Officials Unsure Anything Is Wrong : ABC Schools Audit Follows Spate of Rumors

While schools remain closed for summer vacation, the season has not been dull for the ABC Unified School District Board of Education.

Over the summer, district trustees have:

- Hired an accounting firm to investigate allegations of “impropriety and misuse of funds.”

- Fired the accounting firm after there were complaints about the investigation.

- Ordered its new superintendent to request that the district’s regular auditing firm conduct “an intense audit” of the district management operation.

- Asked the superintendent to also consider asking the Los Angeles County office of education to examine business operations of the 22,000-student district.

Meanwhile, a group of parents has asked the Los Angeles County Grand Jury to launch an investigation to determine if there has been mismanagement of funds and property in the district.

After all of this, though, some parents and board members say they are uncertain exactly what it is that is being investigated.

Board member Dianne Xitco requested the first inquiry, and the board agreed to hire the accounting firm of Price Waterhouse & Co. on an open-ended contract to investigate the allegations.

Xitco said she acted after receiving three phone calls from people alleging improprieties going on at both the staff and board levels. She said the callers requested anonymity and she agreed not to identify them.

No Specific Allegations

Xitco said the allegations were never specific, only that “there was dishonesty” and “misuse of funds.” Normally, Xitco said, she would have dismissed these allegations as gossip. “But I thought it was important to clear things up,” she said.

In hindsight, board member Barbara Goul said, “It would have been easier if we had been clearer on what we were investigating.

“I relied on Dianne’s thinking as to how serious it was,” Goul said.

Board President Peggy Lee said she agreed to the audit because she had been approached at least once by a person who alleged that there was “dishonesty going on, particularly in the business office and that the board was covering it up.”

The Price Waterhouse investigation was canceled a month after it began, after the board was criticized by some for the probe.

“The district would be bankrupted if we went after every rumor,” said Fran Evans, chairman of a seven-member, board-appointed budget committee. “Rumors can be checked internally. This was poor planning.”

Cost of Investigation

Evans further criticized the board for not discussing how much the Price Waterhouse investigation would cost.

The district has yet to receive a bill for the inquiry, which started in mid-July and was stopped Aug. 4, Lee said. The greatest expense “will be phone bills,” Lee said.

The phone calls are what some parents are most angry about and prompted some of them to ask for an investigation by the grand jury.

“This guy from Price Waterhouse was calling people on the phone asking them what was wrong with the district,” said Dixie Primosch, a parent who has been active in school district affairs. “He was asking us if we saw any fraud in the district and if we knew anything we would divulge.”

Primosch said she and some other citizens “decided to go to the grand jury and have the district investigated.”

Primosch, George Medina, Jim Weisenberger )and Wendy Strong sent a letter to the grand jury on Aug. 11, listing eight general reasons for a probe.

List of Charges

The letter included charges that the district had a consistent pattern of deficit spending yet had constantly increased salaries; knowingly admitted inaccurate financial information to comply with state requirements; ignored the public’s request for information regarding district property, and violated board policies on nepotism.

“If there is nothing there, then a fair and independent body like the grand jury will look at it and clear the air,” said Medina, who is also a member of the budget committee appointed in March to balance the budget, increase reserves and deal with lottery money the district was receiving.

“We met for months. It was frustrating because every time we asked the district staff for information that would help us make cuts, we were ignored,” Medina said. Meanwhile, Supt. Kenneth L. Moffett, who has been on the job for less than two weeks, is trying to come up with some answers. Moffett, 51, had been superintendent at the 5,000-student Lennox School District. Lennox is in an unincorporated area next to Los Angeles International Airport. Moffett replaced Eugene Tucker, who became superintendent of the Santa Monica-Malibu Unified School District.

Moffett said he has asked the auditing firm of Vavrinek Trine Day and Co. to conduct a more detailed look at the district’s business operations, including the bidding process, the property control system, revolving cash fund and deficit spending.

Moffett said he also hopes the audit firm can hold a study session for board members, staff and interested citizens on how an audit is conducted.

‘Complete Review’

The superintendent said he is meeting this week with a management consultant team from the Los Angeles County office of education to see if a “complete review of the district’s business operation” could be conducted.

“In light of all of the questions, this is a double-thrust attempt to get some answers,” Moffett said.

Questions raised by citizens in recent months are neither new nor “startling,” board member Richard Arthur said.

For instance, he said, there have been questions about the closing of two schools in 1983 and the lack of an appraisal by school officials on 18 acres of district land next to Whitney High School, which was being looked at as a site for a badly needed gym for the high school.

The district closed Bloomfield and Cabrillo Lane elementary schools because of low enrollment. The Bloomfield property was sold to the Hawaiian Gardens Redevelopment Agency for $3 million, and the Cabrillo Lane property was leased for a $1 a year to Cerritos College, board President Lee said.

Since the Bloomfield sale, Lee said, members of the public have repeatedly asked why the $3 million was not placed in the district’s general fund budget. Legally, Lee said, the district is bound by state law to spend the money only for deferred maintenance and capital improvement projects.

College Agreed to Improvements

She said even though the district was only leasing the Cabrillo Lane property to the college for $1 a year, the college had agreed to make needed improvements on the property.

An appraisal was not made on the Whitney land because the district was negotiating with the City of Cerritos, which had offered $2.5 million for the site and some board members, including Lee, believed it was an offer the board should take, she said.

Negotiations fell through in April, though, when Cerritos refused to pay more for the land and the school board rejected the city’s offer. A coalition of Whitney parents, including Primosch, had argued that the offer was too low because the property was at a prime corner lot. However, Cerritos had noted that it is zoned for open space and the City Council has said it will not change the city’s master plan to allow commercial or residential development.