An independent audit of the Stockton Unified School District released February 14 found “sufficient evidence to demonstrate that fraud, misappropriation of funds and/or assets, or other illegal fiscal practices may have occurred in the specific areas reviewed.”
“Auditors portrayed a system consumed with internal discord that ignored basic rules of financial management and squandered millions of dollars on questionable no-bid contracts – money that should have been used to improve the education of 34,000 overwhelmingly poor students,” CalMatters columnist Dan Walters noted.
The audit was conducted by the state’s Fiscal Crisis and Management Assistance Team (FCMAT) pursuant to a February 2022 request by the San Joaquin County Office of Education.
The findings “should be of great concern to the Stockton Unified School District and the San Joaquin County Office of Education and require immediate intervention to limit the risk of fraud, mismanagement and/or misappropriation of assets, or other illegal fiscal practices in the future,” the audit stated.
Walters noted that the audit “found dozens of instances in which money was paid to outside contractors without competitive bidding and/or in violation of the district’s own policies.”
The focus of the audit was a $6.6 million contract, issued to Alliance Building Solutions in 2021, for a system to disinfect schools through the use of ultraviolet rays.
“One of the district’s trustees, Scot McBrian, arranged a meeting of district officials with the company at a private party hosted by Stockton’s former mayor, Anthony Silva, and advocated the adoption of its system,” Walters wrote. “From that initial contact, FCMAT says, the district – without ever determining a need for disinfection – went through several irregular processes, culminating in the contract with IAQ Distribution, an Allied subsidiary that at the time had not registered as a business with the state. Although the company was paid – using federal funds meant to overcome the educational ravages of COVID-19 – only small pieces of the contracted work were ever completed. … Routinely, Stockton is ranked near the top in crime among California cities and several local officials have been caught up in criminal investigations. Silva … is one of those officials.”
Located in San Joaquin County, the Stockton Unified School District has a seven-member governing board and serves approximately 34,000 students in transitional kindergarten through grade 12 at 49 traditional schools. The district also has authorized five district-operated charter schools and 13 independent charter schools, bringing total district enrollment to almost 40,000.