Moving School Offices Was Justified, Audit Says

A state audit has concluded that the Los Angeles Unified School District’s decision to move its business services staff into a swank downtown office building four years ago appeared defendable in light of liability and safety concerns.

But the report by the California state auditor faulted the district for not obtaining an independent evaluation of information provided by its real estate broker.

“It is not prudent for a public agency to rely exclusively on someone who stands to benefit from a transaction,” state Auditor Kurt R. Sjoberg said.

The audit was prompted by criticism of the district for abandoning its former business services center, located in the 1400 block of South San Pedro Street, after the 1994 Northridge earthquake. The district relocated about 1,000 employees into the IBM Tower at 333 S. Grand Ave.

Engineering studies conducted after the earthquake concluded that the old Business Services Center--the heart of non-curricular operations ranging from food service to accounting--was “extremely vulnerable” to a moderate temblor.

Rather than pay up to an estimated $29 million to fix the aging building, the staff advised the Board of Education to declare an emergency and began searching for space. Spurred by a soft real estate market, 22 brokers descended on the district touting 37 buildings, including one at Los Angeles International Airport.

The audit concluded that the board made a reasonable decision in moving the business services center.

“Retrofitting while the employees stayed in the building was not a viable alternative because of the risk of injury or death should another earthquake occur,” the report said.

The need to move quickly and the district’s desire to keep its staff housed together limited its choices, the report added. Under the circumstances, the IBM building appeared to be the “most favorable alternative,” despite its cushy environment.

The auditor also criticized the district for failing to begin planning for its next move when the lease expires in 2002. The report was released last week.