Gross financial mismanagement that may require intervention from the Legislature to overcome and lack of understanding of the Arizona School Improvement Plan have been identified in a 120-page report on the struggling Union Elementary School District.
The report, released last week by receiver Peter Davis, categorizes financial and educational problems in the district as serious.

"Many instances of gross financial mismanagement have been identified in the course of the receiver's investigation," the report states.

The district spent more than $4.3 million that it did not have, according to the report. From 2004, the district overspent on special-education transportation and landscaping. It bought $11,000 copiers and new cars. At the same time, the district was spending far below the state average in classroom funding.

A maintenance and operations budget overage of $2.2 million is due the Department of Education. A repayment of $2.1 million that was overspent is past due to the School Facilities Board Fund 695 -- notably $1.8 million for Dos Rios Elementary construction.

District officials failed to meet state guidelines for special education, English Language Learner programs and state lesson plan standards and performance objectives, according to the receiver.

Union Elementary School has been classified as "underperforming" since 2004, failing to make even minimal Average Yearly Progress for the past two years. Teachers had "no knowledge of what the Arizona School Improvement Plan was or what it required the school to do," the report said.

Hurley Ranch Elementary declined to "underperforming" status in 2007.

The school improvement plan is being initiated at both Union and Hurley Ranch.

Davis suggests seven possible courses to fix the "gross financial and education mismanagement" of Union:

* Pay back the debt in five amounts of $440,000 over five years, which would further decrease the amount being spent in the classroom.

* Merge Union with another elementary-school district.

* Close Union Middle School, which is on the Union Elementary campus, and transfer those students to another district.

* Maintain the status quo.

* Close all schools and operate busses to transport students to another district.

* Close the district and sell the property.

* Place the district in bankruptcy proceedings, which has never been done in Arizona.