Abuse, Fraud & Waste

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

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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