Contra Costa County Grand Jury • 2008-2009

Leadership Crisis Imperils Mount Diablo School District To: The Board of Trustees of the Mt Diablo Unified School

Published: March 27, 2009 4 pages
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Findings and Recommendations 11 findings

F1
The Mount Diablo Unified School District has a $286.3 million budget for the 2008-2009 fiscal year.
No recommendations for this finding
F2
The Superintendent, rather than the Board, controlled the agenda for board meetings and decided what information to give or withhold from the Board.
No recommendations for this finding
F3
Some Board members did not have a full understanding of their duties regarding their function and financial responsibilities to taxpayers. As a result, they failed to lead and instead, followed the Superintendent’s directives.
No recommendations for this finding
F4
The District had not paid its correct federal payroll tax obligations for several years. In 2005 the District paid a levy of over $105,000 for payroll taxes, interest, and penalties. The Board did not approve these payments and was unaware of these issues because financial documents given to the Board lacked adequate detail. In 2008 the IRS informed the District that it may owe $833,000 in unpaid payroll taxes, interest, and penalties. This matter remains unresolved as of this writing.
No recommendations for this finding
F5
ADP, a private corporation which had served as the District’s payroll tax processor, cancelled its contract in November 2006, because the District failed to fund the necessary amounts to provide for payment to the IRS.
No recommendations for this finding
F6
The Board approved the creation of an in-house attorney position as a cost cutting measure. It directed that the attorney report to the Superintendent. This reporting relationship limited the volume and type of work provided to the Board by the in-house attorney.
No recommendations for this finding
F7
Between 2002 and 2007, the District paid for work performed by an outside law firm. The law firm worked without a valid contract. This action violated District policy and the Board was unaware of this situation because renewal contracts were not forwarded by the Superintendent.
No recommendations for this finding
F8
District policy dated 7/16/2002 requires Board approval for all bills over $25,000. The Superintendent frequently violated this policy by not submitting bills in excess of $25,000 to the Board. As one example, he unilaterally authorized payment in 2007 of a disputed bill for almost $110,000 to an outside legal firm.
No recommendations for this finding
F9
The Superintendent withheld critical financial information from the Board.
No recommendations for this finding
F10
The Superintendent inhibited the free exchange of information between various departments within the District. These actions undermined employee morale and, in some cases, led them to not report for work or to resign.
No recommendations for this finding
F11
That the Board consider approving any unauthorized contracts retroactively to adhere with policy. CONCLUSION: The administrative and financial functions of the Mount Diablo School District have been in chaos. The Superintendent and a Board majority have allowed continuing policy violations, the non-payment of Federal Payroll Taxes, and the disbursement of monies without required Board approval. The subsequent time and attention devoted to these matters detracts from the District’s educational mission and contributes to continuing budget problems. In December 2008, the leadership of the Board changed. Since that time the Grand Jury has noticed positive movement. The Grand Jury strongly advocates its recommendations be adopted immediately.
No recommendations for this finding

Conclusions 1

No Responses Found 1

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

Mount Diablo Unified School District School District