West Covina School Deficit May Rise by $1 Million

WEST COVINA —  The West Covina Unified School District will need as much as $1 million more than originally estimated in emergency funds from the state to pay its bills, an audit to be released tonight at a special Board of Education meeting is expected to conclude.

“The deficit will be considerably greater than anticipated,” acting Supt. Billy J. Barnes told more than 250 angry parents, students and teachers at a board meeting Tuesday night.

Barnes said a draft of a special audit shows that the school system will need between $3.5 million and $3.7 million. The original estimate of $2.7 million did not cover the entire fiscal year that ends June 30, he said.

Barnes also said the district’s auditors, Vavrinek, Trine, Day and Co., warned officials last November that the system could be facing a deficit. Board members say they were not aware of the magnitude of the problem until late April.

Assurances Given

Administrators have said that cost overruns and inflated estimates of expected revenues caused the deficit.

But board members have blamed the budget problems on administrators for glossing over financial reports and allaying members’ concerns with assurances that the district would be receiving more money from the state.

The audit of the 1985-86 school year, released in November, said “general fund operations (have) resulted in a deficit of revenue over expenditures for the previous four years. . . . If present deficit spending continues, the district may have a deficit unrestricted fund balance on June 30, 1987.”

Dorothy C. (Dottie) Grinstead, a board member since 1983, said in an interview that she and other board members were not very concerned about the audit’s results because administrators told them $1 million in additional income was expected.

“There was always that . . . assurance that ‘X’ amount of additional income was expected,” she said.

According to a chronology released at Tuesday’s meeting, the audit for the 1985-86 school year was received Nov. 25. At its next regular meeting in December, the board was told by its staff that additional income of $1 million was expected. Staff also reported that there was $372,134 in the reserve fund.

In a study session Jan. 31, the board’s staff reported a projected deficit of between $632,589 and $1.66 million for the 1986-87 school year. The district received about $300,000 less than expected in lottery funds, according to the financial chronology. Staff members also reported that $500,000 would be available from other sources to avoid a year-end deficit.

At the same January meeting, administrators projected the district would receive an additional $1.2 million from the state.

Grinstead had believed that finances would be tight “but you have to feel that with (projections of additional income) . . . things are being taken care of.”

At an April 28 board meeting, administrators revealed that no additional funding was available and the system was facing a $2.7-million deficit.

On May 2, the board formally sought an emergency loan from the state and removed two of the top three district administrators from their jobs. Supt. Donald Todd, who is expected to retire June 30, was placed on administrative leave for medical reasons. Jimmie L. Duncan, assistant superintendent for business services, was placed on an indefinite administrative leave “due to the current financial situation,” according to Kathleen J. Jones, board president.

Results of the independent audit will determine how much in emergency funds the district will seek from the state. The audit will also recommend ways to avoid similar problems in the future. The 5 p.m. meeting will be held at the district’s office at 1717 W. Merced Ave.

Amendment Expected

Meanwhile, state Sen. William Campbell (R-Hacienda Heights) is expected today to introduce an amendment to a bill, seeking up to $3.9 million in emergency funds for the district. The bill will be heard in the Assembly Education Committee next Tuesday, according to an aide to Campbell.

At Tuesday’s meeting, Jones assured the audience that classes will not be closed before they are scheduled to end June 18.

Elizabeth Gacevich, a senior at Edgewood High School, said “the students should never have had to worry about getting the diplomas we worked hard for.”

“I can guarantee when the next election comes and I am 18, I will not vote for any (current) members of the board,” Gacevich said.

Board members, trying to explain how the financial crisis occurred, said they are responsible for hiring administrators who oversee operations of the district, not for managing day-to-day operations.

“We are lay people. We do not work full time with the district,” Jones said in response to a written question asking whether someone on the board oversees the financial management of the district. “It’s not our job to be involved in day-to day operations of the district.”

But the explanations were met with anger from some members of the audience. About 250 people packed the auditorium at Cameron Elementary School, while dozens more listened to a loudspeaker on the school patio outside.

‘Highly Technical’

Austin Wade, manager of data processing and financing for the district, said the school budget “is highly technical. The board must rely on staff to interpret and answer questions.” Wade’s comments drew snickers from the crowd.

Later, Dorothy Sheldahl put the blame squarely on the board.

“It’s unfair to lay this on anybody else,” said Sheldahl, who has three children in district schools. “We are being told . . . they (the board members) don’t understand (the budget), they are lay people.

“When they ran for office, they understood,” she said. “We voted for them because we thought they understood. . . . Don’t tell me that you don’t have responsibility. We voted you in.”

Betty L. Joyce, a teacher and former president of the Teachers Association of West Covina, called for a grand jury investigation into possible financial mismanagement.

“You (the board members) are not totally to blame,” she said. “However you are the bottom line. . . . You have lost the confidence of the community that elected you and the staff you have employed.”

Joyce advised the board to wash “all the dirty laundry in public. Then and only then can we really make a new beginning.”

“This is better than ‘Dynasty.’ It’s exciting,” whispered Natalie Gombert, a West Covina resident for 31 years.

Gombert, who doesn’t have any children in district schools, had a simple explanation for why she was attending Tuesday’s meeting. “I’m a taxpayer,” she said.