Two teachers ordered to return more than $148,000 in overpayments

Two former Los Angeles teachers face a court order to return salary overpayments of more than $148,000, part of an increasingly aggressive push by the Los Angeles Unified School District to retrieve $9.4 million from employees who were inadvertently caught up in its malfunctioning payroll system.

The judgments were approved this month in Los Angeles Superior Court against Adalberto Castro, who allegedly received an unanticipated windfall of $96,482, and Christina Garcia, who allegedly was overpaid $52,345.

The debacle began with the activation of Business Tools for Schools, a computerized payroll system, on Jan. 1, 2007. Over the next months, thousands of employees were overpaid, underpaid or not paid at all. Castro and Garcia, who were on unpaid status at the time, are accused of receiving some of the largest overpayments and returning nothing.

District officials said that they made numerous attempts to contact both employees by phone and mail. “Defendants have either failed or refused to pay these unearned funds, despite multiple demands for repayment,” the lawsuit says.

About 35,000 employees received nearly $60 million in overpayments in 2007. The “most significant event,” in the words of the suit, occurred on June 5, 2007, when the district overpaid roughly 23,000 employees a total of nearly $25 million, five months after officials began trying to correct the flawed system.

The school district, the nation’s second-largest, is still determining the full number of employees affected and how much they were overpaid on that day.

Among the types of errors were excessive illness pay, duplicate payments and the compensation of part-time workers as though they were full-time. The system also mishandled compensation for many employees, including teachers, who had the summer off but had their paychecks spread out over the year.

Most employees have returned all owed money, with the first $250 forgiven, or arranged installment payments. According to the district, about 2,400 former and current employees still have outstanding payments; the average amount is less than $5,000.

In addition to creating overpayments, the defective system also shortchanged many employees, causing substantial financial hardship and catapulting thousands into lengthy dealings with the district’s labyrinthine bureaucracy to set matters straight.

The district hired specialized consultants and district staff worked long hours to help employees. Senior officials apologized repeatedly, but the fallout further scarred the district’s reputation.

“It was a devastating blow, an eye-opener for the world to see how incompetent people were in the district,” said A.J. Duffy, president of United Teachers Los Angeles, which represents district teachers.

“I think the district is vastly different now, but what’s still there is a bureaucratic mentality,” he said.

Duffy said he’s working amicably with senior officials to “resolve these issues one way or another,” but he said some lower-level staffers, for example, refuse to review an employee’s documentation that conflicts with calculations made by L.A. Unified.

Repairs and other problems related to the $95-million system cost the district at least $37 million; the district received nearly half of that amount in a settlement with the vendor Deloitte Consulting, a subsidiary of Deloitte Touche.

The district’s ongoing budget crisis has magnified the importance of retrieving overpayments, said L.A. schools Supt. Ramon C. Cortines.

Jobs could be saved, he said, “if the teacher in the next room, or the building and grounds worker at the school and other co-workers pay up.”

And if they don’t, they can look forward to litigation and a collection agency, said district officials, who decided to make public examples of Castro and Garcia.

Neither could be reached for comment.

Castro began working for the district in 1979 at Middleton Street Elementary in Huntington Park and, in his last assignment, worked briefly at Palms Middle School on the Westside.

Garcia began her career with L.A. Unified in 1993 at City Terrace Elementary east of downtown. She most recently taught at Multnomah Street Elementary in El Sereno.

Citing privacy restrictions, the district declined to say why the two teachers were on unpaid status.

But the term typically is used when employees are on a leave of absence and have run out of paid time, said district spokeswoman Gayle Pollard-Terry.

The district also filed a claim against former school nurse Anne Ryan, who now lives in Colorado. She has agreed to repay $34,801, officials said. Attempts to reach her at home and through her attorney were not successful.

“Thousands of honest employees voluntarily paid back the money,” said district general counsel Dave Holmquist. “We are aggressively pursuing the holdouts who are, in effect, stealing dollars that should be spent on instruction or to save jobs.”

howard.blume@latimes.com