emergency policy that we could actually follow because capital programs is never going to allow a signature to cause more cost than the approval itself. So we're not going to let our contractor walk off and incur a $6 million delay and not open schools for a $260,000 change. We're not going to do that. But we should have a way to do that that's within the current policies. And so where we don't have that what we really rely on is that we still report it. We still put it there. We don't switch days. We don't make it look like it's another day. We're not holding it for a week or two.
075We're just putting it out there. We're putting February 23rd, 2022. We know how to change dates. We put it out there. We put it on the log. And we're relying on the transparency to communicate that this isn't something done in the dark. These are change orders that we process. All of the links are there. all of the change order files behind it and the justifications are there all the way down to the tears and the negotiation record like it's all in there and so we are putting a lot of weight in that because it's all we have where those gaps exist but that we would be very willing to talk about. Thank you. Are there any other questions? Okay. Um, so I do so two other quick questions then from me. So you referenced um
076the PMIS and that you all started looking for um it sounds like you've started looking for alternatives already and you're planning to present options ideally in February. Is that is that what I heard you say, Miss Jackson? >> No, there's there's going to be a solicitation for the final software, but there there is an implementation vendor um who is an expert at legacy Oracle systems because there would have to be some tie-in and yet we don't want to live and die with Oracle. We also want to stand alone and hopefully plug and play into uh something more suited. But right now, we are managing our capital dollars in a system that is designed really to buy textbooks. So, it's it's been really difficult to manage our appropriations. Um, I mean, really difficult. It's we used
077to have to take down every purchase order we had and bring it back up every year because the rest of the system did like that's right in construction time. We just stopped doing that a few years ago. So, we're we're really excited to be looking um at somebody who can understand and have implemented at an LEA of our size uh a whole management system. But that that part where you tie into Oracle is where we fell apart last time. So there are a couple softwarene neutral vendors, not many, only a couple who are also like legacy Oracle certified and won't find our environment either terrifying and it won't torpedo the whole improvement project. So that's what will be coming before the board is one of those um one of those vendors. >> Understood. Thank you.
078Okay. And then my my last question was excuse me it was regarding your standard operating procedures. Um, so you shared um looks like I believe it was a page that where you house all of your excuse me where you house all of your standard operating procedures and you mentioned that um you feel that most of the um I guess adjustments right or adaptations to these would follow um I guess the it would follow the new PMI which sounds like it may not be you know I'm I'm thinking about timeline right and so my My wondering I'm sorry >> supposed to be 12 to 18 months for implementation to go live. >> Okay. So my wondering is prioritization um of these um updating of these. Are there any that you are planning to update or prioritize
079um you know in the near future even absent the the new um PMI? There is a priority list and it is in order and the only thing I know for sure is the one that I've been holding up which no I think we published it this maybe the share drive folder. No. Yes, there's a nod but we haven't like trained on it. Um so that's I just know that that's next but I don't know the whole priority order off the top of my head and looking at these aren't ringing any bells. Um I know that for example like project project assignment is going to be revised. We have planners, which is great. We have design architects now on staff since we've been able to expand. And these project assignment and budget processes are from a
080time where we only had project managers. So, that's not a major um update. Uh it's just something that we have to do. There are others that I think where I feel there's a risk involved like budget modification. I probably would pull that. I think when you see the priority, if you would like to see the priority order, those are at the top. And then I think because some of the reason I think some of the purchasing stuff was in our audit is there was a period of time where purchasing was housed with us. And so some of these actually reference them like their capital programs employees. Um so we might still follow the purchasing request form but it might refer to a construction procurement supervisor who answered to the director of capital programs and that
081doesn't exist. It doesn't mean the solicitation looks any different. It just needs to be updated. Actually think that got updated last month. So that's a bad example. But some of it is just editing and some of it is rolling out a new procedure. >> And director Jackson, I would like to add to that um using the consultants to benchmark some of the um the um standard operating procedures would allow us to um build a more robust um procedures um as well. So using those consultants to help benchmark against other um highlevel top um organizations will give us an opportunity. Thank you. Are there any other questions from committee members or staff? Okay. Well, hearing none, it sounds like there are a few um maybe next steps or there are some follow-up conversations to be had.
082um would love to ensure that the conversation that follows that the information makes its way back to the board audit committee whether it be um you know via email um or Miss Thorps if it's more appropriate for you to bring that information to our next um agenda setting meeting would appreciate the update there um but if there are no additional questions I would like to thank you all for coming to our meeting this evening ing um specifically capital programs team um and for providing um I think as chair Jackson mentioned just some in-depth information to start um giving a little bit more um insight and clarity into um contracts and and more of more of your work specifically um and then of course providing an update on the audit review. Um thank you all for
083the thoughtful questions committee members um and also of course for the responses. Any follow-ups from tonight's meeting um will be shared upon receipt. But there being no further business, the time is now 7:10 p.m. and the January 12th, 2026 Board Audit Committee meeting is adjourned. Have a good evening everyone. Thank you all so much. >> Thank you. >> Have a good night. Good night.