District’s Woes Blamed on Lax Oversight of Official

Embattled former Bay Area schools chief J.L. Handy may have run the little Emeryville school district into the ground, but he didn’t do it alone, the Alameda County Grand Jury declared Monday.

The grand jury report says the onetime Compton school official, now facing criminal charges over his spending practices in Northern California, was abetted by a lax educational establishment that failed to supervise Handy and protect the finances of the 900-student East Bay district.

Alameda County’s education office “bears responsibility for this debacle,” said the 16-page advisory report to county supervisors and other agencies. “It did not take timely action” and “did not react to the warning signals that financial controls and procedures were lacking” in the Emery Unified School District.

Handy resigned in September after seven years as superintendent of schools. He has since been charged with two counts of theft of public funds and one count of violating state conflict of interest laws, all felonies.

Handy is accused of using a district credit card and expense account for $65,000 in personal expenditures for car repairs, luggage and trips to Southern California. The conflict of interest charge stems from allegations that he steered $200,000 in school grant applications to a woman with whom he shares a Laguna Hills home.

Handy’s attorney, Harold Rosenthal, has denied the charges. “I haven’t seen the report,” he said Monday, “but from what I understand there’s nothing there that indicates Dr. Handy engaged in any criminal conduct.”

Emery is the second school district to topple toward insolvency under Handy’s guidance. He was fired nine years ago as superintendent of Compton’s schools amid allegations of financial mismanagement that piled up millions of dollars in debts. Compton was the first California school district to be taken over by the state.

Alameda County’s financial crisis team now projects the Emery district’s deficit to be $2.3 million, a third of what the blue-collar district next to Oakland spends each year to operate one elementary school, a middle school and a high school.

The document on Emery is part of the 2000-01 grand jury’s year-end report. Jurors asked for formal responses to their findings from the Emery school board, the county superintendent of schools and Board of Education, and the Board of Supervisors.

According to the report prepared by the grand jury’s seven-member education committee, deficit spending began almost immediately after Handy was hired before the 1993-94 school year.

The report portrays a district that not only spent too much but fell into disarray. Even routine records were kept so poorly that meeting announcements and school board agendas were difficult to find during his tenure.

Records were so incomplete it was difficult to determine how large a deficit the district was running.

Only making things worse, the five-member school board disbanded its finance committee. “Dr. Handy effectively usurped the role of the [school board] and controlled the operations of the district,” said the report.

Despite this sweeping indictment of Handy, the grand jury faulted both the local school board and the county’s office of education for not watching Handy more closely.

Sheila Jordan, the county superintendent of schools, objected, saying that the grand jury was improperly trying to shift responsibility for the problems in Emeryville to her. “The county office was not established to be fraud investigators,” she said.

“We were doing our job,” she said. “We were doing it well.”

Jordan said her office worked closely with Emery to address the problems once she realized that the district was in trouble. But there is only so much she could do, she said.

Although the grand jury recommended that Jordan should have urged Handy’s dismissal, she said, “it would be very inappropriate” for her to tell an elected school board who they should hire and fire--even a board that was floundering.

Two board members in the Emery district have resigned and others face an August recall election.

With Handy’s departure, the district is making progress, Jordan said. “This district is on its way to recovery,” she said. “I’m interested in having Emery survive.”