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ST. LOUIS — St. Louis Public Schools leaders broke state law by awarding no-bid contracts and paid millions of dollars in staff bonuses in violation of the Missouri Constitution, according to a state audit released Tuesday.

Saying the district is on a "perilous financial path" from unchecked deficit spending, Missouri Auditor Scott Fitzpatrick gave SLPS the lowest possible rating of "poor" in the of the district's finances.

The district is on a path to bankruptcy by the school year 2030-2031, with no real plan to return to a balanced budget, Fitzpatrick concluded.

Fitzpatrick launched the audit last August after former Superintendent Keisha Scarlett was placed on leave for careless spending and hiring practices during her one-year tenure.

While acknowledging Scarlett's role in the crisis, Fitzpatrick blasted the seven-member school board at a news conference Tuesday.

"The school board was asleep at the wheel and allowed Dr. Scarlett to abuse the system in the first place," he said.

In what he called a recurring theme of the audit, Fitzpatrick said, "Time and time again, you’ll see that the board of education can and must do a much better job of providing leadership and oversight for the district."

The audit report reveals "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 in a statement. "The report also details how the district faces a rapidly deteriorating financial condition because of the failure of the (SLPS board) to plan appropriately for the long-term financial future of the district." 

Fitzpatrick stopped short of recommending a criminal investigation of the financial impropriety, saying the audit did not identify any theft of funds, just "gross incompetence."

The auditor's team confirmed previous reports that Scarlett awarded salaries and raises to her cabinet members beyond the maximum SLPS pay scale and without board approval. The largest payout went to current Superintendent Millicent Borishade, who was making $230,000 as Scarlett's deputy, $44,039 above the maximum. Borishade now makes $268,000, matching Scarlett's previous salary.

Several cabinet members under Scarlett did not complete state-required background checks or go through an interview process before they were hired, the audit states.

The district's dealings with vendors also violated SLPS policy and state laws governing contracts, according to the audit. A review of 20 vendors found the majority did not go through the required approval process, including three that improperly received emergency or single-source contracts totaling $266,780.

In a violation of the Missouri Constitution, which prohibits retroactive pay for government employees, SLPS paid about $3.5 million in attendance bonuses to employees, the audit found.

The audit also details "questionable and unreasonable" credit card purchases without an educational benefit, including $3,888 at Top Golf, $1,689 for four nights at Caesar's Palace in Las Vegas and $1,282 for eight nights in an Airbnb in Atlanta for Fatimata Sow, a senior project manager who previously worked with Scarlett at Seattle Public Schools.

Credit cards also were used for at least $1,747 in travel upgrades for SLPS administrators and board members in violation of district policy. 

The lax accounting continued after Scarlett's ouster, with late fees of $1,106 paid on credit card bills from last December and March.

Matt Davis, the former SLPS board vice president who completed his four-year term in April, said he took offense with Fitzpatrick's characterization of the district's financial issues.

"I think it was a bit overblown to say that the school board was asleep at the wheel or provided lax oversight," Davis said. "Once we figured out something was wrong, we took the unprecedented step of firing the superintendent for cause."

Davis said the district's finance department was more to blame for enabling Scarlett's spending.

"People are getting paid a lot of money, and I didn't get paid anything, and they need to do better," he said.

After the auditor's news conference, Superintendent Borishade said, "We're not happy, but the only place we can go is up."

Borishade said she was under the impression that all of the improper spending under Scarlett had been approved by the school board.

The district has implemented tighter internal controls on contracts, credit cards and hiring in the past year, Borishade wrote in an email to staff and families about the audit.

Borishade also referenced "a multi-year financial stabilization plan" for the district which has not been made public. However, a report released by SLPS last month suggests the district could save $182 million over the next five years by shutting down 37 out of 68 schools.ÌýÌý

"One of the things that we know we have to do is look at our spending, look at the efficiencies of our buildings and plan from there," Borishade told reporters. "It has to be tighter."

Part two of the state audit, a review of district operations, is expected by the end of the year.