Score: +4 (6/12/2)

Sacramento County Grand Jury • 2003-2004

Sacramento City Unified School District Selection of a Retirement Incentive Program Issue Did the Sacramento City

Published: January 21, 2004 8 pages

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⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.

⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.

Findings and Recommendations 6 findings

No written comparative analysis of retirement incentive options was prepared for the public, staff or the Board of Education.

Related Recommendations (1)

On matters of significant cost, detailed analyses should be in writing, rather than oral summaries.

Staff could not provide the Grand Jury with documentation that the Board of Education received clearly understandable written information outlining the assumptions underlying the PARS proposal.

Related Recommendations (1)

Written key assumptions underlying major decisions should be presented to the Board of Education.

Too much reliance for financial analysis was placed on the representations of the vendor (PARS). There was no independent financial review of the PARS assumptions or numbers before or after the program was selected.

Related Recommendations (1)

A detailed process should be adopted for independent financial review by appropriate district personnel, or outside consultants, prior to action on matters of significant expense. Matters of this magnitude should be the work product of a multi-discipline team. Matters brought by outside interests who have a significant financial interest require independent evaluation.

No analysis was done by the district to determine the effectiveness of the program in relation to the stated goal of saving $2.6 million in the first year.

Related Recommendations (1)

Standards need to be developed by the district for a timely evaluation of the financial impact of major expenditures. PARS savings need to be identified for years 2-5.

District staff and the Board of Education did not take adequate steps to ensure confidence in the process used in adopting the PARS program. In light of the failure of CASA for SCUSD, the district should have been especially careful in entering into another retirement related program.

Related Recommendations (1)

District staff and the Board of Education need to put policies and procedures in place to ensure accountability when using public monies. The district needs to be more open in its business transactions.

Board of Education meetings are currently video taped, but the tapes are only retained by the Sacramento Public Library for 60 days.

Related Recommendations (1)

SCUSD should retain video tapes for three years or longer. Response Requirements Penal Code sections 933 and 933.05 require that specific responses to both the finding and recommendations contained in this report be submitted to the Presiding Judge of the Sacramento Superior Court by October 1, 2006 from: (cid:131) Superintendent, Sacramento City Unified School District (cid:131) Board of Education, Sacramento City Unified School District 28

Agency Responses 2

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

Sacramento City Unified School District

September 28, 2004 • 15 pages • 11 responses • Score: +2 (+3, 6, -1) View Details ▾

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11 responses to findings and recommendations

No written comparative analysis of retirement incentive options was prepared for the public, staff or the Board of Education.

Response: Disagree Partially Score: 0

Partially Disagree with Finding. The Board did explore the proposal presented by the CFO and supported by the Superintendent. Several staff memoranda and presentations were prepared on the subject of the proposed JPA and its alternative pension plan. Throughout this process, the Board was continually reassured by its outside independent legal counsel and consultants that the proposed system was legal, that another public school district had already implemented a similar system and that the entire concept was cost and revenue neutral to the District because the District would only be redirectin...

On matters of significant cost, detailed analyses should be in writing, rather than oral summaries.

Response: Implemented

Score: 0

Already Implemented. Every agenda item that comes before the Board for action has an accompanying staff memorandum that follows a mandatory format. One of the subjects that must be addressed in the memorandum is any "financial considerations" the proposed action may have on the District. As recognized by the grand jury, members of the Board must rely upon the expertise of staff to advise them in complex areas such as school finance and accounting. When District staff does not possess the required expertise, outside consultants are retained. Except for those circumstances where laws regarding ...

Staff could not provide the Grand Jury with documentation that the Board of Education received clearly understandable written information outlining the assumptions underlying the PARS proposal.

Response: Agree Score: +1

Agree with Finding - With Clarification. The joint powers agreement was an agreement between the District and Yolo County Office of Education and did not authorize the transfer of employees to CASA. After the JPA was formed, the District approved an operating agreement between the District and CASA. The operating agreement authorized an unpaid leave of absence for certain classified employees who wanted to become CASA employees. The individual employees were not "transferred" but were instead empowered to choose whether to remain in their existing status or take a leave of absence to join CASA...

Written key assumptions underlying major decisions should be presented to the Board of Education.

Response: Implemented

Score: 0

Already Implemented. This recommendation matches existing Board Policy and therefore has effectively already been implemented. The Board was never informed of the magnitude of the compensation increases granted to the former Superintendent, CFO and General Counsel and, in fact, was misled to believe that the compensation packages granted to these former employees were within the norm for similar public school districts and did not have the financial impact that later proved to be the case. The Board has directed its attorneys to void or otherwise extinguish the ten years of service credit gran...

Response: Disagree Partially Score: 0

Partially Disagree With Finding. The Board believed that it was exercising oversight and management of CASA through its trusted administrative staff. As the grand jury recognized in its Final Report, "[i]nasmuch as Board members make decisions in complex areas, they depend on district administrative staff for advice and recommendations . . .." The District's senior administrative staff, including its Deputy Superintendent and Chief Financial Officer, Laura Bruno, and the District's outside counsel, Girard & Vinson, were heavily involved in the creation and operation of CASA. The Board trusted ...

Response: Unknown

Score: 0

Implementation Under Way with Qualification. As the grand jury recognized in its Final Report, "[i]nasmuch as Board members make decisions in complex areas, they depend on district administrative staff for advice and recommendations . . .." To function properly, the Board must be able to delegate technical or specialized tasks to individuals with the expertise to perform them. Additionally, the Board did demand timely reports and audits of CASA and its pension plan. (See

No analysis was done by the district to determine the effectiveness of the program in relation to the stated goal of saving $2.6 million in the first year.

Response: Agree Score: +1

Agree in Principle with Finding. The Board did agree to provide the former Superintendent (in recognition that there had been a pay differential with other superintendents), CFO and General Counsel with increased retirement benefits and alignment of their contract termination dates, but only with the express understanding that there would be no additional cost to the District. This was done as part of the normal process for reviewing and updating an employment contract.

Standards need to be developed by the district for a timely evaluation of the financial impact of major expenditures. PARS savings need to be identified for years 2-5.

Response: Implemented

Score: 0

Already Implemented. Board Bylaw 9270 sets forth a comprehensive policy regarding conflicts of interest, covering incompatible activities, prohibited financial interests, gifts and honoraria. Board Bylaw adopts the Fair Political Practices Commission model conflict of interest code and designates those positions that are subject to the code's disclosure requirements as well as the level of disclosure. The Superintendent, Deputy Superintendent/CFO and General Counsel are all designated positions, along with the rest of the District's Associate Superintendent and Director positions. In addition ...

Response: Agree Score: +1

Agree with Finding. The former CFO has retired and the District has severed its relationship with the numerous consultants who advised the District on the formation and operation of CASA, except that former outside counsel is completing a few totally unrelated litigation matters, where substitution at this point would be uneconomic. Finding 6. The Board authorized the issuance of an unnecessary $6.5 million pension obligation bond and incurred financial liability with little or no discussion or understanding of the possible financial impact to the District. The $420,709 cost to issue the bond ...

Response: Implemented

Score: 0

Already Implemented. The current Superintendent has implemented a practice whereby all public questions and/or concerns are recorded by her staff and subsequently assigned to the appropriate administrative staff for follow-up, which is promptly provided to the member of the public by phone call or in writing.

Board of Education meetings are currently video taped, but the tapes are only retained by the Sacramento Public Library for 60 days.

Response: Disagree Score: -1

Disagree with Finding. The District relied upon its trusted staff and its independent consultants to properly analyze this very complicated financial transaction. The District's financial advisors, Northcross, Hill and Ach, were serving as financial advisors and underwriter for the CASA bond issuance. The District's bond counsel, Jones Hall, were serving as CASA's bond counsel. The District's outside counsel, Girard & Vinson, were advising both CASA and the District. None of these professionals ever told the Board that their loyalties ran exclusively to CASA with respect to the bond transactio...

Sacramento City Unified School District

September 28, 2004 • 15 pages • 11 responses • Score: +2 (+3, 6, -1) View Details ▾

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11 responses to findings and recommendations

No written comparative analysis of retirement incentive options was prepared for the public, staff or the Board of Education.

Response: Disagree Partially Score: 0

On matters of significant cost, detailed analyses should be in writing, rather than oral summaries.

Response: Implemented

Score: 0

Staff could not provide the Grand Jury with documentation that the Board of Education received clearly understandable written information outlining the assumptions underlying the PARS proposal.

Response: Agree Score: +1

Written key assumptions underlying major decisions should be presented to the Board of Education.

Response: Implemented

Score: 0

Response: Disagree Partially Score: 0

Response: Unknown

Score: 0

No analysis was done by the district to determine the effectiveness of the program in relation to the stated goal of saving $2.6 million in the first year.

Response: Agree Score: +1

Standards need to be developed by the district for a timely evaluation of the financial impact of major expenditures. PARS savings need to be identified for years 2-5.

Response: Implemented

Score: 0

Response: Agree Score: +1

Response: Implemented

Score: 0

Board of Education meetings are currently video taped, but the tapes are only retained by the Sacramento Public Library for 60 days.

Response: Disagree Score: -1