The Montebello school district is in dire straits — at risk of insolvency and under apparent criminal investigation.
An outside audit in July found some teachers earning more than $200,000 a year, as well as improper raises, excess paid vacation time and inappropriate overtime, sick leave and car allowances.
Fixing the district and pinpointing blame could take time.
The auditors held a broad swath of district leadership responsible. But last month, a Los Angeles County civil jury specifically faulted the school board for firing two former superintendents who said they tried to root out corruption. The jury awarded Susanna Contreras Smith and Cleve Pell a combined $3.7 million.
The district’s financial problems are among the worst in L.A. County, perhaps second only to Inglewood, which the state took over. The county education office now has partial control over Montebello, which serves more than 26,000 students.
“Montebello is a lesson in lack of accountability,” said Alex Johnson, a member of that office’s governing board.
Montebello officials apparently ran through a $30-million reserve during a time when the district could have been stabilizing its finances. Although the district’s state funding had been hurt by declining enrollment, the school system was receiving more money per student thanks to a new funding formula aimed at helping districts with high numbers of low-income families. Voters also had passed a $300-million bond issue in 2016 to fix and modernize campuses.
The recent court case focused on 2015 and 2016, when Contreras Smith was superintendent and Pell, who had previously been superintendent, was chief financial and operations officer.
As laid out in court, Contreras Smith and Pell began to have concerns about Ruben J. Rojas, who joined Montebello Unified as chief business officer in June 2015.
In September 2016, Pell wrote to the school board that an internal investigation had found that Rojas had forged his letters of recommendation and made false statements on his employment application. He urged the board to put the chief business officer on administrative leave.
Later that month, after the school board declined to take action, Contreras Smith used her own authority to place Rojas on leave, said her attorney, David M. Stein.
The next month, the school board reinstated Rojas and then placed Contreras Smith and Pell on leave. In November, the board fired the pair.
Matthew Umhofer, who represented Pell, argued that the school board wanted to protect Rojas because he was willing to steer business toward favored contractors, especially after voters passed a $300-million school bond in June 2016.
About the same time, the school board authorized or permitted the dismissals of two other parties who raised concerns: a longtime attorney for the school system and the district’s auditing firm.
The school board eventually fired Rojas for undisclosed reasons in 2017 after the Los Cerritos Community News published articles about his job application.
In his testimony at the recent trial, Rojas, who could not be reached by phone or email, denied any impropriety and accused opposing attorneys of presenting evidence that was misleading and out of context. He said Contreras Smith and Pell had worked hard to recruit him to the district and characterized himself as a force for reform, who eventually became a threat to the old guard.
After the trial, the district’s attorney, Daniel R. Shinoff, said the verdict was “based on spin and innuendo, not evidence.”
A district statement called the decision to “part ways” with Pell and Contreras Smith “lawful and performance based” given that the school system was on the verge of bankruptcy, its buildings in disrepair and test scores dropping. The statement mentioned the recent audits, saying that “fraud, mismanagement and misappropriation of the district’s funds and assets may have occurred during the tenure of the former superintendents.”
Outside auditors did, in fact, allude to Pell as one party under suspicion for possible wrongdoing or mismanagement. But the recent audit — and one from last year — seemed to fault all or most of the senior leadership as well as the entire school board.
Pell, a 50-year district employee, said he felt personally vindicated by the jury’s decision.
“But I’m still sad for the students, parents and teachers,” he said. “The people who did this to me are still in power, the contractors involved are still there, and the students, parents, and teachers still don’t have the leadership the district needs to right the ship.”