Interim Team to Rework L.A. Unified’s Finances

Los Angeles school officials on Thursday announced the appointment of an interim financial team that will be responsible for restructuring the district’s murky budget process so that Board of Education members and parents alike can see where the money comes from and where it goes.

Joseph P. Zeronian, a former business manager in the Pasadena and La Canada school districts and now an investment executive, will head the team as interim chief financial officer.

Corporate turnaround specialist Sanford Sigoloff, credited with leading Wickes Furniture out of bankruptcy but also reviled by some as “Ming the Merciless” because of the brutal nature of his work, will assist Zeronian as an unpaid advisor.

Completing the team will be a 24-member committee of financial experts and district and community representatives. William Ouchi, vice dean of the Anderson Graduate School of Management at UCLA and a sharp critic of the district’s outgoing administration, will head the committee.

The district’s new chief operating officer, Howard Miller, said the restructuring must “give confidence to every citizen of Los Angeles” by making the district’s $7.4-billion budget transparent and understandable.

Miller said he wants to make it possible for parents to look up their schools’ budgets on the Internet to learn how the money is being spent.

The district’s financial reporting system has been criticized for failing to make information accessible and for over-budgeting so that large amounts remain unspent at the end of each fiscal year.

An audit by the consultant Fuller & Co. concluded that the budgeting process “drives policy rather than policy driving the budget.”

Zeronian fills a vacancy created last week by the demotion of Chief Financial Officer Olonzo Woodfin to his former position of controller. Woodfin replaced Henry Jones, who retired in November 1998.

Miller demoted Woodfin the same day district auditor Don Mullinax criticized the district’s financial system for being unable to track the balance on the Belmont Learning Complex, leaving the district open to overpayments.

Miller said Zeronian would be paid $70,000 through June 30, a rate slightly less than half the current chief financial officer salary.

A graduate of Venice High School, Zeronian, 63, was deputy superintendent for business services in the Pasadena Unified School District from 1980 to 1984, under then-Supt. Ramon C. Cortines, who will become interim superintendent for Los Angeles schools on Jan. 16.

Zeronian succeeded Cortines as interim superintendent in Pasadena through 1985. He then went into the private sector as director of the Los Angeles office of Prudential Securities Inc. He is currently managing director of U.S. Bancorp Piper Jaffray in Torrance, and will be on loan to the district for his six-month term.

Sigoloff, 69, is chairman, president and chief executive officer of Sigoloff and Associates Inc., which specializes in restructuring troubled businesses. He teaches in the Anderson school at UCLA.

In an interview Thursday he said he did not know how much time he would be devoting to the district, but that he would have to “move around” his commitments to his own company.

Though his critics have used the Ming the Merciless tag to disparage Sigoloff, he adopted the nickname from the Flash Gordon comic strip.

During the resuscitation of Wickes, the nation’s largest furniture retailer, which had fallen $2 billion in debt, Sigoloff and his team each gave themselves nicknames from the science fiction story as a way to inject humor into an unpleasant situation of corporate downsizing.

Although Cortines has said he intends to reduce the size of the district’s central office, Sigoloff will focus on budget, finance and facilities issues, not downsizing, said a senior district official who spoke on condition of anonymity.

Ouchi, a close advisor of Mayor Richard Riordan, is a member of the board of the private reform group LEARN, which has promoted decentralization of budgeting decisions to the school level and has been a critic of the outgoing administration.

The advisory committee he assembled includes a variety of business, academic and community leaders including former Housing and Urban Development Secretary Henry Cisneros; John Mack, president of the Los Angeles Urban League; Robert Wycoff, president emeritus of Arco; and Guilbert Hentschke, dean of the USC Rossier School of Education Office.