School Board Changes Audit Procedure After Probe

The Los Angeles Unified School District has, in the last few days, instituted new auditing procedures in the wake of charges by the district attorney that school employees schemed to embezzle at least $500,000 by stealing and reselling supplies, school board members said Monday.

But board President Rita Walters and member Tom Bartman said that the changes will not be revealed until Dist. Atty. Ira Reiner’s office has completed its investigation, which has already resulted in formal charges against the district’s deputy director of operations and the placing on paid leave of five other employees, including the director of operations.

“We are not going to do anything to jeopardize the greatest single deterrent to this kind of white-collar crime--the prosecution and punishment of those involved,” Bartman said.

Earlier, Associate Supt. Jerry Halverson explained that the district does not want to identify changes that might tip off others, as yet unidentified, who may be involved in thefts.

The board officials and Halverson did disclose two previously unannounced changes in the auditing system that they said the board had adopted last spring after the district attorney’s office had concluded another theft investigation without filing charges. The earlier case involved some of the same people as the current case.

Halverson said that, henceforth, whenever the district’s purchasing branch identifies any request to acquire supplies as going beyond the norm of past acquisitions by more than 10% or 15%, “everything will be stopped and an inquiry made.”

The earlier investigation had indicated that there had been a $20,000 order for herbicides, much more than the district needed or had ever ordered. There were indications, then, that some of this had been resold, with the receipts going to individual employees, not the district.

Second, Halverson said, the district will henceforth tell suppliers on the actual contract where the materials ordered should be delivered and not allow personnel to give such directions verbally.

In the earlier case, investigators found that the herbicide had been delivered direct to private business facilities rather than the school district’s facilities. The reason given was that according to state environmental standards, the district had no facilities to safely handle the herbicides.

Halverson, Bartman and Walters said such sites have now been identified and that no more such materials will be allowed to be delivered outside district facilities.

The district official already booked on suspicion of embezzlement of public funds is Melvin N. Tokunaga, 42, of Agua Dulce, an employee of the district since 1972. His superior, operations director James L. Riley, 55, of Lynwood, an employee since 1957, has been put on paid leave but not charged, as have four other employees who have not been identified.