Bright Light on BB School Funds

Given the careless state of financial controls in the Los Angeles Unified School District, it is hardly surprising there are questions about some of the spending of Proposition BB school bond funds.

Don Mullinax, the tough former Defense Department auditor brought in to look at school spending, has issued two scathing reports on district management and the fiscally disastrous Belmont Learning Complex deal. His next target, at the behest of district Chief Operating Officer Howard Miller, is the $2.4-billion Proposition BB school repair and construction program.

The questions being asked are pretty simple: Have the program manager, 3D/I-O’Brien Kreitzberg, and its project managers been paid 19.2% of the total $386 million in BB funds spent so far--which would be a very high percentage for construction management fees? And have contractors overbilled as much as 10%? So far, BB funds have gone primarily for repairs and refurbishing of existing campuses because the district’s construction program is a shambles.

Steve Soboroff, the head of the committee appointed to independently oversee Proposition BB spending, agrees there should be questions but looks to the BB committee’s ongoing audits for answers. He says construction management fees are running 2.3%, slightly higher than the industry norm, as BB spending gears up.

The committee, however, should welcome the Mullinax audit. The only way to remove the cloud that hangs over school district spending is to account for every dollar. Good independent audits are cheaper than lawsuits and help build public confidence.

None of the local school bond funds have been spent on the construction of the Belmont high school. The independent committee did its job and rightly refused to release BB money for the project. But the lessons of Belmont should invite top-down financial reform and inspire extra vigilance in all public spending, including expenditures under the school bond measure. Miller has made the right call to reassure taxpayers.