Oklahoma City school district has millions in unpaid bills

Sunday, May 25th 2003, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ The Oklahoma City School District owes more than $3 million in overdue bills and some suppliers say the district's business is no longer welcome.

More than 40 suppliers have placed the district on credit hold, The Sunday Oklahoman reported in a copyright story.

Large textbook publishers, bookstores, standardized test suppliers, electronic stores, grocery stores and an office supply chain are among suppliers refusing to do business with the district.

Some companies have turned the debts over to collection agencies, while others are threatening to sue.

``I've sent a letter to every single person I thought could be involved,'' said Dave Muzzo, a manager at Study Island, a Texas-based company that sells test preparation software.

``We want our money, but I also just wanted someone to call and explain what was going on.''

The school district provided The Oklahoman with records indicating it owes about $3.3 million for bills that have been placed on hold while the district tries to sort out a financial mess.

School board Chairman Cliff Hudson ordered in September that finance officials not pay the district's unpaid bills from the fiscal year that ended June 30, 2002.

Hudson said he was concerned about whether the district had enough money to pay the bills because state budget cuts had left the district $5.7 million short of anticipated revenues and a new computerized financial system had caused uncertainty about how much was owed to suppliers.

But Hudson said the current crisis is a sign things are improving. The purchasing system has had problems for years, and the new system and payment freeze were needed to get it under control, he said.

School officials say they are fairly current in paying this school year's bills.

The school owes about 400 individuals and companies for goods and services bought with purchase orders issued more than 10 months ago.

There are probably ``a thousand or thousands'' of unpaid bills that date back more than 10 months, said Scott Randall, the district's senior finance officer.

The payment freeze was supposed to be lifted once auditors determined there was enough money at the end of that fiscal year to pay outstanding bills, said Manny Soto, the district's chief operating officer.

That day still hasn't come, The Oklahoman reported.

Exactly how much the district owes may be hard to determine. School auditors last month said the district's financial statements should be considered unreliable.

If the district comes up short when auditors reveal how much money the district had at the close of last fiscal year, suppliers could sue the district and obtain a court judgment.

Property taxes in the district would be raised to collect enough money to pay outstanding bills, The Oklahoman reported.

School officials said they hope that won't happen.

Hudson said he expects auditors to finish their work next month and that the district will be able to pay its overdue bills.

But there is some discrepancy between the district's records and what suppliers say they are owed, The Oklahoman reported.

Some suppliers said the school district's records understate the amounts owed, while others say the records overstate them.