ORANGE COUNTY PERSPECTIVE : Toward Restoring Confidence

There’s disheartening news from the Newport-Mesa Unified School District this week: Stephen A. Wagner, the district’s chief finance officer, is under investigation by the district attorney’s office in connection with diversion of at least $57,000 to a firm that Wagner co-owns. Schools are so hard-pressed for funds as a result of state cutbacks that the prospect of any loss due to fraud is especially frustrating.

But something more than an emotional response is required. Forrest K. Werner, school board president, is on the right track in promising that the district, which includes Newport Beach and Costa Mesa schools, will overhaul its financial procedures to make sure that a loss of this kind never recurs.

One procedure already in place--requiring two signatures on dispersal checks--is usually an effective safeguard against fraud. But it can protect the district only if it is used. Merely having the requirement wasn’t enough because a check bearing only Wagner’s signature was diverted to Cobbler Express Corp., a shoe repair firm he co-owns. Obviously, something in the system failed.

The Newport-Mesa board is moving toward firing Wagner, who has not been charged but has been suspended without pay. A final vote is expected as early as Nov. 10. The district is also conducting an assessment of the extent of the damage, which those close to the investigation believe might rise to more than $100,000. That’s a lot of books and classroom supplies.

With this latest scandal, Newport Beach residents, especially, must be wondering if there’s something strange in the city’s water supply. First there was the shocking disclosure that city Utilities Director Robert J. Dixon had defrauded the city of $1.8 million. He is serving a four-year prison term after admitting the theft.

Then several current and former female members of the Newport Beach Police Department filed suit alleging rape or sexual harassment. Police Chief Arb Campbell and Capt. Anthony Villa, both named in the lawsuit, have been placed on paid leave pending an investigation.

The Wagner case, sadly, is bound to deal yet another blow to the city’s confidence in its public officials.