Higher Property Taxes Add Up to $3 Million More for SCUSD, Cabrillo Carnival Accounts Audit Finds No Malfeasance
About $3 million more will be flowing Santa Clara Unified School District’s way, thanks to an increase in local property tax assessments, reported the District’s acting Superintendent, Business Services Terry Ryland at last week’s school board meeting.
But the issue drawing most of the discussion about district finances was an audit of Cabrillo Middle School’s carnival money – one of about 40 separate Associated Student Body (ASB) accounts in the school. The event nets about $10,000 for the school.
The audit was driven, said Ryland’s report, by accusations of wrongdoing on the part of “the student organization and/or staff, hints of ‘hidden money,’ and issues regarding sharing proceeds [with the PTSA] from the carnival fundraising event.”
Ryland found no malfeasance and no hidden accounts. “The ASBs are audited annually and no irregularities have been found in the accounts,” she told the board. “For last two years, 50 percent of net proceeds were paid to the PTSA.”
She did advise that the district was on shaky ground with an arrangement whereby the carnival account (an ASB account) and the PTSA (an outside organization) either co-mingled funds in the same account, or the student account paid money to an outside group – both of which were prohibited by the state education code.
“It looks like an ASB activity,” she said. “If it was a PTA event then PTA should be collecting money…and have them write a 50 percent check back to student body. It’s the same financial transaction, but that looks cleaner.”
Audit A Fishing Expedition Targeting Cabrillo Administration?
The audit wasn’t precipitated by concerns about commingling funds, however. It was instigated by an email from former PTSA president who has said that he believed the PTSA was entitled to all the carnival proceeds, not just a portion. The precedent of the ASB account collecting the money – due to insurance requirements that couldn’t be satisfied by the PTSA – and sharing them with the PTSA was set years ago, and inherited by the current principal Stan Garber. There’s no evidence of any documented carnival profit-sharing agreement, according to Ryland’s report, and no current policy addressing such agreements.
In Feb. 2013, after consulting Trustee Christopher Stampolis, then PTSA President Kevin Farmer sent an email to the board (copying the County Office of Education) asking it to “discuss and possibly take action regarding” a specific Cabrillo checking account adding that “the public needs to know the details of this hidden account.” Farmer also included a photo of the check that clearly shows the Cabrillo name and account number.
At a subsequent board meeting, Stampolis distributed copies of Farmer’s email, explaining that this was public correspondence received by the board. Farmer subsequently retracted the email at a March 2013 Cabrillo PTSA meeting, according to people who attended the meeting, and said that Stampolis wrote the email for him.
Despite Ryland’s analysis, Stampolis and Trustee Ina Bendis continued to fish for evidence of misdoing.
“I just wanted to clarify,” began Stampolis. “It looks like definitely there was definitely some commingling and that was inappropriate. Fundraising requires governing board approval.” Did you, he asked Ryland, find that the board had approved the carnival?
“I did try to include policy on school activities [in the audit] and I didn’t find anything except something from 1960,” she replied.
“Are principals on their own able to enter into financial contracts on behalf of school district,” asked Stampolis.
“Principals aren’t usually allowed to sign contracts on behalf of the district,” she answered. “However, [for] ASBs, the principal is typically the authorized district representative to sign on behalf of the student body.”
“What I understand you to say is that if there’s a contract between outside entity and the school site it’s different from a contract between the ASB and the outside entity,” Bendis jumped in. “So what we have is a contract, we have the school site that isn’t the ASB that entered the contract between the school site and the PTSA. Is that what the contract says?
“So what we have here then, is a contract on behalf of the school site – that means the district – to give money to PTSA,” she continued. “And that contract on behalf of the school site – i.e. the district – is signed solely by the principal To me that’s a problem…I believe that this was a contract that was entered into improperly by the principal of the school….Would you agree with everything I just said?”
Without pausing to let Ryland answer, she went on. “I understand that in 2002 or later the entity that entered into the contract with Butler [ride provider] was the PTSA…and that the PTSA was agreeing to provide the site and the PTSA didn’t have any authority to enter into any contracts with SCUSD…The other thing that I saw documented on SCUSD letterhead, repeatedly year after year, that this was referred to, and advertised as, the PTSA’s carnival. It was not advertised as the ASB’s carnival. At some point that changed and I don’t know when that changed. If an activity is going to support an entity X,” she concluded, “it shouldn’t be advertised as supporting entity Y.”
The entire proceeding didn’t belong in a public meeting, said Trustee Andy Ratermann. “In my opinion our employees’ due process rights been violated,” he said, noting that the entire business set a precedent of board interference that was “chilling” for people whose only interest was students.
“The original allegation was there was a hidden account with malfeasance,” he continued. “That’s not true. This is something that should not be done in this forum. Mr. Stampolis, you came to a meeting with a big stack of letters that had been sent to the county board [accusing Stan Garber and Cabrillo bookkeeper of fraud] and distributed them to everyone.” Whether the money went to the PTA or the ASB, was hardly a matter demanding an inquisition, Ratermann said, because in either case the money went to student programs. “We need to have policies in place so that this doesn’t happen again.”
In the end, Stampolis apologized to the Cabrillo bookkeeper, if the episode had placed undue suspicion on her. He said nothing about suspicions directed at Garber.
Board Continues its District Policy Update
The board continues to update its policies, and last week continued discussions on the 1000 series (Community Relations) and 5000 series (Students). Bendis continued her long-standing opposition to including a civility clause. Earlier this year, she objected on the grounds that this opened up lawsuit opportunities if someone disliked something a board member said. Now her objections are that the clause is in the wrong place, and is, further, not something that is uniformly found in school board policies.
In 2010, Bendis’ behavior provoked an employee harassment complaint against the district. The board reprimanded Bendis, noting that her behavior at that time created a negative work environment and contentious atmosphere among board members.
Bendis has long opposed “civility” policies. In a 2009 email to former Superintendent Steve Stavis and then board president Pat Flot, she described a proposal before the board about trustee behavior as “unconstitutional.” (In the same email, she threatened to campaign against a parcel tax on the ballot unless the proposal was withdrawn).
Board Meetings Return to SCUSD District Office
In other news, SCUSD board meetings move back into the district Board Room starting with the Oct. 10 meeting. Recent meetings have been scheduled to start at 7:00 p.m. – instead of 6:30 – but recent public sessions have started closer to 8:00, as a result of closed sessions running overtime. It’s unknown whether this is due to contentious discussions, or an over-abundance of closed session topics – these include personnel matters, labor contracts, lawsuits, and expulsions.
Board policies can be found at www.santaclarausd.org/overview.cfm?subpage=145139, in the upper left menu.