By Sharon Noguchi
snoguchi@mercurynews.com
Posted: 06/28/2011 06:11:13 PM PDT
Updated: 06/29/2011 02:43:26 PM PDT
The East Side Union High School District has dragged its heels in putting its financial house in order, the Santa Clara County Civil Grand Jury found.
In a concise report issued this month, the jury criticized the 25,000-student district for not completely complying with state recommendations to tighten fiscal controls, particularly those over construction contracts.
"We felt that 18 months was an awful long time to correct some of the issues," jury forewoman Helene Popenhager of San Martin said.
Those issues had been highlighted in a January 2010 state audit that found East Side awarded multiple no-bid contracts, rehired ex-employees without requiring conflict-of-interest statements and lacked sufficient documentation to judge allegations of wrongdoing.
School officials seemed taken aback by the grand jury report. "I don't think we were slow in responding," board President Lan Nguyen said. "We've been very serious." He pointed out that the board hired an internal auditor to look at finances and controls.
Superintendent Dan Moser said that the grand jury report is not accurate. "It's based on information from February," he said, pointing out that the district has made progress since then. "The district responded to all the concerns."
But five of 21 recommendations requested by the state remain outstanding, according to Nimrat Johal of the Santa Clara County Office of Education. The office, which had requested the state audit, oversees the district's compliance with the recommendations.
"The district has been definitely trying," she said, but, "at this point, a satisfactory response has not been provided."
Among the missing items are conflict-of-interest statements, policies requiring that services worth more than $5,000 be put out to bid and assurances that when the district contracts for work, it pays only that contractor and not third parties instead.
For 10 years, East Side has been criticized in periodic state audits for weak controls on spending.
The 2010 audit, by the state's Fiscal Crisis and Management Assistance Team, had been triggered by anonymous allegations of wrongdoing at the district. That same audit cleared former Superintendent Bob Nuñez of fraud and illegal practices. Nuñez resigned from the district in October 2009.
In the wake of the state audit, which cost $47,800, East Side was supposed to have tightened its fiscal controls.
The district has complied with most of the state's recommendations. Among those was ensuring that it was spending money from voter-approved bonds for permissible uses, getting contract extensions and purchase orders approved by the board, and setting policies on the superintendent's vacation.
The board has until September to submit a response to the grand jury.
Contact Sharon Noguchi at 408-271-3775
http://www.mercurynews.com/ci_18372024?source=most_emailed.
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