PASO ROBLES — The San Luis Obispo County Grand Jury released Tuesday, Nov. 17, its report on the Paso Robles Joint Unified School District’s most recent financial crisis.
The report titled, “Paso Robles School District: A Cautionary Tale,” harshly criticizes district administration, specifically former Superintendent Chris Williams, school board trustees and the SLO County Board of Education.
“The PRJUSD administration, the Board of Trustees and the County Board of Education failed to fulfill their obligations, learn from previous mistakes, and balance vision with pragmatism, ultimately offering a cautionary tale and guidance for school districts throughout the county,” the report states.
PRJUSD stated the 28-page SLO County Grand Jury report corroborates many of the District’s internal investigation findings shared with the public on Sept. 18, 2019.
“As previously acknowledged by the district, there are many documented examples of unwise and excessive expenditures which show that proper practices and procedures to ensure adequate Board oversight were either not in place or not followed,” District officials stated in a press release Tuesday afternoon. “The new administration and current Board have addressed these issues in the last two years, and the Board and administration will continue to develop improved policies and practices.”
PRJUSD said the past failures were “inexcusable.”
“Steps have been taken to rectify the problems and the District welcomes the recommendations of the Grand Jury as the new Board to be seated Dec. 15 begins its work,” PRJUSD officials stated.
The current Board will be reviewing the findings and providing any additional background to assist the District with its response to those findings and with insight on additional reforms based on the recommendations.
The SLO County Grand Jury stated this report was self-generated, following the financial woes the District was in after the 2017-2018 budget cycle.
The District’s reserves were 10.4% or $6,051,333 when Superintendent Williams was hired in 2014 by trustees to revitalize the school district with exciting new programs.
“Between 2015 and 2019, nearly $6 million in reserve funds were depleted,” the report stated. “This was primarily due to administrative and accounting errors, poor fiscal planning, and improper management guidance.”
Williams abruptly resigned in December of 2018.
The Grand Jury’s report was broken up into three chapters — School District Leadership; District Reserve Management; and The Aquatic Complex. The report provided a conclusion at the end of each chapter.
Under Leadership, the report broke down the roles of the superintendent, school board trustees and the County Board of Education. The Grand Jury concluded that all three were derelict in their duties and that other school districts should note.
“This trifecta of abdication or dereliction of duties, mismanagement and leadership failure was evident in hearing from individuals and reviewing the documents requested by the Grand Jury in search for the truth of just what happened in Paso Robles,” the report stated. “The circle of blame is a large one that offers a cautionary tale from which every school district can benefit.”
Reserve Management looked at what led to PRJUSD reserves’ depletion for the second time in a decade.
The vast majority of funding for public school districts like PRJUSD comes from the State of California and is based on Average Daily Attendance (ADA). A district’s ADA is projected at the beginning of the year and reconciled at the end of the year. Reserves can close the gap between differences in projected and actual ADA.
During the 2016-17 and 2017-18 fiscal years, PRJUSD input its ADA incorrectly. This error was based on untrained personnel using an incorrect formula to report and calculate attendance and led to $1,014,024 being taken from reserves.
Miscalculated ADA was one of seven issues that led to the depletion of the reserve. Other notable areas included in the report were: improper transportation costs calculations; errors in accounts payable administration; insufficient planning for pension and salary increases; and failure to consider true costs of new programs and headcounts.
The report points out that there were more areas than the seven listed that contributed to the District’s financial problems.
The Grand Jury concluded that Superintendent Williams was to blame for the reserve issues.
“In retrospect, the PRJUSD between 2014 and 2018, the Superintendent had a grand vision on how to improve the district,” the report stated. “His decision to deliver this grand plan, regardless of the financial impact, cost the school district millions of dollars in reduced financial reserves.”
The Grand Jury used the Aquatic Complex as an example of “how the administration of the Paso Robles Joint Unified School District (PRJUSD) erred and created financial blunders that impacted the entire district operation.” The complex has not been built.
In 2015, Superintendent Williams began compiling a Facilities Master Plan. In April of 2016, the facilities master plan was presented to trustees and included a $10 million aquatic complex.
After some reworking, trustees approved the facilities master plan — the cost of the aquatics plan was cut nearly in half — and moved forward with placing a $95 million bond on the November 2016 ballot. Measure M passed with 57% percent of the vote.
A Measure M citizens oversight committee was formed and they were required to publish yearly audits. The last audit was completed in 2018.
In January of 2018, trustees approved the purchase and delivery of components for two stainless steel pools for $945,200. The price was higher than the Measure M designated cost.
In February of 2018, Superintendent Williams and other district officials posed for pictures in a simulated groundbreaking photo opportunity at the proposed aquatics complex site.
In November of 2018, the District presented an update of the facilities master plan, including the aquatic complex. The District opened bidding for the installation of the complex at that time.
The bids from two contractors came in at $11 million and $12.7 million and were announced at a January 2019 school board meeting. They were substantially over the original estimate and the remaining bond funding set aside for the aquatic complex.
Trustees voted at that time to put the project on hold until additional funding could be secured.
“The Paso Robles School Board of Trustees and the previous superintendent prematurely purchased pool components and committed to an aquatic complex without a fully developed plan and a way to pay for it,” the Grand Jury concluded. “As a result of the trustees’ actions, Measure M, as authorized by the voters, has funded expenses of $1.5 million for an aquatic complex, which is unlikely to be realized. This includes almost a million dollars-worth of pool components, which require additional funding to maintain while stored in metal containers, potentially degrading.”
The Grand Jury report included 24 findings and 16 recommendations. PRJUSD, school board trustees and the County Office of Education have 90 days to respond to the report’s recommendations.
The entire SLO County Grand Jury’s Report can be read here.