Maricopa County officials confirmed Wednesday that an independent auditor is investigating allegations of financial mismanagement by Superintendent Steve Watson.
The review is being conducted by Heinfeld, Meech & Company, a Tucson-based firm that specializes in government and nonprofit auditing. The two-stage audit will include a restructuring of Watson's financial operations and a review of its budgeting, finance and procurement practices.
County supervisors commissioned the company in October, and officials plan to release a report in the spring, county spokeswoman Fields Moseley said.
The news comes after the county said Watson repeatedly ignored standard accounting principles, misreported funds and failed to submit audited financial statements for the lodging school districts his office operates within the deadlines required by state law. The announcement came after regulators made the allegations in May.
The district currently operates a high school called Hope Academy, which serves about 80 students with unique challenges, including youth in foster care.
County officials also said Watson had to pay up to $2.8 million in Juvenile Detention Education Program funds to the Arizona Department of Education and up to a maximum in grants to the federal government because his office failed to accurately report program operations. He said he may have to repay $1.6 million. County officials say educational costs for the juvenile detention center were improperly mixed with funds for Hope Academy.
Mr. Watson has long denied the allegations. He said the county did not refer to the district's most recent financial reports when analyzing the numbers, and said the lodging district always strives to adhere to its financial practices.
Watson said he repeatedly asked county officials to create a fund for juvenile detention funds to avoid confusion with Hope Academy's finances, but that never happened.
He agreed to the forensic audit after a two-hour public exchange with county supervisors during a budget meeting in May.
Spokesman Tim Shiffert said the superintendent's office is “enthusiastically supporting” the review and expects “initial deliverables from the audit later this month.” Watson and his staff “do not expect any significant findings,” Schiffert said.
County officials estimate the audit could cost up to $160,000.
Sasha Hapka covers county government and local issues for The Arizona Republic. Any tips?please contact her sasha.hupka@arizonarepublic.com. Follow her on X (formerly Twitter). @SashaHupka. Follow her on Instagram or in the thread: @sashahupkasnaps.
