Atascadero's finances focus of probe
By CLAUDIA MELÉNDEZ SALINAS
Herald Salinas Bureau
Posted: 07/14/2010 01:30:23 AM PDT
Updated: 07/14/2010 01:30:24 AM PDT
A recent San Luis Obispo County grand jury report cites a case of financial improprieties that has mostly gone unreported at a tiny school district in south Monterey County.
In a report issued in June, the grand jury criticized the hiring practices of Atascadero Unified School District for having promoted E.J. Rossi, former superintendent of the San Ardo Union School District, from assistant principal to principal of Atascadero High School.
The grand jury report chastised the Atascadero district for not thoroughly verifying Rossi's references and for ignoring allegations of financial impropriety made against him.
The report was prompted by complaints about misappropriation of funds for school activities at the high school, where Rossi remains principal.
The grand jury investigated the allegations, but could not find supporting documentation for the alleged misappropriation.
Rossi, who was at San Ardo from August 2003 through June 2007, was investigated for fiscal improprieties by the Monterey County Office of Education. Its analysis found he was paid more than $53,000 above what his contracts required.
At the request of Superintendent Nancy Kotowski, Monterey County's district attorney conducted a criminal investigation into the conduct of Rossi and San Ardo's former business manager, Julie Trescony (now Digges).
The investigation, which concluded in January 2009, found "significant and troubling concerns regarding the legitimacy of certain payments that Mr. Rossi and Ms. Trescony received while employed by the San Ardo Union School District."
But because of shoddy accounting practices, there was insufficient evidence to support a criminal prosecution, the report concluded.
In November, Rossi agreed to pay back $32,000 to San Ardo, without admitting any wrongdoing.
The financial irregularities were discovered by Carlos Vega, current superintendent at San Ardo, when he took over the 119-student district from Rossi in July 2007.
In May, Vega said shoddy accounting practices allowed overpayment to Rossi and his business manager. He discovered documentation for cash transactions missing and that equipment purchased by the district could not be located.
"At the time I began investigating, I only had two years of records," Vega said. "I met with the former superintendent (Rossi), shared with him my concerns, and he agreed he would pay $6,000 that he'd been overpaid."
But when an audit by the Monterey County Office of Education arrived, pointing to more than $50,000 in questionable expenditures, the San Ardo board of trustees turned down Rossi's offer to settle for $6,000 and returned to the negotiating table, Vega said.
In December 2007, Vega received a call from the Monterey County Office of Education announcing an "extraordinary" audit. That type of audit is conducted when there is reason to believe that fraud or misappropriation of funds have taken place.
Kotowski hired the School and College Legal Services of California to lead the investigation.
In July 2008, Kotowski made a presentation to the San Ardo board of trustees, informing them that the allegations were sent to the Monterey County district attorney.
"We cannot discuss nor share any findings that may have criminal implications at this time," Kotowski wrote in a letter dated July 16, 2008.
The District Attorney's Office concluded its investigation in January 2009, deciding there was not enough evidence to press criminal charges against Rossi or Digges. But Stephanie Hulsey, assistant district attorney, said San Ardo could still pursue civil remedies.
"They have a lesser burden of proof, and there were additional violations that may be pursued in civil court," Hulsey told The Herald last month.
The district began legal proceedings against Rossi before a settlement was reached.
The county's audit found Trescony was overpaid more than $8,000, and so far, only one offer to reimburse $500 has been made, Vega said.
"This is an exaggerated claim against Julie," said Digges' lawyer Michelle Welsh. "She had a contract that pre-existed this administration that was in effect while still employed there. After this superintendent came, he reinterpreted the contract that had money owed. This was not interpreted by the previous administration."
Rossi did not return phone messages from the Herald.
After agreeing to settle with San Ardo, Rossi was quoted in a San Luis Obispo media outlet saying, "I stand in the work that I've done, both here and in San Ardo and feel comfortable that based on the things that I have done I don't need to go into those details to justify it."
Claudia Melendez can be reached at 753-6755 or cmelendez@montereyherald.com.
http://www.montereyherald.com/local/ci_15512478?nclick_check=1
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