Tucson Unified School District appears to have finally corrected long-standing deficiencies, including insufficient instructional hours, improperly classifying English-language learners, questionable use of federal funds and not following exceptional education requirements, state and federal auditors have found.

The district, which has been plagued by compliance issues for the past five years, is even being hailed as a model for new business practices.

Beyond assuring that taxpayers, parents and students are getting full value from their educational investment, the lifting of 10 special audits conducted over the past several years has the potential to save the district about $2.6 million in threatened penalties, $90,000 in annual auditor fees and the loss of $34 million in state and federal funding.

But there is more to the elimination of the audits than money, said TUSD Chief Financial Officer Yousef Awwad.

"There is a direct relationship between these funds and academic achievement because there was the potential to lose money that provides resources in the classroom and student support functions," Awwad said.

There is also the matter of performing functions the way they should be done and giving the community the school district it deserves, he said.

"The challenges were large and there were many, but we set the bar high and started expecting more of our folks," Awwad said of implementing new business processes. "We held our employees more accountable, preached ownership as a value they should have, and they rose to the occasion."

Training at all levels on how things work and how they affect the organization as a whole was conducted both by internal and external parties.

Perhaps the most costly audit was a years-long investigation by the state attorney general into the district's procurement practices after evidence was found of bid-rigging and conflicts of interest in the purchasing of technology systems and equipment.

What followed was the ouster of key employees and an agreement requiring TUSD to be continuously audited over the years.

The attorney general hired auditors who were to be paid for by TUSD - $90,000 annually.

The investigation also resulted in a freeze on federal funds for technology, which were recently restored as a result of the progress that has been made.

Loopholes were closed, and staff learned about gifts, donations and conflicts of interest; and purchasing guidelines and procedures.

The work has been enough to have the audit lifted and to garner praise from the attorney general.

"They've told us that the process we've put in place is a great model for other districts to follow, and they will encourage other districts to come and talk to us," Awwad said. "It's a complete turnaround from where we were years ago."

Another area in which the district stood to lose significantly was Title I federal funds used for low-income children.

School districts are required to prove that the funds are being used appropriately by logging who is doing the work and the type of work being done.

"We were not doing a good job with that particular process, and we were at risk of losing $24 million if we could not prove that money was being used appropriately," Awwad said. Systems in place now ensure the proper forms are being completed and reviewed by the appropriate person.

The problem of noncompliance is not only the fault of employees, but also of supervisors who were not following up to ensure that business was being done as it should be, so training was also directed at that level, Awwad said.

Awwad noted that all of the audits that have been lifted were inherited by TUSD Superintendent John Pedicone's administration.

"What we inherited was monumental - there is only so much you can fix in a short period of time," Awwad said. "But this speaks volumes to Dr. Pedicone's leadership and the staff we have."

Pedicone announced his resignation last week effective at the end of June.

The lifting of the audits is much like the lifting of a black cloud, Awwad said. In awarding money, the Arizona Department of Education looks at all outstanding audits.

"Oftentimes, they'll say, you didn't clear the problem: We're not going to give you anymore funding until we know you are managing what you have," Awwad said. "Now that we don't have these issues, we should be all right."

Despite the elimination of the audits, TUSD will continue to monitor the areas of previous concern to ensure the issues are resolved.

Contact reporter Alexis Huicochea at ahuicochea@azstarnet.com or 573-4175. On Twitter @AlexisHuicochea