ST. LOUIS – Missouri State Auditor Scott Fitzpatrick relayed his department’s report with a measured tone, but the information he shared screams trouble for Saint Louis Public Schools. The first of two audits gives the SLPS a “poor” rating and criticizes the district’s deficit spending, including unjustified salary increases and credit card misuse.

Fitzpatrick initiated the inquiry last August in response to financial discrepancies under former SLPS Superintendent Dr. Keisha Scarlett, who was fired last fall. And while Scarlett was responsible for many of the issues discovered in the audit, Fitzpatrick said the school board was "asleep at the wheel" for allowing her to abuse the system.

“The common thread here is a lack of leadership. The superintendent of a school is a very important job. But the board is in charge of the district and the board hires the superintendent,” Fitzpatrick said.

Former Superintendent Scarlett has denied any wrongdoing.

The audit found the SLPS is spending more money than it's bringing in. In fiscal year 2024, the district recorded $483.5 million in expenditures to $465.8 million in revenue, resulting in a projected deficit of $17.7 million. The district has projected budget deficits of $35.4 million and $33.4 million for fiscal years 2025 and 2026, respectively.

If not addressed by 2030, the district could be classified by the Department of Elementary and Secondary Education as “financially stressed.” And if nothing changes by 2031, SLPS may not even have enough money to finish out the school year.

"Our report identifies a great deal of mismanagement in terms of the unreasonable purchases that were allowed, how salaries were increased without justification, how millions of dollars in unconstitutional incentives were paid out, and how vendors were selected in violation of district policy and state law,” Fitzpatrick said. “The report also details how the district faces a rapidly deteriorating financial condition because of the failure of the Board to plan appropriately for the long-term financial future of the district.”

Millions were spent on outside consultants, some linked to Scarlett’s previous prior job at Seattle Public Schools, and questionable credit card charges were made for travel, food, and entertainment without board approval.

Auditors found SLPS paid out $3.5 million in bonuses that violated the Missouri Constitution, including payments without proper agreements or extra duties. Scarlett also approved large salary increases for top staff without board approval, some exceeding pay limits of more than $40,000. And in a review of 30 random employee files, the audit found most were being paid more than allowed, and some records were missing key documents like background checks.

“These were decisions made by Dr. Scarlett, but it can’t be overlooked that the board stood idly by and failed to live up to its responsibilities to provide oversight to ensure these salary adjustments were reasonable and necessary,” Fitzpatrick said.

The report detailed how district personnel spent more than $12,000 on what the auditor called “questionable and unreasonable” purchases with no educational benefit. Nearly $4,000 at a Top Golf, nearly $1,700 on a four-night stay at Caesar's Palace in Las Vegas, and more than $1,200 bucks for an Airbnb rental paid for using the former superintendent's district-issued credit card.

“Some of those purchases don’t pass the commonsense test and should never have happened,” the auditor said. “But the school board’s decision to allow credit cards to be handed out to employees like candy without any kind of guidance on their acceptable use is inexcusable.”

Ahead of the audit's release, new SLPS Superintendent Millicent Borishade said the audit will help the district "turn the page" and get better in the long run.

“We are always open for accountability and this audit is just going to continue to help us do better, help us turn the page and continue to communicate with transparency and accountability," Borishade said.

Fitzpatrick expects the second part of the audit will be completed by the end of the year and released early next year.

“There’s still time to avert that [financial] disaster, but as our report also identifies, the kind of planning that needs to take place to ensure the long-term financial future of the district simply has not happened,” Fitzpatrick said.

Watch Auditor Scot Fitzpatrick's news conference discussing the results of the audit.

Read the first part of the audit in its entirety.