State investigators studying Stockton Unified School District finances are looking to see if recent purchases, contracts and other financial decisions weren’t just ill-advised but illegal.
The San Joaquin County Office of Education hired these financial detectives in February after it deemed allegations of fraud within SUSD to be credible. At the same time, the county’s Civil Grand Jury investigated SUSD. The grand jury released its second-consecutive unfavorable report about Stockton’s largest school district in June. Its report indicated the district faces a $30 million deficit within two years.
The state’s Financial Crisis & Management Assistance Team (FCMAT) investigators out of Bakersfield took the case.
This is not the first time FCMAT has studied SUSD’s fiscal policies. Much of the grand jury’s most-recent report focused on the findings of a previous FCMAT investigation.
But that was a regular, yearly audit that all school districts undergo. This “extraordinary” audit is quite different.
“In those regular audits you aren’t looking for fraud although you might find it,” said Mike Fine, FCMAT’s chief executive officer. “In this audit, we’re specifically looking for it.”
Fine said they expect to find it. In more than 90 percent of the extraordinary audits FCMAT has performed in the past five years, cases could be made for fraud, misappropriation of funds, or other illegal uses of public money.
“It isn’t 100 percent, but it’s close,” he said. “By the time these allegations get to us, they’ve been fairly well vetted.”
The investigatory process takes money and time. The price tag for an audit of this magnitude can reach $250,000, Fine said. Ultimately, the California Department of Education will pay for it. Auditors may spend a year or more performing all the needed inquiries before FCMAT releases its findings to SUSD, the county school’s office and, by law, the San Joaquin County District Attorney’s office.
District Attorney Tori Verber-Salazar said she looks forward to reading the audit report. If it gets to her desk before she leaves office in January and crimes rise to the level that she can prosecute, Verber-Salazar said her office would do so.
“As long as we have the evidence to do so beyond a reasonable doubt, I guarantee you we will work relentlessly on this,” she said. “We will fully hold anybody accountable that steals money from children.”
Attempts to contact Stockton Unified School District officials and San Joaquin County District Attorney-elect Ron Freitas for comment were unsuccessful.