San Diego County Grand Jury • 2015-2016

San Ysidro School District Indebtedness

Published: May 24, 2016 13 pages
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Note: Missing finding numbers detected: F11

Findings 13 findings

F01
Strategic plans assure accountability and transparency. Fact: In 1997, San Ysidro School District voters approved a $250 million school bond to build new schools and modernize outdated ones. Fact: When the bond was approved, state law did not mandate a Citizens’ Board Oversight Committee; as of 2000 it is obligatory for school bond issuance. Fact: San Ysidro School District did not implement a 1998 request to establish a citizen committee to oversee the spending of bond funds. Fact: There has never been, nor is there currently, any independent entity giving citizen oversight to the San Ysidro School District bonds and COPs.
F02
A citizen oversight committee for bonds and COPs would increase transparency and accountability. Fact: San Diego County Office of Education has financial oversight responsibility for school districts in the county. 8
F03
San Diego County Office of Education guidance on establishing a citizens’ oversight committee would strengthen the process. Fact: San Diego County Office of Audits & Advisory Services found improper expenses and unreimbursed transfers of bond funds.
F04
Absence of internal controls and citizen oversight of bond fund transactions allowed errors to go unnoticed and uncorrected. Fact: Bond and COPs are still being dispersed, but the information is not publicly available.
F05
To facilitate transparency and accountability, the continuing status of the bond and COPs should be easily available to the public. Fact: The county audit identified significant deficiencies in San Ysidro School District’s internal controls. Fact: San Ysidro School District purchased environmentally protected land for the purpose of constructing a new school. Fact: San Ysidro School District must make mitigation payments in perpetuity for environmentally protected land it purchased.
F06
San Ysidro School District failed to conduct due diligence on land purchases. Fact: San Ysidro School District lacks adequate oversight of bond proceeds and expenditures. Fact: Prior administrations failed to implement a strong system of internal financial controls and records retention and destruction.
F07
The lack of standard formal accounting policies and procedures contributed to San Ysidro School District financial problems. Fact: Staff were unaware of approved California school accounting practices. Fact: District personnel destroyed records without regard or knowledge of state- mandated records retention and destruction requirements. Fact: San Ysidro School District lacks a staff financial policies and procedures manual. 9
F08
Written standard operating procedures provide would provide essential information to employees.
F09
Staff without proper training contributed to errors in accounting practices. Fact: School District Trustees have been uninformed concerning their membership and duties as directors of the San Ysidro School Public Financing Corporation.
F10
A corporation with directors who do not know their responsibilities cannot function properly. Fact: San Ysidro School District Trustees failed to perform their fiduciary duties to the citizens of San Ysidro School District. Fact: San Ysidro School District Trustees lack training and/or understanding of their role and responsibilities. Findings 11: Poor decisions by the Board of Trustees significantly contributed to San Ysidro School District financial problems. Fact: Improper and unauthorized activities occurred at San Ysidro School District, including intentional destruction of records, purchases of unusable land, and contracts made by prior superintendents without proper authority. Fact: The OAAS audit, primarily focused on bond and COP issues, does not examine the entire financial status and operations of San Ysidro School District.
F12
To assure transparency and accountability, and to restore public trust in San Ysidro School District’s operations, an independent forensic audit of San Ysidro School District is warranted. Fact: San Diego County Office of Education is the link between San Ysidro School District and the California Department of Education. Fact: In FY 2012-2013 San Ysidro School District issued a COP after San Ysidro School District was rated negative and under San Diego County Office of Education financial supervision. Fact: The San Diego County Auditors and Controllers’ Office Report found that the San Diego County Office of Education inadequately monitored San Ysidro School District fiscal condition. 10
F13
San Diego County Office of Education needs to be directly involved in providing proper accounting policies and procedures to ensure San Ysidro School District’s financial stability.
F14
San Diego County Office of Education’s strong support of an independent forensic audit would demonstrate to San Ysidro School District citizens that significant actions beyond the district are being taken to fulfill SDCOE’s duties to the state and to rectify San Ysidro School District’s financial problems.

Recommendations 14

No Responses Found 2

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

San Diego County Office of Education Agency
San Ysidro Elementary School District School District