Audit clears school district of misappropriation allegations

An outside consultant has determined that the Burbank Unified School District — despite confusing record keeping that had raised accountability questions — accurately reported how it spent roughly $274 million during the past 15 years.

The findings in a report to a joint meeting of the City Council and school board on Tuesday was seen as a key part of building public trust as Burbank Unified officials set the stage for another school bond in 2013.

About $112.5 million in bonds for school improvements were approved by voters in 1997, and roughly $23 million of that was provided by the city, according to the report by Vicenti, Lloyd & Stutzman. Other money came from the state.

“I certainly, being new to the district, was anxious to see the outcome of the report,” Burbank Unified Supt. Stan Carrizosa said Monday. “I know there have been a number of changes, not just locally with [the administration] but in the actual accounting. Those of us working in the district know there have been a series of rule changes.”

The district paid $300,000 to produce the report, but City Council members defended it as a necessary exercise that the school district needed to perform.

Allegations that the district had misspent money were serious, Councilman Dave Golonski said, adding that the information and analysis of reporting methods would help prevent a hamstrung response should similar allegations be made in the future.

The review was commissioned last year after the City Council discussed the school district’s inability to provide specific documents to account for millions of dollars slated for facility upgrades that included city funds.

At the time, Councilman David Gordon said he was approached by someone in the community about alleged misappropriation of funds by the district, and began an inquiry into how money was being spent.

“I am pleased to see that the current superintendent and school board members have taken necessary steps to restore the public’s trust and confidence,” Gordon said in an email before the joint meeting Tuesday. ”However, important questions of responsibility for missing records and/or public funds remain unanswered.”

Vicenti, Lloyd & Stutzman found no fraudulent activity, but noted accounting practices improved in the last few years compared with the late 1990s, said Linda Saddlemire, a partner with the firm.

In the report, Carrizosa noted that school officials had been tracking how state and local funds were being spent, but to varying degrees of detail because state regulations changed.

In combing through the record keeping for the report, Saddlemire said her firm established a new accounting database of major construction projects for the district.

She called the work for the district “unique” because it overlaps fiscal years and because it goes back 15 years.

“There’s nothing that’s not accounted for or misappropriated,” Saddlemire said.

Accounting records from 1995 to 2010 were reviewed for the report, which states “a high degree of reliability can be placed on the accuracy of the amounts reported by the district.”

Some “variances” were found, but they had a minimal impact on total expenditures reported for each major facilities project, according to the report.

“Overall, we’re pleased that we’re able to account for nearly all of the funds,” Carrizosa said.

Recommendations in the report included developing a “robust document retention” policy, a more specific definition of the destruction date for disposable records and continued maintenance of a comprehensive project listing that includes total expenditures.

Carrizosa said school officials were especially confident going forward.

“Everything in the last five to six years can be tracked down to the penny,” he said. “We cleared a little of the smoke and concern about what may have been burning in the past.”

A Facilities Master Plan had been put on hold to allow the school district to address the accounting matter before asking the public to approve another bond for school improvements, Carrizosa said.

Still in the early planning stage, a project list and bond size may not be determined until February, according to the district. The bond could go before voters in 2013.