The San Luis Obispo County Grand Jury says failures in leadership and management resulted in the Paso Robles Joint Unified School District's latest financial crisis.
It's the second time the Grand Jury has investigated the school district due to financial issues. The first time was in 2012.
This time, the Grand Jury looked at the financial problems that developed at the district between 2015 and 2018.
At the beginning of the 2015/16 fiscal year, the district's budget reserves were at 10.4%, well above the state's mandatory 3% requirement for reserves, according to the Grand Jury report. But by the end of the 2017/18 fiscal year, the reserves had fallen to 0.39%.
The Grand Jury identified seven specific areas that it says led to the depleted reserves:
- Miscalculated average daily attendance
- Improper transportation cost calculations
- Disallowed food service expenditures
- Errors in accounts payable administration
- Insufficient planning for pension and salary increases
- Unplanned and unbudgeted legal settlements and fees
- Failure to consider the true costs of new programs and headcount
The Grand Jury specifically calls out the school district's then-superintendent, the Board of Trustees, and the County Board of Education for failing "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."
"Their collective failures to control or report on excessive expenditures created a fiscal crisis that will take time and hard work to resolve," the report says. "The previous superintendent's leadership is responsible for overestimating income and not controlling spending... trustees approved expenditures in excess of available funds without sufficient questioning. And finally, the limitations in the SLOCOE oversight procedures prevented the County from officially intervening in the district's deficit spending pattern."
The Grand Jury also took a close look at the district's Aquatics Complex plan, which was supposed to include two pools, bleacher seating, changing rooms, a concession area, and more. It was supposed to be built at Paso Robles High School and parts for the pools were delivered there in 2018. As of 2020, it has yet to be constructed, parts remain in storage, and the project is lacking funding.
The Paso Robles Joint Unified School District responded to the Grand Jury's report in a statement Tuesday, saying:
"The County Grand Jury release today titled, "Paso Robles School District: A Cautionary Tale" corroborates many of the findings of the district's own internal investigation as shared with the public September 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. 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.
The past failures are 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 December 15 begins its work. 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 newly-elected Board will build on the work already done and the input of the current Board to complete a response to the recommendations at a special meeting within ninety (90) days, as required by the Grand Jury. All discussions of this matter will be conducted in public as we strive to build renewed trust in our school district."
