After embarrassing audit, education group tries to rebuild its reputation

A group that provides school districts with training, technology and other services is working to clean up its image after a recent audit uncovered chronic financial mismanagement.

The audit of Technology, Information and Education Services found nothing criminal, but it did discover that a remodeling job exploded in cost from $300,000 to $3 million. Auditors also found that sloppy bookkeeping kept the organization from collecting fees for hosting events for years.

TIES, which hosts school websites, sets up computer networks, stores and analyzes student test data and trains teachers, faces a budget deficit of $1.3 million, according to its annual financial report, released this this week.

As a result, the organization is considering job cuts and ending some of the group's services.

Member districts, who pay for the organization's services and finance most its $31 million annual budget, are watching the process closely.

"It's the kind of sloppiness we're just not familiar with," said Rob Rapheal, president of the Forest Lake Area School Board.

From its sprawling 1930s art deco headquarters near the State Fairgrounds in Falcon Heights, TIES offers dozens of services to its 49 member school districts, most of which are in and around the Twin Cities metro area. Former Executive Director Betty Schwei­zer retired in September.

Her successor, Executive Director Mark Wolak is trying to fix the problems.

"There were some past practices that I think must be corrected — we will correct them," said Wolak a former superintendent of the Mahtomedi school district. "Mistakes were made. We want to get to best practice in everything we're doing with both our finances, with HR, with our customers, and we're underway, we're doing that."

Wolak said he's trying to run TIES like a school district. That means fixing budget problems immediately. Although TIES has saved about $500,000 by not filling vacant positions, it may have to make another $900,000 in spending reductions — likely by laying off some of the organization's 120 staff members, and by cutting some of the services TIES offers to school districts.

"We really have to be really careful about what we stop doing so that they can prepare for that and they're not caught by surprise," he said.

Wolak said he's reached out to member districts to let them know his group will be better stewards of their money in the future.

Among them is the North Branch school district, which has used TIES student information system to store test score data.

North Branch Superintendent Deb Henton is confident Wolak will fix the problems at TIES. So far, she said, her district has not considered ending its relationship with the organization.

"No those conversations have not happened," Henton said. "And I don't anticipate that they will either."

Other districts are taking a wait-and-see approach.

In Forest Lake, Rapheal was surprised at the depth of TIES' mismanagement of the funding it gets from school districts, money that ultimately comes from taxpayers.

Forest Lake pays TIES $350,000 a year for web hosting, as well as supporting student management, finance and payroll software. The district also pays about $20,000 a year for printing services.

Rapheal said although TIES appears headed in the right direction, the district needs to see major changes over the next year.

"If they're embarrassing us with their business model then, we'd have to find something else," Rapheal said.

Wolak, knows his organization aims to regain the confidence of its members.

For several months starting in January, Wolak said, TIES will hold listening sessions with member districts to find out which direction they think TIES should take.