The auditor general's "special review" could lead to a major investigation of the finances of the school district controlled by members of the Fundamentalist Church of Jesus Christ of Latter-day Saints. Polygamy is a tenet of the FLDS, which split more than 70 years ago from the Salt Lake City-based Mormon Church.
The Auditor General's Office did not return a phone call seeking comment on the investigation, which began after New Times provided auditor general's investigators access to thousands of pages of school district financial records obtained under the state public records law.
The school district discussed the investigation at its June 24 board meeting, according to the meeting agenda. Colorado City officials did not return a phone call seeking comment.
The auditor general's investigation could widen to also include the state Department of Education, which will soon determine whether to launch a separate inquiry into the district's prolific travel expenses, including the purchase of a $220,000 aircraft and the use of district credit cards for personal expenses ("The Wages of Sin," April 10).
"We are having internal discussions on how to proceed on allegations of misuse of funds," says Amy Rezzonico, a spokeswoman for the education department.
State Superintendent of Public Instruction Tom Horne met Monday, July 7, with Mohave County Superintendent of Schools Mike File in Kingman and discussed operations at the Colorado City school district.
File says he told Horne that based on information obtained by New Times, he believes the Colorado City school district is improperly spending state funds.
"I'm in charge in overseeing that their funds are expended properly and they are not doing that," File says he told Horne, who also couldn't be reached for comment before press time for this article.
The increasing scrutiny on the school district finances comes at the same time legal pressure is mounting on the polygamist community where scores of underage girls have been coerced into "spiritual marriages" with older men who already have multiple "wives" ("Bound by Fear," March 13).
Utah prosecutors are preparing to try Colorado City police officer Rodney Holm on charges of sexual misconduct with a minor stemming from his cohabitation with his third wife, Ruth Stubbs, who bore him two children before turning 18. If prosecutors win a conviction, it could clear the way for additional arrests of high-ranking FLDS leaders, including the current prophet, Warren Jeffs.
Utah birth certificates obtained by New Times reveal that Jeffs is the father of children from at least two mothers who appear to have been impregnated prior to their 18th birthdays ("Fornicating for God," March 20; and "Polygamists Probed," May 1).
The auditor general's investigation could provide state law enforcement officials with an insider look at the complicated and secret finances of the closed society controlled by FLDS leaders. The investigation comes 50 years after former governor Howard Pyle ordered state police to raid the community, then known as Short Creek, and remove more than 220 women and children from polygamous homes.
The raid failed to end polygamy, and Pyle lost in his reelection bid. Since then, political leaders have left the FLDS alone, despite the fact that polygamy violates Arizona's constitution.
The Colorado City school district's $5 million-a-year budget is crucial economically in the community of about 7,000 people along the remote Arizona Strip towns of Colorado City and Hildale, Utah. The school district has more than 100 employees for 300 students, a 3-to-1 student to employee ratio far out of line with Mohave County's average of 25 students per employee.
The school district made international news in July 2000 when the FLDS' religious leader demanded that parents pull their children from the public schools. More than 800 kids were withdrawn, yet the number of employees at the school district remained inordinately high.
File says there is little the county can do to force the district to reduce its payroll. The school district's hiring practices are controlled by the school board, whose members all belong to the FLDS.
The Colorado City school district is also benefiting from a provision in state law designed to protect school districts in the event of a sudden decline in enrollment, typically caused by the closure of a major employer. Colorado City has received more than $3 million since July 2000 in state funds for phantom students who were withdrawn from the school by religious decree.
The state Legislature deleted $5 million for rapid-decline subsidies for school districts statewide for the upcoming school year, of which $1.7 million was earmarked for Colorado City. Governor Janet Napolitano, however, used a line item veto to restore the rapid-decline funds.
Napolitano, who as attorney general initiated an investigation into Colorado City that found substantial evidence of underage girls being coerced into polygamy, did not return calls from New Times seeking comment.
The school district has long played a central role in the allocation of resources and jobs in the community. School board president F. Lee Bistline has been a board member since the early 1960s. Superintendent Alvin Barlow is the state's longest tenured school superintendent dating back to the 1970s.
The school district has been in financial trouble for years. The low tax base on the Arizona Strip, which is mostly state and federal land, has made it difficult for the district to raise funds.
The district is now taking the unusual step of seeking a line of credit with Wells Fargo Bank, which also has issued district credit cards to key employees and board members. Several of those employees, including Superintendent Barlow, have used the district credit card for personal expenses -- a violation of state law.
Barlow has unpaid personal expenses totaling more than $5,000 dating back to at least July 2001, district records show.
The school district has also been improperly paying interest on private credit purchases as well as failing to pay off the balance on authorized purchases each month as required by state law.
District employees travel extensively, even as the district teeters on the brink of financial ruin. Junior high and elementary school principal Kimball Barlow, for example, spent three nights at the Westgate Hotel in San Diego at $299 a night in February for something called the "accountability academy" meeting.
The district has also spent more than $20,000 since January on expenses related to operating a Cessna 210 aircraft that it bought last winter on a three-year lease-purchase deal, district records show. The $20,000 in expenses do not include lease payments on the aircraft, but do include pay for the pilot, who is the son of school board chairman Bistline.
Not only does the school district have serious financial questions it must address, there is a growing resentment by many students and teachers to the administration's handling of the school. The dissension is rooted in religious discrimination. The FLDS controls the school board and the administration, but most students and teachers come from a rival fundamentalist Mormon polygamous sect.
The latter group is based in the unincorporated community of Centennial Park called the Second Ward. While both factions believe in polygamy, the groups generally despise each other. Since the FLDS has many more members, it has managed to control the school board, even though board members have withdrawn their children from the public schools.
Some students believe their education has been purposely undermined by FLDS-dominated school board and administrators because the FLDS prophet considers members of the Second Ward wicked and has ordered FLDS members to refrain from contact with them.
Colorado City High School students presented a signed petition to the school board and administrators during graduation ceremonies in May demanding that officials resign. The petition, which was signed by 19 students, stated:
"We do not believe your actions are made in the best interests of the students. Otherwise, you would not have withdrawn your own children from school. It is our belief that you are doing what is best for your church while neglecting your duties as our administration and board."
That there have been no subsequent resignations is not surprising.
The FLDS is a tightly controlled theocracy that exerts enormous power over the private, economic and social lives of its members. The FLDS owns nearly all the land in Colorado City. Church members build homes on the land, but are considered tenants-at-will and can be evicted for any reason. FLDS leaders assign young girls, frequently under 18, to enter into "plural" marriages where the girl has no legal right to the community property.