COLUMBIA — S.C. First Steps uses questionable statistics to show that it helps children succeed in school, overfunded and underfunded various county partnerships and has poor participation by its governing board, according to a state audit released Tuesday.
The Legislative Audit Council report, done at lawmakers request, points to areas that need improvement at First Steps, which distributes public money and grants to early childhood-development groups in 46 counties. The nonprofit, which spent $41 million in the 2011-12 budget year, already is working on the areas cited, its leaders responded.
An example of an error already corrected is an accounting mistake that led to overpayments of as much as $21,626 to 32 partnerships and underpayments of as much as $54,245 to 14 other groups in the 2012-13 budget year, said S.C. First Steps director Susan DeVenney.
In the 2011-12 budget year, 21 county First Steps partnerships also spent more on overhead than is permissible, exceeding the 8 percent limit of expenses set. But the report and DeVenney said the state does not define overhead costs adequately.
The report also criticized First Steps for claiming success in preparing children for school based on trends that it is not responsible for. At the same time, however, the report said state law makes it difficult to measure whether efforts aimed at preparing children for school including those by First Steps are working.
The Audit Council called for changes in state law to define school readiness and to allow the state Department of Education to administer a statewide test to determine whether children are ready for school.
DeVenney agreed that a statewide measure of school readiness, which the state eliminated in 2008, would be a better way to determine the impact of First Steps early childhood programs on children entering school.
Lawmakers have been waiting for the audit before taking up legislation that would reauthorize First Steps.
At first glance, nothing in the report would jeopardize that reauthorization, said state Sen. Wes Hayes, R-Rock Hill, chairman of a Senate K-12 education finance subcommittee.
But governance issues cited by the report for example, First Steps board has unfilled vacancies and some board members continue to serve, even when their terms have expired jump out as problems that can and should be corrected, Hayes said.
Five of the boards 22 seats are vacant, and eight board members terms have expired.
State Rep. Phil Owens, R-Pickens, chairman of the House Education Committee, said a lot of the findings were disturbing, noting specifically the Audit Councils finding the First Steps board sometimes made decisions without a quorum the majority needed to take votes present.
This is not the way to do business, said Owens, promising, This would be the beginning of the review not the end.
The report stated that First Steps board meetings were poorly attended from 2009 to 2012. DeVenney defended the board, saying the full executive committee or a majority of it always was present at meetings.
First Steps bylaws authorize the executive committee to act for the board in some instances. The audit report also noted that First Steps operations would have been severely limited if the board had not acted on some issues without a quorum.
But some First Steps board members seldom attend. State law makes the governor and state superintendent of education members of the board, but neither has attended meetings in four years, the audit found. Lawmakers should consider allowing the two to appoint representatives to attend for them, DeVenney said.
Some of the board-related concerns are unacceptable, said Rick Noble, director of the Richland County First Steps county partnership. That board has got to have ownership and it has got to have oversight.
The audit said First Steps should not point to a 48 percent drop in the number of first-graders having to repeat a grade as evidence that its programs work. That drop has saved the state $21 million a year, First Steps says.
But in making that claim, First Steps did not compare retention rates for children who have had access to early childhood programs, including its programs, to those who have not, the audit found.
First Steps used that data because no better measurements exist, DeVenney said, pointing to the need for a statewide readiness assessment.
Noble, the Richland County First Steps director, defended First Steps for using the retention data as an indicator of how the states focus on early childhood programs is helping prepare children for success in school.
One thing you could intuitively think is, if kids are ready for school, then theyll be less likely to be retained in first, second and third grades, Noble said. Looking at the data, it is clear that something happened. Id like to think First Steps contributed to that.