Poor Management Practices

Below, CABOC presents a collection of documents collected from a variety of sources regarding poor construction bond management practices that can lead to fraud, waste, and/or abuse.  They are sorted by the agency that is the subject of the report, presented in chronological order for each agency within the agencies presented in alphabetical order. General reports that involve multiple agencies are presented under the name of the sponsor or author of the report).  It should be recognized that some of these reports are of interest because they call out practices that should be avoided that occurred in the past, in some cases many years in the past, but it should not be assumed that nothing has changed since the original report or article.

Poor management practices can lead to fraud, waste, and abuse as defined below by the Comptroller General of the United States:

Abuse: Behavior that is deficient or improper when compared with behavior that a prudent person would consider reasonable and necessary business practice given the facts and circumstances, but excludes fraud and noncompliance with provisions of laws, regulations, contracts, and grant agreements.

Fraud: Involves obtaining something of value through willful misrepresentation. Whether an act is, in fact, fraud is determined through the judicial or other adjudicative system and is beyond auditors’ professional responsibility.

Waste: The act of using or expending resources carelessly, extravagantly, or to no purpose. Waste can include activities that do not include abuse and does not necessarily involve a violation of law.

Press/media articles, documents, and reports that provide examples of poor management practices are listed below in alphabetical order by government agency.

 DISTRICTS

District – (links to files)

County

Year

Type *

Source

Alum Rock Union Elementary School District

Santa Clara

2019

A

California State Auditor

Alum Rock Union Elementary School District

Santa Clara

2018

CGJ

County Civil Grand Jury

Alum Rock Union Elementary School District

Santa Clara

2017

A

FCMAT

Bassett Unified School District

Los Angeles

2019

L

Leal Trejo Attorneys At Law

Benicia Unified School District

Solano

2015-16

CGJ

County Civil Grand Jury

Cabrillo Community College District

San Mateo

2006-07

CGJ

County Civil Grand Jury

Contra Costa County Districts

Contra Costa

2012

CGJ

County Civil Grand Jury

Corona-Norco Unified School District

Riverside

2019

A

FCMAT

De Norte County Unified School District

Del Norte

2020

A

Wilkinson Hadley King Co. LLP , CPA

East Side Union High School District

Santa Clara

2003-04

CGJ

County Civil Grand Jury

El Rancho Unified School District

Los Angeles

2020

A

FCMAT

Fresno Unified School District

Fresno

2020

CD

Court of Appeals, Firth District

Grossmont Union High School District

San Diego

2013

CGJ

County Civil Grand Jury

Hermosa Beach City School District

Los Angeles

2006

CD

Court of Appeals, Second District

La Honda Pescadero Unified School District – complaint

San Mateo

2009

CF

San Mateo Superior Court

La Honda Pescadero Unified School District – reply

San Mateo

2009

CF

San Mateo Superior Court

Los Angeles Community College District

Los Angeles

2011

A

California State Controller

Montebello Unified School District

Los Angeles

2018

A

FCMAT

Montebello Unified School District

Los Angeles

2017

A

California State Auditor

Mt Diablo Unified School District

Mt. Diablo Unified School District

Contra Costa

Contra Costa

2021

2010-11

R

CGJ

FCMAT

County Civil Grand Jury

Oakland Unified School District

Alameda

2018-19

CGJ

County Civil Grand Jury

Pajaro Valley Unified School District

Santa Cruz

2017

CGJ

County Civil Grand Jury

Paso Robles Unified School District

San Luis Obispo

2020

CGJ

County Civil Grand Jury

San Diego Unified School District

San Diego

2013

CD

Court of Appeals, Fourth District

San Joaquin Delta College

Riverside

2008

A

California State Controller

San Mateo Community College District

San Mateo

2011

CGJ

County Civil Grand Jury

San Mateo County District

San Mateo

2009-10

CGJ

County Civil Grand Jury

San Ysidro School District

San Diego

2016

CGJ

County Civil Grand Jury

Solano Community College District

Solano

2014-15

CGJ

County Civil Grand Jury

South San Francisco Unified School District

San Mateo

2015

FE

Cossolias Wilson Dominguez Leavitt, CPA

Stockton Unified School District

Stockton Unified School District

Sweetwater Union High School District

San Joaquin

San Joaquin

San Diego

2022 

2022

2021

CGJ

R

SEC

San Joaquin County

FCMAT 

Securities and Exchange Commission

Sweetwater Union High School District

San Diego

2019

CD

Court of Appeals, Fourth District

Sweetwater Union High School District

San Diego

2020

A

FCMAT

Vista Unified School District

San Diego

2008

CD

Court of Appeals, Fourth District

West Contra Costa Unified School District

Contra Costa

2015

CGJ

County Civil Grand Jury

West Contra Costa USD
https://www.wccusd.net/domain/1723

Contra Costa

2016

FE

Vicenti, Lloyd & Stutzman LLP, CPA

* Type Key:

Key

Description

A

Audit

CGJ

Civil Grand Jury for a specific county

CD

Court decision

CF

Court filing

FE

Forensic Examination

L

R

Letter attorney

Review

SEC

Securities and Exchange Commission Order, United States of America

Debt Financing and Oversight Studies

Little Hoover Commission June 2009 Report, Bond Spending: Expanding & Enhancing Oversight.   PDF 

Little Hoover Commission February 2017 Report, Borrowed Money:Opportunities for Stronger Bond Oversight. PDF 

Audits of Public School Construction Program, A Literature Review, Office of the District of Columbia Auditor, July 1, 2015 PDF

Bond Clearing House, various articles on Proposition 39 bond oversight in California
Link to website: http://www.metrolinktrainriders.com/WVUSD/proposition-39.cfm

Cashing in on Education, California’s school bond system is dominated by well-funded private interests and plagued by a lack of oversight, Brian Krans, November 2, 2018   PDF 

Citizen Oversight of Public School Construction Programs, In Search of Promising Practice, 21st Century School Fund, February 12, 2003  PDF 

Debt financing and oversight including the use of capital appreciation bonds (CAB) and the Poway Unified School District story, a case study. https://www.bondoversight.org/wp-content/uploads/2022/08/calboccactt_2012.pdf

Department of General Services, the Division of the State Architect lacks enforcement authority and has weak oversight procedures, increasing the risk that school construction projects may be unsafe.  California State Auditor, December 2011.  PDF

How to Perform an Effective Performance Audit , Moss Adams, October 2021 PDF  

An FAQ on California’s Proposition 39 and How it Affects School Districts, Oct. 12, 2021   PDF

Financial and Performance Audit Requirements Under Proposition 39, Renee Graves, CPA, Vicenti, Lloyd & Stutzman LLP, May 7, 2015 PDF