Taking inventory no easy task for school district

The Clark County School District has difficulty tracking its $160 million in equipment -- everything from computers to musical instruments and $5,200 milk shake machines, a Las Vegas Sun investigation has revealed.

Among some of the items missing from Las Vegas High School alone: a theater spotlight, two ice making machines, a sousaphone, an exercise cycle, two ovens, a 42-by-42-foot wrestling mat, and a portable, electric grease filtering machine.

"A lot of stuff goes unaccounted for just because of a lack of good inventory and accounting," school district business manager Don Lee said. "It's the responsibility of each school. How reliable they are depends on how much the schools comply."

Last month, district officials began the annual cumbersome process of trying to inventory more than 76,000 pieces of equipment valued at $500 or more.

Officials say they likely will uncover what they found last year: nearly $6 million of $160 million worth of district property turned up missing or stolen, was deemed worthless and discarded without documentation, or was just plain lost.

But the actual cost could be more. Officials admit their outdated inventory system fails to accurately uncover how much of the district's vast equipment holdings disappeared during the year. Ultimately, students lose, they admit.

"If we have computer labs where the computers are missing, kids miss out," Las Vegas High School assistant principal Kathryn Vasquez said. "If microscopes are missing from science labs, kids miss out. We don't want instruments to be stolen, because kids miss out."

The district's inventory problems are rooted mainly in a system that relies on overworked staff who do manual checks of thousands of pieces of equipment -- at a time when most large companies are using bar codes and scanner guns.

For instance, Reno-based International Game Technology, which has roughly $150 million in parts and finished product inventory, uses bar codes to keep track of the slot and video gambling machines it manufactures.

"I'm not saying things don't occasionally disappear, but it's pretty hard," IGT investment relations officer Bob McIver said. "You can't go in and out of the plant without having the proper slip saying you're taking something out."

Here's how the district inventory system works:

Each April, the district's accounting office spits out about 76,000 computer cards, each describing a piece of district equipment.

The cards are bundled by school -- high schools have as many as 2,000 -- and mailed to each building. Teachers, school secretaries and principals are expected to walk around the schools to manually check that each piece of equipment matches a card.

The school staffers are then to report anything missing or broken.

But the task is so overwhelming, so time consuming, that some schools don't even bother, officials admit. Some schools simply send a memo back to the district central office claiming that every piece of equipment is accounted for.

District accounting director Keith Bradford said the district has no manpower to check up on schools. He also said it was nearly impossible for any school to have no equipment broken, stolen, lost or discarded during the year.

"You can't have a district this big and not have some things end up missing," Bradford said. "With this amount of equipment going in and out, it would be surprising to see that everything was fine."

Last year, the district's outside auditor, KPMG Peat Marwick, noted, "in many cases, inventory cards are not returned.

"We recommend that district management formulate more rigid guidelines with respect to the safeguarding of and accountability for equipment at individual schools," the audit said.

In response to the audit, district officials said they would develop better procedures to track and maintain "major computer equipment," and would expand the scope of school audits to include inventory.

Several inventory experts said they were surprised at how the nation's ninth largest and fastest-growing school district conducts inventory.

"It amazes me that they use these cards instead of a much more sophisticated system in which an internal auditor or an outside source can actually verify their assets to their fixed asset register," Flint Richardson, a manager at accounting firm Arthur Andersen, said. "I would think they would really want to monitor those responses from the school."

Problems at Las Vegas High School are probably representative of many schools that have done little inventory in recent years, officials said.

"I don't think any of our high schools do a very good job with inventory," assistant superintendent for secondary education Len Paul said.

Las Vegas High is one school that has not itemized lost, damaged or outdated equipment in the past few years, accounting office officials said.

Assistant principal Kathryn Vasquez, in her first year at the school, has undertaken a massive project to track school equipment.

She is directing teachers in an effort to check and double check classrooms, staff rooms, even a forgotten storage area under a walkway, to itemize materials and log them in a computer.

"We went on an Easter egg hunt, room-to-room to find what was on the list," English department chairman Ron Fick said.

Fick directed a search of 22 English classrooms, uncovering a cache of equipment, such as typewriters, that no longer worked or had long since been replaced.

"It's definitely been a lot of work, but it wasn't a waste of time," Fick said. "It's taxpayers' money."

After hours of combing, about 300 of roughly 2,000 pieces of equipment have not been found, Vasquez said. Some of the missing items are computers, probably old machines. According to district inventory lists, the school is supposed to have 606 terminals.

"I can't imagine we have that many computers," Vasquez said.

Many of the missing items at Las Vegas High, including a baby grand piano and a dry ice making machine, probably never even made it to five-year old school, Vasquez said.

The new Las Vegas High opened on East Sahara Avenue in 1993 when the old Las Vegas High on Seventh Street became Las Vegas Academy. Much of the equipment in the old school was transferred but some disappeared in the move, officials said.

Vasquez said the staff at Las Vegas High also was itemizing equipment at the school that was not on the district inventory list.

Vasquez said the school would have a much easier time keeping track of equipment after the labor-intensive search.

She also said she was making the school's eight department heads responsible for equipment losses.

"When we started this, I went to the principal and said if we are going to do this and really do it right, it's going to open up a can of worms," Vasquez said. "In a building this size, there has to be a high degree of organization."

In terms of missing inventory, officials downplay theft, saying it is unlikely most missing equipment is stolen, either by district employees or burglars.

"Someone doesn't steal a copy machine," district chief financial officer Walt Rulffes said. "It just gets shipped off somewhere and the paper work doesn't follow."

Rulffes said he estimates that less than half of last year's $6 million in missing equipment was stolen. The majority of it was misplaced or broken and discarded without record, he said.

"That would be human error," Rulffes said. "It's paperwork issue more than anything."

Still, theft is a concern for district officials, who watch over 219 schools full of valuable equipment.

"These buildings have a lot of doors," Las Vegas High principal Barry Gunderson said.

And district business manager Donald Lee observed, "It's not like being in a bank environment. It's not absolute control."

Among the missing equipment district officials believe was stolen since November 1996 are 16 lap-top computers. The computers are missing from 10 school cafeterias where kitchen workers use the machines to track student lunches.

The thefts have baffled school police. Investigators have no suspects, Sgt. Ken Young said.

Food services coordinator Barbara Leslie said department officials suspect everyone from disgruntled students to a construction worker, but not kitchen employees.

Leslie added that the district's food service department has 1,596 lap-tops, which she said are safely locked up at night.

"When you consider the number of lap-tops we have, it's kind of amazing we don't have more of a problem," Leslie said.

The district's top officials say they would like to modernize the inventory system, despite an estimated pricetag of $500,000 for bar codes and scanners.

Superintendent Brian Cram said money for a modern system could be earmarked as early as the next budget cycle.

"We try to spend as much money as we can right in the classrooms," Cram said. "But we want to maintain good inventory and not lose materials."

All seven school board members, who ultimately determine the district budget, said they agreed the district needs a better inventory system. But they stopped short of vowing to spend the money for one.

"What we need to determine is how much would it cost to implement this versus what we lost in our inventory," school board member Mary Beth Scow said.

"Our problem is we're trying to educate children first, and some people might see some of those other expenditures as frivolous," board president Susan Brager said. "In the long run, it could be a good investment."

Board member Shirley Barber, a former elementary school principal, said the manual inventory process was time-consuming.

"Now you're getting more and more equipment," Barber said. "If we could afford a bar code system, it would really make a difference."

Bar coding equipment is very much like bar coding food in a grocery store. For instance, Smith's Food & Drug stores all over Las Vegas are beginning to use computerized lists to record food as it enters the store, manager of store systems Robert Murphy said.

Three times a year, store workers also use scanner guns to swipe all the food in the store as it sits on the shelves.

And food sales for years have been recorded when shoppers purchase it. Murphy said the "perpetual inventory" helps the stores track losses.

"We believe we've paid for the process many times over," Murphy said.

Among the companies that offer new inventory technology is Intermec Inc., an international company that contracts with 11 casinos in Las Vegas.

"It's accuracy, it's efficiency, the list of benefits is significant, whether you're a school district tracking overhead projectors and baseball bats or a warehouse tracking raw materials," Intermec spokeswoman Christine Goetz said.

School accounting office officials said they would love to have a bar code system. They also say that in an ideal world, the district could assign a team of auditors to do inventory at schools all year long, freeing up school staff to concentrate on educating.

"Unfortunately, we're not there," Bradford said.

For now, school staffers like assistant principal Vasquez and her secretary, Jill Horton, continue to make rounds at their schools.

On a pass through the gym locker rooms one day last week, Horton peered into a gym office and spotted a portable public address system.

"I'm developing an eye for this now," Horton said.

Inventory for the district is supposed to be completed by the end of the school year -- June 4.

"We've got to give them plenty of time," harried district accountant Dorothy Greissel, the district's only full-time employee dedicated to keeping tabs on district inventory, said. "There's a lot of stuff out there. And they've got to go find it."

archive