Audit Critical of Inglewood School District Management

One of the “employees” in the custodial department was a dead man. Another was a prison inmate, according to auditors. And the Inglewood Unified School District paid them on time, every month.

The district wrote checks to a total of 51 phantom janitors in the scam allegedly masterminded by a custodian supervisor. That no one noticed--or at least reported--the alleged embezzlement for over a year, during which $441,000 disappeared from already depleted coffers, indicates crisis-level management problems at the long-troubled school system, according to a private auditor’s report commissioned by the district and issued earlier this month.

It is also evidence, say some union officials and teachers, that Inglewood Unified continues to founder two years after a new superintendent was brought in and three years after county education officials sent a financial advisor to the district.

The accused custodian supervisor, Andrew Lee Truesdale, “is a scapegoat for all this,” said Christopher Graebel, director of Cal Pro, which represents nonteaching school workers in the district. “People higher up should have been watching. In any other organization, there would be resignations on the superintendent’s desk--and probably the superintendent’s.”

Truesdale, who has declined to comment on the case, was arrested in December on suspicion of embezzlement, but has not been charged in the incident. He was suspended without pay, and the district held a termination hearing in the case last week, said attorneys for the district. A decision has not been made.

Since the alleged scheme came to light, there have been additional indications that the district’s administrative problems may be widespread: The assistant superintendent for business services has been reassigned, another employee was convicted of embezzling district funds in an unrelated case and a criminal investigation by Inglewood police is underway.

The auditors, from Marina del Rey-based Fuller & Co., are working on a second, more comprehensive report, due by June.

While conceding that the district still has many problems, district officials and others say the financial forecast has begun to brighten under Supt. McKinley Nash and Richard Bertain, who served as the county-appointed fiscal advisor from 1993 to 1995 and is now working as a private full-time consultant to the district. The county’s appointment of Bertain was considered two steps shy of a takeover by the state, which is what occurred at nearby Compton Unified School District.

A midyear report card, issued by the county last week, paints a cautiously optimistic portrait of a financially troubled district slowly pulling some of its accounts back into the black.

Bertain was sent in by county officials in 1993, with authority to veto financial decisions by the superintendent and the Board of Education but without the power to plot fiscal strategy. Two years later, crediting Bertain with helping the district improve its finances, the county pulled him out of the position.

Some funds, such as an emergency reserve account, however, have continued to sink deeper into the red. All told, the district is running a deficit of $6 million.

“They have taken some significant steps toward fiscal health,” said Kenneth Shelton, the county’s assistant superintendent for business services. “Are they out of the woods yet? No. But they’re moving in that direction.”

Administrators, board members and outside auditors agree, however, that putting the finances of the district in order likely will not be enough to guarantee long-term stability, unless it is accompanied by a radical overhaul of administrative procedures.

The report found that “members of management hold the district and its rules in near total disdain,” and that management and financial procedures are either “nonexistent, ad hoc (based on memory rather than documentation), and largely ignored and circumvented where they did exist.”

Such an atmosphere makes accurate record-keeping difficult, the report says, and allows malfeasance to flourish.

According to one employee quoted in the report, the prevailing attitude toward school property is: “If it isn’t nailed down you steal it.” And employees, the report says, “routinely take district property home for their personal use.” After randomly checking a small sample of equipment purchase orders, the consultants found $25,000 worth of computers and lawn equipment at the homes of district employees.

The same week the Fuller report was made public, Langston Phillips, 22, a clerk in the district’s administration office, was convicted of embezzling public funds. He pilfered $20,000 worth of district checks and deposited more than $4,000 of them into his personal account, said Inglewood Police Det. Paul Harvey.

The most telling example of breakdown in the district’s system of checks and balances, however, may be the alleged custodian scheme--a fraud that should have immediately thrown up red flags, administrators and auditors agree.

Many of the bogus custodians had similar or identical last names and listed the same mailing address, according to the report.

It said the payroll department--in an unusual move--agreed to turn over all custodial staff checks to Truesdale and allow him to distribute them to his staff.

Police are investigating whether Truesdale, 49, had phony employees sign the paychecks, then gave them a portion of the money, keeping most for himself. He was arrested as he took a check to the home of one of the bogus employees, police said.

Harvey said Inglewood police have interviewed dozens of people, both private citizens and district employees. He said he expects at least four people to be charged in connection with the alleged scam.

If the district has received more than its share of gloomy news of late, administrators are taking it on the chin--and bracing for more with the release of the auditors’ second report.

The first report “is an understatement, if anything,” said Nash, who added that he took the job knowing the district needed considerable attention. He said he put his initial energies into the academic rather than administrative side. “You’re talking about systemic problems that take time to work out. I’m here to solve problems. [But] I just got the report.”

The poor administration of finances in the district is one reason Inglewood teachers make an average of $32,500 a year, compared to a statewide average for teachers of $40,000, said California Teachers Assn. representative Jacques Bernier. He added, however, that Nash--who requested the audit--deserves credit for facing a problem that began long before his tenure.

Ted Witt, executive director of the California Assn. of School Business Officers, a group that trains school and community college business administrators, said there is plenty of blame to go around. “A whole range of people from the board to the business officer to the superintendent should have put in a multitude of checks and balances.”

Board of Education Vice President Larry Aubry said the board accepts responsibility for some of the problems. “We screwed up tremendously,” he said. “We [the board] should have been apprised of it, but there’s no way we can justify not having known. The buck stops with us.”

After the alleged bogus employee scheme came to light, the district’s assistant superintendent for business services, Kermet Dixson, was removed from her position and put on “special assignment,” according to district officials, who declined to elaborate. Dixson could not be reached for comment.

Fiscal and academic problems are nothing new to the 20-school, 16,000-student district, which long has posted some of the lowest test scores among South Bay school districts, though several of its elementary schools usually excel.

“A lot of the money that disappeared did come out during Dr. Nash’s reign,” said Kenneth Franklin, a math teacher at Monroe Junior High School. “But his hands are tied in many ways, because the things that have been going on are part of an intricate web that he’s had to cut through.”

Although Franklin and others say the district began faltering financially in the early 1990s, county educators first stepped in in 1993, installing Bertain as a financial advisor because of the administration and board’s “failure to follow through with prudent fiscal policies.”

The same day the county announced its plan to send in Bertain, the board voted 3-2 not to renew the contract of then-Supt. George J. McKenna III.

Nash, who was fired in 1990 from the superintendent job at the Centinela Valley Union High School District in Lawndale and who later settled a racial discrimination claim and two lawsuits with that district, stepped in. He promised a “look at every single aspect of this system.”

In September 1995, just weeks before officials would begin investigating Truesdale’s alleged scam, the American Assn. of School Administrators released a report based on a survey of the 1993-94 school year: Staff at Inglewood Unified suffered from low morale, many curricula were inadequate and instruction was rated poor.

Additionally, the report said, students in half of the district’s 12 elementary schools were falling below state and national standards in reading and language skills.

Then came the Fuller report.

Many district officials, teachers and board members, while agreeing that the problems are serious, said they hope the police investigation and the audit will be catalysts for change.

Sweeping improvements are needed, and soon, said Fuller & Co. President Leonard R. Fuller.

“The problems we identified are very serious . . . to the point of threatening the operational and financial survival of the district,” he said. “[They] pose an imminent threat.”