Sacramento County Grand Jury 2010-2011

Conclusions 22

• CL1 Page 42
  1 There was no comprehensive assessment or worst case analysis of the financial risk the county could incur with the proposed contract during the Request for Proposal (RFP) process.
• CL2 Page 42
  1 There was no mechanism for recognizing the significance of exceptions to or from the specifications offered by bidders.
• CL3 Page 42
  1 There was no requirement that the bidders carry employee dishonesty and computer fraud insurance.
• CL4 Page 43
  1 The contract with Ingentra did not require any financial or performance audit.
• CL5 Page 43
  1 The contract renewal process was inadequate.
• CL6 Page 43
  1 The final Ingentra contract renewal was for a term longer than that authorized by the Sacramento County Board of Supervisors.
• CL7 Page 61
  0 Both CDPH and LAFCo are actively trying to help RLECWD solve its problems and properly serve the ratepayers.
• CL8 Page 61
  0 The District is clearly operating in a substandard manner that impedes success in attaining the stated mission of “…supplying water to existing and future customers in a cost effective manner while operating the District in a financially sound manner.”
• CL9 Page 86
  0 According to witness testimony to the grand jury, geographic and ethnic communities are not being adequately represented by board members who are elected at large by the entire district.
• CL10 Page 86
  0 Many sixth grade students transitioning to middle school have not been afforded the opportunity to select from the various middle school options, because the district office has limited the invitations to special programs.
• CL11 Page 42
  1 There was no evidence of criminal activity by Sacramento County employees or undue influence held by Ingentra over Sacramento County employees.
• CL12 Page 42
  1 The RFP process did not adequately check the backgrounds and reliability of bidders in special contracts, as defined in Recommendation 2.1, or when the bidder is a small corporation or business like Ingentra.
• CL13 Page 86
  0 Some community members from various ethnic groups do not believe they are respected by the Board of Trustees and the Twin Rivers Superintendent. These community members have stated that the needs and concerns they have repeatedly expressed continue to be disregarded.
• CL14 Page 63
  Has TRUSD lived up to the promises made for unification in Measure B?
• CL15 Page 63
  Have past conflicts clouded decisions made by the current administration and the board of trustees?
• CL16 Page 63
  Has TRUSD shown fiscal responsibility?
• CL17 Page 63
  Has TRUSD delivered the benefits anticipated in the passage of Measure B to the community and the children? Twin Rivers Unified School District: Lack of Trust + Lost Opportunities = Children’s Loss 51 Reason for Investigation Complaints from citizens triggered the investigation of Twin Rivers. Throughout the investigation, the grand jury learned of the disappointing outcomes of the unification process. There have been incidents of misplaced inventory and a stopped school building project previously approved by voters. There are lawsuits that cost more than they are worth, unfunded liability growth and spending that appears out of control. Animosity and dissension continue to plague the Twin Rivers school district. Method of Investigation
• CL18 Page 64
  Internet research was conducted. Background and Facts Measure B After seven failed attempts in the last 65 years to unify various school districts in the north area of Sacramento County, Measure B qualified to be on the ballot. Past unification attempts point to deep and longstanding community divisions, perceptions, experiences and historical events. Many comments and concerns have been expressed regarding racial issues in the community. The unification measure proposed in 2004, before Measure B was offered, was seen as dividing the community in half both racially and economically. It was not accepted by the California Department of Education and never became a ballot measure. Past unification attempts point to the problematic history of the Grant district and the continuing negativity towards Grant. There were two parts to Measure B. One part was to decide if four school districts would unify into one new pre K–12 district. The second part of Measure B was to elect one trustee for each of seven areas for a new board if Measure B passed. If Measure B was passed by the voters, the unification would be effective on July1, 2008. In the November 2007 election, Measure B passed with 60 percent of voter approval. Measure B created a new pre K–12 school district through the unification of four school districts. Three of the districts were elementary districts: the Del Paso Heights Elementary School District (grades K–6), the North Sacramento Elementary School District (grades K–7), and the Rio Linda Union School District (grades K–8). The fourth school district to be part of the unification was the Grant Joint Union High School District with grades 7–12. 52 Sacramento County Grand Jury 2010-2011 Two small elementary districts in the area, Elverta Joint Elementary School District (grades K–8) and Robla Elementary School District (grades K–6), voted to remain independent school districts and not to be included in the unification proposal. Measure B allowed for students from these two districts to send their students to secondary schools in the newly unified district. Registered voters in these two districts were eligible to vote on Measure B. Measure B stated the new district would be called North Area K–12. The new governing board was to determine its name and select the first superintendent. The Superintendent of the Sacramento County Office of Education (SCOE) was to serve as a temporary, interim superintendent. Boundaries would remain the same as the Grant district. Further, no students would be required to change schools. If the measure passed, employees from the four districts were to become employees of the new district. The Education Code has provisions for unification not to impact employee rights, job classifications, salaries or benefits of employees. Voters who lived in the Measure B area were encouraged to be informed and to vote in this election. Community leaders formed a committee to support the measure and held fund raising events to support their activities. Various civic organizations held forums to inform voters. Arguments in favor of Measure B included reducing bureaucracy, lowering administrative costs, and putting the savings into classrooms. Another argument in favor stated passage of the measure would create one streamlined administration, one district superintendent and one school board with seven elected members. Students were to benefit from the measure by having a coordinated pre K–12 curriculum along with educational programs to better prepare them for college and careers. There were also arguments opposing Measure B, but no organized opposition committee. One argument against the measure was the risk of creating a very large school district of approximately 30,000 students. A second argument against the measure was concern the creation of one massive bureaucracy would take away local control from communities. Another argument claimed Measure B was not the reform sought for the public schools in this area. Despite the promise to spend less money on administration, more than two years after the formation of Twin Rivers, the number of high level administrators, directors and supervisors employed by Twin Rivers is considerably higher than the number of similar positions in other large school districts in Sacramento County. The Twin Rivers organization plan, developed by a consultant, is to substantially reduce the number of administrative positions. This plan will take several years to implement and each change will be disruptive to staff and programs. In March 2008, after unification Measure B was passed by voters, the Grant board offered severance packages to ten administrators in return for early termination of their contracts. This was presented as a way to avoid the perception of redundant administrative staff at the central office level. The severance packages included 18 to 24 months of the administrators’ salaries. The superintendent of SCOE refused to accept this action. A lawsuit between SCOE and the Grant board resulted. A Sacramento Twin Rivers Unified School District: Lack of Trust + Lost Opportunities = Children’s Loss 53 County Superior Court judge’s ruling in favor of Grant’s action was overturned by a state court of appeals ruling. It is unclear whether this decision will be appealed to the California Supreme Court. However, several of the former Grant administrators involved have filed additional lawsuits to get their job rights reinstated. Vigorous concerns remain about the hiring process and practices used by Twin Rivers to hire administrators. Administrators were hired, both formally and informally, ahead of application deadlines and without job postings. These actions eliminated many Grant applicants. Several Grant administrators stated they were “not taken seriously” and personnel decisions were spiteful towards Grant employees, fueling an ongoing feud. The senior Grant district administrators who stayed on at Twin Rivers after unification under Education Code provisions, found it difficult to work in an atmosphere of being “forced out.” Jobs assigned to these experienced administrators required skills far below their professional capabilities. These jobs included filing papers in a remote office and installing playground equipment. According to the Twin Rivers organization chart dated August 19, 2008, seven of the top 12 administrators were from the Rio Linda district. The Education Code, such as sections 35555 and 55556(a), provides that unification will not affect the rights of both certificated and classified employees. Considerable time and effort have been spent to prepare accurate seniority lists. After two years, the accuracy of these lists continues to be challenged by employees and some employees continue to “float” on temporary assignments until their seniority status is determined. Meanwhile, the district has had difficulties merging equipment inventories from the computer systems of the four merged school districts. After being in operation for over two years and having experienced administrative help available, the district has not yet taken a complete physical inventory of all of its equipment. A physical inventory is scheduled for the summer of 2011. As adjustments are made to reduce the number of administrators, and reassignments are made, concerns are ongoing regarding the perceived favoritism toward former Rio Linda administrators. According to testimony to the grand jury, there is a perception of racial bias affecting African American staff. Their reassignments, changes in job duties, and demotions are often viewed as “punitive” and racially motivated. Furthermore, some witnesses believe that African Americans are best equipped to “close the achievement gap” of their children. The unification proposal included a provision that all the property, obligations, and bond indebtedness of the four existing districts would become part of the new unified school district. According to Measure B voter information, the reorganization would not raise local taxes. After the passage of Measure B, all of the taxpayers in the district received notices from the County of Sacramento that property taxes and bond repayments would be levied on all taxpayers for the bond debts from the two elementary school districts. The residents of the Del Paso District had not passed any general obligation bonds, yet were taxed for bonds from the North Sacramento and Rio Linda districts. These residents had property tax bills increase for the bonds approved by other school districts. A Del Paso Heights resident testified to the grand jury that his taxes increased $80 per year. 54 Sacramento County Grand Jury 2010-2011 As the issue was not resolved locally, both Sacramento County and Twin Rivers presented briefs to the Attorney General asking for an opinion on this matter. In late December 2010, the Attorney General’s office issued an opinion concluding that under the Education Code, Sacramento County had the right to levy taxes on all taxpayers in the newly formed district and the state constitution allowed such levies. Whether or not the statements in the voter pamphlets distributed during the campaign which stated, “… the new district reorganization will not raise local taxes…” misinformed the voters of the “…ramifications of the creation of the district…,” it is up to the aggrieved voters to decide whether they want to pursue other avenues of relief. The Attorney General stated that it is beyond the scope of his opinion in this case. (A complete copy of this decision can be found at ag.ca.gov/opinions search opinions 09-305.) Measure B proposed the new school district would be comprised of 54 campuses that would cover 120 square miles and would be governed by a seven member board. Members would be elected at the same time as the unification vote. The proposed district was divided by officials from SCOE into seven areas to provide representation for every part of the district. One board member who resided in an area would be elected as its representative. The candidates were voted on by registered voters of the entire proposed school district. The initial term of the trustees for the proposed school district was stated in Measure B. The initial term was to be four years, unless the governing board consolidated the election of board members with the statewide general election. If this were to happen, the term of the board members would be three years. Board members elected at this next board election were to have two-year terms if they represented even- numbered district areas or four-year terms if they represented odd-numbered district areas. As the election was held in November 2007, it was assumed the initial term for all seven board members would end in November 2011 unless the board voted to consolidate with the next statewide election in November 2010. A document with election options was presented to the Twin River Board of Trustees at the March 11, 2010, board meeting. This document was prepared by administrators, the attorney for Twin Rivers, and another legal firm. There were legal, financial and operational implications presented with each choice. Under the Education Code, there were three dates available for the next election. Costs for the election varied from $70,000 to $450,000 among those dates, as did the length of time the new board members would serve. By a 5-2 vote, the board voted to hold the next election in November 2012, the most remote date available. This decision meant that board members would serve for four years and four months rather than the four years specified in Measure B. It also reflected the board’s position that it had no operational authority until July 1, 2008, and that the previous four districts had full authority until that time. Yet the new board members were sworn into office in December 2007, met regularly up to July 1, 2008, and made many important decisions including hiring a new superintendent. Counting this time period meant the board would essentially serve for almost five years. Witnesses expressed their concerns that the decision to lengthen the time board members would serve was really no different from school board practices of the past which were often viewed as self-serving. Another concern was that each area in the district did not have Twin Rivers Unified School District: Lack of Trust + Lost Opportunities = Children’s Loss 55 true representation, in that each board member was elected by all district residents, not just the residents of the area to be represented. The Twin Rivers Board of Trustees, the high level administrators and the community are struggling to identify, refine and implement a multitude of unification visions, expectations, and decisions. A major impediment is lack of trust. There is great confusion in perceptions regarding the district’s responsibility to provide equity (meaning meeting individual needs) compared to providing equality (meaning providing the same for everyone). Community members complain the needs of the groups they represent are not being heard, concerns are not sufficiently addressed, and board decisions are not focused on the needs of children and their families. Measure B promised more resources to be spent in the classrooms. Students were to have a single, articulated curriculum from preschool through 12th grade. After more than two years, the promised curriculum has not been provided. No Twin Rivers school board member has experience in K–12 district leadership. Two members were elected to the Twin Rivers’ board without any school board experience. Three board members were board members in elementary districts. Two board members, with many years of experience as board members in other elementary districts, are reported to dominate the Twin Rivers' board meetings and decisions. Testimony to the grand jury consistently shared strong perceptions that the two board members, with many years of experience, are “running the show” along with the attorney for the district. The other board members were described to the grand jury as “generally nice people” who are “followers” and have “no backbone.” Ongoing dissention and negativity between members of the Twin Rivers board have been clearly documented. Witnesses testified to the grand jury that both open and closed sessions of the board are sometimes contentious. Board orientation and training sessions have been held. In addition, workshops were given to board members at no charge by a professional association. The purpose of these workshops was to develop a vision-led and cohesive community-spirited board, yet the dissention and negativity continue. Remarks and feelings of victimization by one board member interfere with the role and responsibilities of the school board. These actions occur frequently at board meetings in front of staff and the public. Board meetings are opened with a statement of expected protocol. In January 2011, after more than three years as a governing body, the board began a meeting with a presentation on the history of Robert’s Rules of Order. This 20 minute presentation, given by a board member, included the benefits of adhering to the rules and the process used to make and adopt motions. Within minutes of this presentation another incident of dissention and negativity occurred. More training on Robert’s Rules of Order is planned. Members of the grand jury attended a Twin Rivers School Board meeting January 11,
• CL19 Page 70
  This contemplated action has caused additional concern for the former Grant teachers who have single subject credentials. Adding to their stress is the uncertainty of our state budget and issuance of yearly pink slips. 58 Sacramento County Grand Jury 2010-2011 East Natomas Education Complex Anticipating student population growth within its district, Grant Joint Union High School District undertook an ambitious plan to develop a new, combined junior high and senior high school campus, later named East Natomas Education Complex. To support this new campus and renovation of existing facilities, voters approved Measure G in June 2006. In January 2007, Grant entered into a contract to design and build ENEC. Circumstances changed. The Federal Emergency Management Agency (FEMA) re- designated the flood risk status of the Natomas basin, resulting in a building moratorium. The economy began to enter the current recession. The expected growth in student population did not occur. As a result of the passage of Measure B in November 2007, Grant was combined with three elementary school districts to form the Twin Rivers Unified School District. Following unification of the new district July 1, 2008, Twin Rivers decided to slow construction and eventually shut down the ENEC project. Grant, assisted and advised by California Financial Services (CFS), believed that its school district area would continue to develop and grow. Grant determined that a new, state of the art, combined junior high and senior high school would be needed. The district decided to construct the new school complex on property just outside the city limits of Sacramento and name it the East Natomas Educational Complex. This would be the first new high school to be built in that district in 50 years. In mid-June 2004, Grant entered into two contracts for the purchase of approximately 69 acres of property in the Natomas basin for the ENEC project, for approximately $13M. In September 2006, Grant approved purchase of an adjacent 7.5 acre parcel for the project, costing approximately $3M. On June 6, 2006, district voters approved Measure G in the amount of $230M of general obligation bonds to fund certain priority school modernization, improvement, expansion and new construction projects. Grant established a Measure G oversight committee (OC) and $159M was earmarked for the construction of the new school complex. In spite of having approval from county and state oversight agencies, having assurances for state construction funding, having a new phased building approach, having special legislation passed for limited site occupancy, and having a partially completed site, the Twin Rivers School Board decided to stop construction of ENEC. This decision appears to have had little public input or awareness. Testimony to the grand jury demonstrated many people have alternative ideas for the site, such as a medical center, community college campus or business office. The most common idea expressed was to use the site for the district office. Grant anticipated that state matching funds were available to complete these projects. Based on assurances the required funding was available, Grant moved forward with construction plans and entered into a design/build contract with McCarthy Construction in January 2007 to build the new school complex. Site preparation was begun in December 2007. The project proceeded despite FEMA’s planned re-designation of the flood risk status in the Natomas basin (this information was published in the Sacramento Bee, January 2007) and the passage of Measure B. The FEMA decision resulted in a Twin Rivers Unified School District: Lack of Trust + Lost Opportunities = Children’s Loss 59 building moratorium which altered the expected growth and student population numbers in the area. In November 2007, voters approved Measure B which established a new school district effective July 1, 2008, composed of three elementary school districts, Del Paso Heights, North Sacramento and Rio Linda, and Grant High School district. Grant school district proceeded with the ENEC construction as the project had already been started and signed contracts were in place. Former Grant administrators testified that extensive briefings had been given to Twin Rivers, including the interim superintendent, regarding the ENEC construction project. After TRUSD was officially established July 1, 2008, the contract with McCarthy Construction was amended to allow implementation of a phased approach to the ENEC construction project. The district superintendent sought special legislation. California Assembly member Roger Niello introduced AB 916 which was passed in September
• CL20 Page 97
  Did the program manager named in the complaint forge signatures on vouchers as alleged by the complainant?
• CL21 Page 97
  Did other CPS employees do the same thing?
• CL22 Page 97
  Were CPS procedures at fault? Background and Facts The manager was hired by the Department of Health and Human Services in 1994 and was evaluated on a regular basis. As a result of competent performance the manager was promoted several times and at the time of termination was a Human Services Program Manager with CPS. On February 17, 2010, an account clerk sent an email to a social worker regarding the use of a voucher for a $250 purchase. The clerk questioned the purchase because the Form CS 1010 (CPS Purchase Receipt) was not included with the payment request as required. The social worker responded that there was no purchase because the client’s case was closed a month earlier. The email was then forwarded, with a copy to this manager who responded that the issue had been resolved. An investigation of other purchase orders revealed that the manager was forging the workers’ signatures. The first recorded Sometimes the System Works 85 instance occurred January 7, 2010. The actions of the alert account clerk who spotted the discrepancy can be credited with revealing the fraud. On March 5, 2010, the manager was interviewed by two human resources managers. At that time the manager was advised that an investigation was being conducted for violation of policies and procedures in the acquisition of purchase orders and the purchase of merchandise. The manager was then placed on paid administrative leave. On completion of the investigation, the manager was confronted with the evidence. The total amount of the alleged embezzlement was $2,017. A recommendation of dismissal was issued on June 24, 2010 and termination occurred August 5, 2010. During testimony to the grand jury, the program manager admitted guilt and expressed regret. This individual said that when clients called and pressed for help, he pulled their cases from the closed file and issued vouchers. Their cases had been closed but due to backlogs the closure had not yet been entered into the computer system. The manager confirmed forging the authorizing signatures, but asserted that none of the purchases were for his personal use. The manager testified to being unaware of other instances of violation of the voucher procedure. The witness does not know if CPS has changed procedures to prevent this kind of fraud. As of April 2011, criminal charges had not been filed. It appears that CPS has a process in place to reconcile accounts. This is the reason the discrepancy caught the eye of the account clerk. However, questions remained: Was this an isolated instance or does CPS have other such cases? What actions had CPS taken to ensure this doesn’t happen again? Were criminal charges filed against the manager? The grand jury interviewed the CPS Deputy Director in an effort to answer these questions and subsequently received the following written response that confirms the information discovered in the grand jury’s investigation. “The CPS managers and administrative staff reviewed the current procedures in place to oversee CPS Purchasing. It was determined that the current controls in place did a good job of uncovering irregularities in process. The Administrative Unit has one team, a supervisor and an assistant, charged with the review and approval of all purchase order requests. They both review each request prior to approval. In the (name redacted) Program Manager’s case they noted the behavior pattern and missing signature, which led to the discovery of the fraud.” The director also stated: “We have expanded the requirement for the recipient signature to other types of purchases to ensure we have an accurate accounting of the distribution of goods and items. In addition to requiring a signature from the recipient, we have added the review and signature of the program manager. We will expand this oversight to include donated holiday gifts for foster children in November/December 2011.” 86 Sacramento County Grand Jury 2010-2011 Findings and Recommendations Finding 1.0 The program manager did forge signatures on voucher purchases but there was no evidence of other Child Protective Services employees doing the same thing.

Agency Responses 1

Government agencies' official responses to this report's findings and recommendations. Click on a response to see the structured breakdown.

No Responses Found 3

Government entities assigned to respond to this report. No response documents have been linked in our database.