Audit Blasts Inglewood’s School District

The Inglewood Unified School District is plagued by fraud and mismanagement and has become a “dysfunctional organization in severe danger of both operational and financial collapse,” according to an independent audit by a financial consulting firm.

The Inglewood Board of Education ordered the investigation after it began to question how its former custodian supervisor managed to accumulate a $1.2-million deficit over a five-year period without raising suspicion.

The supervisor, Andrew Lee Truesdale, is suspected of walking away with at least $441,000 through a phony payroll scheme involving the hiring of phantom workers and the falsification of records. Truesdale’s Dec. 8 arrest on suspicion of fraud and embezzlement prompted stunned officials to hire a consultant to investigate whether other departments were involved.

The report, released this week by Marina del Rey-based Fuller & Co., concluded that the problems run deep.

The lack of oversight resulted in “an environment in which the misappropriation of funds or property can occur with relative ease,” the reported stated, pointing to the possible involvement of high-ranking administrators. “Certain district personnel outside of the custodial area of the maintenance unit were either highly incompetent, grossly negligent and/or complicit in the alleged fraudulent activities.”

School board President Dexter Henderson said the district must “face up to the fact that we have some real serious problems. There was a lack of the kind of internal system of controls that we should have here. . . . Ultimately, the board has to take responsibility for what has been put in our lap.”

Parents in the financially troubled district put it more succinctly.

“A flag should have gone up,” said Gwen Peterson, an Inglewood mother of two.

It was the absence of any warning signs that troubled investigators when they began looking for the personnel records of 207 substitute custodians hired by the district since 1991.

For many of these temporary employees, the only requirement for getting hired was Truesdale’s signature, the report said. The school board signed off on the hirings with no questions asked, the report said.

“They were added to the budget without going through the proper checks for budget and other important essential administrative steps,” said Leonard R. Fuller, president of the consulting firm.

The audit also uncovered other disturbing practices that indicate serious mismanagement, he said.

Personnel records were missing for more than half the 207 custodian substitutes. Of those remaining, none were complete, missing fingerprints, Internal Revenue Service forms and Immigration and Naturalization Service documentation, the report said. Altogether, about 50 names on the payroll were determined to be bogus. Fuller said the list included aliases, the names of people who were hired but never did any work and those of people who allowed others to use their names.

Poorly kept records indicate that additional hours were not being claimed, as required by law, by employees who worked overtime but didn’t want to make waves.

The investigation also found that some custodian substitutes were being asked to paint and clean private homes and businesses on district time.

“It all points to broader problems--a breakdown in policies and practices,” Fuller said.

In addition, inventory records were found to be maintained poorly, if at all. The report outlined a practice in which employees were allowed to borrow equipment to take home without anyone checking to see if it was returned.

“The district has no complete inventory of what it has,” Fuller said. “No one knows what happened to a recently purchased $8,000 printer. Now how a printer turns up missing is anybody’s guess.”

The losses are a particularly hard blow because the district, with an estimated yearly budget of $100 million, has a deficit of about $6 million. The funding shortages have compounded problems in the 20-school district, which has nearly 16,000 students and 4,000 employees.

Inglewood police, meanwhile, are continuing a criminal investigation in the wake of Truesdale’s arrest.

The Inglewood Board of Education accepted the report at its meeting Wednesday night and authorized the consulting firm to help the district implement a series of recommendations aimed at improving management. The board ordered a districtwide freeze on purchases, and Supt. McKinley Nash vowed to interview top personnel to determine if any were involved in the scheme.

Henderson said the district’s ongoing financial difficulties have tended to wear down many who work there.

“I tend to believe there is a culture of mediocrity in the district,” he said. “It’s been bad so long people begin to expect it.”

State education officials warned the district more than two years ago that it was underestimating the severity of its budget problems. Recently, unions have criticized the district, saying it could have avoided embezzlement problems by hiring more full-time, permanent employees.

Despite the bleak findings, Fuller said the district can still avoid being placed under state receivership like the financially troubled Compton Unified School District. If it acts swiftly, he said, it can pull out of its administrative morass.

“The patient is critical, not terminal,” he said.