School District’s $1 million oversight fuels bickering

Manhattan Beach Unified School District officials have acknowledged $1 million in spending related to wireless technology and a was incorrectly assigned, igniting a furor in the community and confirming long-held suspicions by the teachers union.

School District’s  million oversight fuels bickering

Last year, two dozen teachers were and the union denied salary increases because of a projected $2 million budget deficit. The teachers union had questioned the iPad program’s funding since its launch in 2012, given the district’s financial circumstances. School district administrators at the time maintained that the program, which equipped every middle-school student with an iPad, did not affect the fund from which teachers are compensated.

Superintendent Mike Matthews said in March that the iPads were paid for by grants and parents purchasing the tablet for their own children.

On April 14, Matthews sent a district-wide letter explaining what he described as an accounting oversight in spending related to upgrades in wireless infrastructure, which the teachers union considers to be iPad-related. About $743,000 in wireless expenditures that should have been paid from a special reserve fund for capital outlay projects and a capital facilities fund were “erroneously assigned” to the general fund, he wrote. Further review found additional items, not related to wireless or iPads, mistakenly assigned to the general fund. In total, this oversight depleted the general fund by $1.03 million, he wrote.

“Our teachers union has been asking about some of these expenditures,” Matthews wrote, “but before this point, we did not see the discrepancy.”

The Manhattan Beach Unified Teacher’s Association filed a complaint against the district with the Public Employment Relations Board last April for failure to provide documentation related to iPad expenses and related costs, which were requested since the program’s implementation in 2012. In October, PERB issued a formal complaint against the district. The case will be presented to an administrative law judge for a ruling in May.

In an interview, Matthews explained that wireless expenditures are not necessarily tied to the iPad program. Around the time the program was launched, the board approved $341,580 from the general fund and an additional $84,000 from an unspecified source for a districtwide upgrade in wireless infrastructure.

“Certainly the iPad [program] benefited from it, but any technology we used had to be updated,” he said. “We had a 12 megabyte-per-second Internet that was incredibly slow and unable to meet our needs. We needed to upgrade, with or without iPads.”

About 150 people attended the special board meeting on April 23, many skeptical of the district’s official response to the discrepancy.

Tensions ran high as teachers, parents and students stood before the board one after another expressing their distrust of district administration. Some speakers insinuated that Matthews and Deputy Superintendent Rick Bagley had intentionally understated the general fund to gain leverage during teacher salary negotiations. Others questioned their competence, incredulous that an accounting oversight of that size went unnoticed for two years.

“If I made a $1 million accounting error, I would be out of a job,” said Jamie York, whose husband, Tim Hirsh, is a French teacher at Mira Costa High School. Hirsch was among those who was told last year his job was cut; a majority of the layoff notices a few months later.

Bagley took responsibility for the error. He said it stemmed from a change in a budgetary process he created after joining the district in September 2011. Under the old system, he explained, the board approved expenditures prior to designating which funds they would come out of. His new process chains each expenditure to a funding source in an effort, “ironically, to create more transparency,” he said.

“Again I want to point to the fact that no money was lost, no money was found, no money was taken, no money was transferred –we’re talking about expenditures that were assigned to the wrong account,” Bagley said. “We found it, we have taken steps to correct it … Our hope is that we can learn from this, grow from this and do a better job going forward.”

But one by one, as Bagley spoke, signs reading Trust – You Have Lost It popped up in the audience.

Attendees hold up their signs in protest as administrators explain the accounting oversight. Photo by Esther Kang

One parent pointed to the board’s upcoming negotiations with the teachers union on Friday as an opportunity to rectify the oversight, and in turn, teacher salaries.

“We all are here feeling for the teachers,” she said. “Now that it’s clear that the deficit in the general fund made them negotiate in a different way. What are you going to do to rectify that?”

The school board was largely silent on the matter. Board member Ellen Rosenberg proposed forming a committee, comprised of board members and people from the community, to provide oversight in the budget process. Board member Christine Cronin-Hurst said she is meeting with an auditor next week to examine all the line items in light of this discrepancy.

Pennekamp Elementary parent Kim Leserman said the administration’s breach of trust is irreversible. She called for Matthews’ resignation, prompting applause from some audience members. “I cannot look over the fact that … our lead administrators in this district, when told it existed by teachers over and over and over again, didn’t go look and fix it before your back was against the wall,” she said. “I as a parent and all the teachers in this district have lost trust.”

Charlie Chen, a parent of three kids in the district, asked whether the misallocation of the general fund would have come to light without MBUTA’s legal pursuit with PERB. If the teachers union had not urged the administration to restudy the line items, would the $1.03 million oversight have flown under the radar?

“Correct,” Matthews said.

In a unanimous vote, board members approved the motion to reinstate the 2013-14 beginning fund balances for the general fund and special capital funds. With the addition of $1.03 million to the general fund, the beginning fund balance now stands at $13.3 million.      (Read the story here)

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