Orange County Grand Jury • 2014-2015 • Agency Response
Response to: Newport-Mesa Unified School District

Response to the 2014-15 Orange County Grand Jury report –*

Published: September 23, 2015 6 pages
Ver PDF original

Note: Missing finding numbers detected: F2, F3

Findings and Recommendations 4 findings

F1
activity, revenue, expenditure, assets, or liabilities. The Grand Jury determined that these Joint Powers Authorities serve no benefit to the public or the taxpayers and have the potential for misuse or obfuscation of public funds. Response: The Authority agrees with the Finding 1. Copies of emails from the State of California confirming the "inactive" status of The Newport-Mesa Unified School District Public Financing Authority have been included. Explanation of "inactive" status was given at a public meeting of the Board of Education on July 14, 2105.
Related Recommendations (1)
R1
the official paperwork with the State of California requesting termination of their existence or provide at the next public meeting the justification for continuing the Joint Powers Authority. (F.1.) Response: The recommendation has been implemented. Copies of emails from the State of California confirming the "inactive" status of The Newport-Mesa Unified School District Public Financing Authority have been included. Explanation of "inactive" status was given at a public meeting of the Board of Education on July 14, 2105.
F4
Vertical Joint Powers Authorities with a single controlling entity, such as a city council, have the potential to use this organizational structure as a shell company to avoid other legal constraints on the controlling entity and to obfuscate taxpayer visibility. Response: The Newport-Mesa Unified School District Public Financing Authority agrees with the Findings 4; it is a Vertical Joint Powers Authority. Newport-Mesa Unified School District Public Financing Authority did request on March 9, 2015 and receive "inactive" status with the State Controller's Office.
Related Recommendations (1)
R4
The 32 Joint Powers Authorities that are not complying with the California State Law requiring annual reporting should become compliant by submitting their 2014 report by December 31, 2015, and submitting the required reports annually thereafter. (F.6.) Response: This recommendation has been implemented. Please contact the undersigned at (714) 424-5002 with any questions. Respectfully submitted, Paul H. Reed Deputy Superintendent and Chief Business Official Patty Dreher [email protected] From: Friday, March 06, 2015 10:50 AM Sent: Patty Dreher To: [email protected]; [email protected] Cc: RE: Newport-Mesa Unified School District Public Financing Authority Subject: Newport-Mesa Unified School District Public Financing Authority's ID # is 12503004800. From: Patty Dreher [mailto:[email protected]] Sent: Friday, March 06, 2015 10:04 AM To: Tsushima, Susan Cc: Bychkov, Tatyana; Gill, Jaswant Subject: RE: Newport-Mesa Unified School District Public Financing Authority Hi Susan, Thank you for responding to my questions this morning and per our conversation the Newport-Mesa Unified School District Public Financing Authority will send you an email and the signed Cover Page and a General Information page to satisfy the reporting requirements for the State. Paul Reed, Deputy Superintendent and CBO is out of the office today but I will forward report information on Monday. Would it be possible to verify that the ID Number you have for the above mentioned entity is 95-2417783? Thank you. Patty Dreher Executive Assistant/Confidential, Business Services Newport-Mesa Unified School District 2985 Bear Street Costa Mesa, CA 92626 714 424-5002 From: [email protected] [mailto:[email protected]] Sent: Friday, March 06, 2015 9:32 AM To: Patty Dreher Cc: [email protected]; [email protected] Subject: Newport-Mesa Unified School District Public Financing Authority HI Patty, Per our conversation earlier, it appears Newport-Mesa Unified School District Public Financing Authority (NMUSCPFA) is "inactive." If so, please e-mail us a signed and dated "Cover Page" and a "General Information" page to satisfy your requirement (Please see link below). http://www.sco.ca.gov/Files-ARD-Local/LocRep/Reporting Forms - Special Districts.pdf In addition, please e-mail all of us a brief explanation explaining why NMUSCPFA does not financial activity. Patty Dreher Patty Dreher From: Monday, March 09, 2015 2:41 PM Sent: '[email protected]' To: [email protected]; [email protected]; Patty Dreher; Paul Reed Cc: RE: Newport-Mesa Unified School District Public Financing Authority Subject: Special District Report - NMUSDPFA.pdf Attachments: Hi Susan, Per our conversation last week, please see the attached signed Cover Page and General Information page to satisfy the requirement for the Special District Reporting for the Newport-Mesa Unified School District Public Financing Authority. Additionally, please change the Newport-Mesa Unified School District Public Financing Authority to "inactive" status per the following information. The Newport-Mesa Unified School District Public Financing Authority was formed in 1994 as a Joint Powers Authority between the school district and its community facilities district 90-1 for the specific task of financing a new district headquarters and other school improvements. The Newport-Mesa Unified School District Public Financing Authority issued Certificates of Participation (COPs) which funded $3.2 million for construction of the Education Center and another $1.26 million for heating, ventilation and air-conditioning system at Corona del Mar High School. Reporting of the COPs financing appears in the District's annual audit through the 2009-10 year at which point the COPs were fully paid off. To the best of our knowledge the entity has had no activity, no income and no expense since that time. Going forward, Newport-Mesa Unified School District Public Financing Authority will file the Cover Page and General Information page to satisfy the requirement for Special District Reporting. Thank you for your assistance and if you have any questions regarding these documents, please contact me at 714 424- 5002. Patty Dreher Executive Assistant/Confidential, Business Services Newport-Mesa Unified School District 2985 Bear Street Costa Mesa, CA 92626 714 424-5002 From: [email protected] [mailto:[email protected]] Sent: Friday, March 06, 2015 9:32 AM To: Patty Dreher Cc: [email protected]; [email protected] Subject: Newport-Mesa Unified School District Public Financing Authority HI Patty, Per our conversation earlier, it appears Newport-Mesa Unified School District Public Financing Authority (NMUSCPFA) is "inactive." If so, please e-mail us a signed and dated "Cover Page" and a "General Information" page to satisfy your requirement (Please see link below). Patty Dreher [email protected] From: Friday, June 26, 2015 4:12 PM Sent: Patty Dreher To: [email protected]; [email protected]; [email protected] Cc: RE: Newport-Mesa USD Public Financing Authority Subject: Hi Patty, Yes, we've changed your status to "Inactive." Thank you, Susan Tsushima Local Government Reporting Section State Controller's Office (916) 323-2373 From: Patty Dreher [mailto:[email protected]] Sent: Friday, June 26, 2015 4:10 PM To: Tsushima, Susan Subject: Newport-Mesa USD Public Financing Authority Hi Susan, On March 3, 2015 I sent an email to you to request the Newport-Mesa Unified School District Public Financing Authority to be changed to "inactive" status per the following information. The Newport-Mesa Unified School District Public Financing Authority was formed in 1994 as a Joint Powers Authority between the school district and its community facilities district 90-1 for the specific task of financing a new district headquarters and other school improvements. The Newport-Mesa Unified School District Public Financing Authority issued Certificates of Participation (COPs) which funded $3.2 million for construction of the Education Center and another $1.26 million for heating, ventilation and air-conditioning system at Corona del Mar High School. Reporting of the COPs financing appears in the District's annual audit through the 2009-10 year at which point the COPs were fully paid off. To the best of our knowledge the entity has had no activity, no income and no expense since that time. Would it be possible to provide documentation to the District that shows that the status is now inactive? Thank you for your assistance and if you have any questions regarding this email, please contact me at 714 424-5002. Patty Dreher Executive Assistant/Confidential, Business Services Newport-Mesa Unified School District 2985 Bear Street Costa Mesa, CA 92626 714 424-5002
F5
Vertical Joint Powers Authorities in which the controlling entity transfers assets from itself to a Joint Powers Authority for the purpose of obtaining additional funding, or signs a long-term lease to a Joint Powers Authority to obtain assets, are avoiding transparency and are not acting in the best financial interest of the taxpayers. Response: The Newport-Mesa Unified School District Public Financing Authority agrees with the Findings 5; it is a Vertical Joint Powers Authority. Newport-Mesa Unified School District Public Financing Authority did request on March 9, 2015 and receive "inactive" status with the State Controller's Office.
No recommendations for this finding
F6
32 of the Joint Powers Authorities identified in Orange County are not complying with the California State reporting requirements in code Section 6500 and SB282 according to the latest information available from the year 2013. Response: The Newport-Mesa Unified School District Public Financing Authority agrees with the Findings 6; it is a Vertical Joint Powers Authority. Newport-Mesa Unified School District Public Financing Authority did request on March 9, 2015 and receive "inactive" status with the State Controller's Office. All Orange County Joint Powers Authorities that are "inactive" should submit
No recommendations for this finding

* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.