The Fox is Guarding the Hen House!

May 23, 2018 CUSD BOT Meeting Agenda Item #6 INDEPENDENT CONTRACTOR, PROFESSIONAL SERVICES, FIELD SERVICE AND MASTER SERVICE CONTRACT AGREEMENTS at page 143

Board Audio at 1:22

THE PUBLIC DID NOT PULL ANY CONSENT ITEMS.

All of the Special Education Funding Contracts were passed on the Consent Calendar without Trustee Discussion.

Board Audio at 1:25

Motion to approve the balance moved by Trustee Jones

Second by Patricia Holloway

Motion Passes 7-0

Board Policy Makes it Impossible for Trustees to Review Contracts BEFORE they are entered into.

Board Policy 3300(a) Expenditures/Expending Authority was changed on April 13, 2016

At Issue: The People elect Trustees to represent the interests of taxpayers and students in all matters before the Board. When Trustees delegate the authority to enter into contracts PRIOR to Board approval then "Board Approval" becomes nothing more than a "Rubber Stamp". Unfortunately Staff has been executing all kinds of contracts - completing the work and then "After-the-Fact asking Trustees to "Rubber Stamp" these contracts even if these contracts resulted in the Gifting of Public Assets or the entry into illegal or questionable contracts. The effect of this Policy is to usurp the Power of Trustees to honor their fiduciary duty to students and the Public because it places Trustees in te Position of having to ratify a contract and honor the contract or face a breach of contract situation, even if the contract is not in the best interest of students or taxpayers.

If Trustees are to honor their FIDUCIARY DUTY to taxpayers and students, they must have the power to review contracts before they are entered into and therefore have the ability to protect students and taxpayers with a "NO" vote.

The current policy allows staff to conduct business in a manner that is harmful to students and taxpayers and forces Trustees to Breach their fiduciary duty.

The original policy stated:

"The Governing Board authorizes the Superintendent or designee to purchase supplies, materials and equipment, conduct routine repair, enter into service agreements and contracts below the bid limits for work to be done in accordance with state law. However, no contract made by a designated employee is valid or enforceable unless it has been approved or ratified by the Governing Board. Such purchases shall not exceed the limits imposed by law. All such transactions shall be reviewed by the Board every 60 days. (Education Code 17605)

The new policy states:

The Board of Trustees recognizes its fiduciary responsibility to oversee the prudent expenditure of District funds. In order to best serve District interests, the Superintendent or designee shall develop and maintain effective purchasing procedures that are consistent with sound financial controls and that ensure the District receives maximum value for items purchased. He/she shall ensure that records of expenditures and purchases are maintained in accordance with law. (cf. 3000 - Concepts and Roles) (cf. 3100 - Budget) (cf. 3350 - Travel Expenses) (cf. 3400 - Management of District Assets/Accounts) (cf. 3460 - Financial Reports and Accountability) (cf. 9270 - Conflict of Interest) Expending Authority The Superintendent or designee may purchase supplies, materials, apparatus, equipment, and services up to the amounts specified in Public Contract Code 20111, beyond which a competitive bidding process is required.

The Board shall not recognize obligations incurred contrary to Board policy and administrative regulations. (cf. 3311 - Bids) (cf. 3312 - Contracts) The Board shall review all transactions entered into by the Superintendent or designee on behalf of the Board every 60 days. (Education Code 17605) The Superintendent or designee may authorize an expenditure which exceeds the budget classification allowance against which the expenditure is the proper charge only if an amount sufficient to cover the purchase is available in the budget for transfer by the Board. (cf. 3110 - Transfer of Funds)
The Board; by agreeing to this policy, has breached its fiduciary duty to student and taxpayers by allowing Staff and the Superintendent to enter into and execute Contracts PRIOR to Board Approval.

The Staff has demonstrated repeatedly that it does not; "maintain effective purchasing procedures that are consistent with sound financial controls and that ensure the District receives maximum value for items purchased", and in fact has entered into land purchase agreements on the Consent Calendar without a price that resulted in the gifting of $13 million dollars to Rancho Mission Viejo in the purchase of the Esencia K-8 School Site just to name one of the most egregious examples.

See:

• CUSDWatch: Complaint to Orange County District Attorney CUSD's Purchase of Esencia K-8 that resulted in the Gifting of 413 million in Taxpayer Dollars

A review of the contracts below will show that CUSD Staff does not adhere to the 60 day review period and in fact most contracts are completed before they ever come before the board as is evidence by the Districts employment contract with Interim Superintendent Burch and his wife's company Quantum Dynamics- what appears to be a shame company used to pay Doctor Burch without disclosing total District payments made to Doctor Burch.

See:

• May 23, 2018 CUSD BOT Meeting Agenda Item #30 MASTER SERVICE AGREEMENT - QUANTUM EDUCATION DYNAMICS
• CUSDWatch Article: CUSD Chief Communications Officer Responded to Article about Tesoro High School Nepotism
• CUSDWatch Article: CUSD Responds to a Second Request for Information on Interim Tesoro Principal Dr. Burch

At the May 23, 2018 CUSD BOT Meeting staff entered into the following agreements that were approved (after the fact in most cases) to be paid for out of Special Education Funds.

The following contracts should be pulled and reviewed:

• Contract: PSA 1718246 "Kids-Fit"ness Physical Therapy This Contract Should have been pulled by Trustees - The Contract Name is incorrect it should be a contract with Christy Marilo or Christy Marlo dba Kids Fitness Physical Therapy. Kids Fitness Physical Therapy appears not to be in business any more, but Christy Marilo is a licensed Physical Therapist.

• Contract: ICA 1617275 Juli Kim Dixon This Contract Should have been pulled by Trustees - Funding is Teacher Effectiveness Grant, Not Special Ed

• Contract: PSA 1718046 Wertheimer-Gale & Associates This Contract Should have been pulled by Trustees - The Agreement is not included in the Board Agenda

• Contract: PSA 1718064 Hear Now This Contract Should have been pulled by Trustees - The Estimated Expenditures should read $7,500 not $3,500.

*Note Is District Staff confusing Wertheimer-Gale & Associates with Hear Now- the Wertheimer-Gale & Associates Contract has NO SUPPORTING DOCUMENTATION in the May 23 Agenda and it increase the contract by an amount of$7,500 Where as the Hear Now contract is suppose to increase by the identical amount of $7,500 but is listed as an increase of $3,500.

These four Items need to be reviewed by Trustees for accuracy and brought back if they are NOT accurate.

Trustees need to change this Policy to ensure they receive Contracts for approval BEFORE they are entered into and the work has been started.

All Links are Live at: CUSDWatch.com