County Halts Inglewood School Workers’ Planned Raise

Signaling more trouble for the beleaguered Inglewood Unified School District, county education officials have put the brakes on a planned pay raise for nonteaching employees and ordered a review of the district’s finances next month after a county audit raised concerns about the district’s accounting methods.

The move comes just six months after the county approved the district’s $100-million budget and said the district, which narrowly averted a state takeover in 1993, was on the road to fiscal recovery. Additionally, the financial picture painted by the district in its own recent audit showed positive account balances with a reserve above the 3% required by the state.

The recent county review, however, throws the report into question and raises the specter of possible insolvency.

Los Angeles County Office of Education officials have directed district officials to halt a planned 6% pay increase that had been bitterly negotiated for the district’s 650 nonteaching employees. A tentative agreement was reached April 3, but a final board approval vote due for last week was pulled from the agenda.

The directive may also affect the divided school board’s attempt to buy out the contract of former district Supt. McKinley Nash, who was fired earlier this month. Nash has a $103,000-a-year contract through the end of the 1997-98 school year.

“The county is extremely concerned about the district’s ability to incur additional contractual liabilities or any other pending significant expenditures at this time,” wrote Ken Shelton, assistant superintendent of business services for the county, in a letter addressed to school board President Gloria Gray late last week.

“All areas of the district’s finances are potentially in question, including revenues, inventory, payroll, accounts payable, cash, fund balances and average daily attendance.”

Shelton called the situation the “highest priority” of the county office, which has given only four of the county’s 81 school districts qualified interim status. He said that if the discrepancies over the district’s revenue and expenditures are not resolved, the district could face insolvency.

Though the district’s 1996-97 budget was approved in October, Shelton said the district still had to work through some budget overruns in its modernization, cafeteria, child development and adult education funds. He said questions arose in January when Inglewood’s interim report, which all school districts must file twice annually and three times if they have a qualified budget status, sent up a red flag because it was unclear whether the district could cover its costs.

“It could be extremely severe, or our worst fears could be unfounded and we may find that there was an accounting error,” Shelton said. “It all depends on the analysis.”

In addition to reviewing the books, Shelton said officials will evaluate the district’s attendance figures, which are used to determine how much state aid each school receives. A recent review of the 1995-96 budget reflected poor attendance accounting practices, calling the current figures into question.

Inglewood officials said they are deeply troubled that the budget crisis may force them into insolvency. They said the implications that the county has made have led them to believe that the district is in big financial trouble.

“The district going into receivership is a great concern,” Gray said. “This didn’t happen overnight, and we don’t understand what happened to get us to this very critical point.”

The Inglewood school system has long had financial problems. In 1993 Richard Bertain was sent in as a county-appointed fiscal advisor for two years.

Bertain was retained by the district as a private consultant and later hired as the assistant superintendent of business services. He was appointed acting superintendent April 5 when Supt. Nash was fired after a controversial three-year tenure.

Though Bertain declined to comment, a scathing letter he wrote to the district’s accounting firm April 18 expresses grave concern about what he feels was a deficient district audit, citing several discrepancies, including a $6-million general fund balance that was actually only $3,621.

Bertain wrote the letter after the private firm refused to certify its numbers to the county, arguing that Inglewood did not maintain customary accounting records and that its system of internal control is not adequate to provide proper recording of transactions. Shelton said he has never before seen an auditing firm disclaim an audit performed for a school district.

“No doubt such errors create a distorted picture of the district’s financial condition to the individuals and agencies to whom you provided this financial report,” Bertain’s letter to the accounting firm said. “This obviously greatly disturbs us here in Inglewood.”

Nonteaching employees are angered at the impact the budget crisis will have on their expected raises, estimated to cost the district $200,000 annually. Though teachers received a 6% raise in February, it is unclear whether the financial situation could have an impact on that pay increase too.

“We’ve been promised over and over that we would get this raise and hope the district follows through,” said Chris Graeber, business representative for California Professional Employees, the union representing nonteaching employees.