San Ysidro School District Lacks Adequate Oversight of Bond Proceeds And Expenditures: Report

A small school district on the U.S. Mexico border has amassed hundreds of millions of dollars of debt with very little to show for it, according to a Grand Jury report issued Tuesday.

Now, the County Grand Jury issued a report suggesting the San Diego Office of Education "take a more active role in the oversight of SYSD's financial condition and controls until the District has posted a positive financial rating for several years in a row."

San Ysidro School District is one of the poorest school districts in California. It serves a population where at least one-fifth of its students are homeless.

Meantime, San Ysidro school administrators have very little accountability or documentation for how hundreds of millions of dollars are being spent.

That’s according to a Citizens’ Grand Jury report out Tuesday.

“Every single person listed in terms of that Grand Jury report are no longer there,” said Trustee Antonio Martinez. “We have new administration and a brand new board.”

Martinez said the district is now trying to clean up the problems.

The Grand Jury is not a criminal proceeding, but rather provides citizen oversight of public agencies.

Martinez said the findings are concerning.

The report found district administrators paid impermissible expenses for travel; destroyed documents, possibly illegally, to hide their mismanagement and have no records for how more than $370,000 was wire-transferred from a bond account.

“I think ultimately what’s most disappointing is that this community in San Ysidro deserves the best, and we need to give them the best,” Martinez said. “It’s our job to clean up that corruption and we need to continue to do so.”

The report says the school district borrowed $18 million in bond proceeds, failing to transfer about six million dollars back into the fund.

“The good news is our current administration is already weeding out a lot of these issues, and a lot of the recommendations the report advises, we already began implementing,” Martinez said.

NBC 7 first began reporting on financial issues at the small border school district back in 2012.

We uncovered the superintendent at the time had accepted $2,500 in cash from a contractor seeking work with the district.

That administrator was charged and sentenced to two months in federal prison for threatening to withhold work from a contractor unless he gave the superintendent political contributions. 

During our reporting on the San Ysidro School District series, NBC 7 revealed:

  • San Ysidro trustees made amendments to their campaign disclosures to account for the cash former Superintendent Manuel Paul received in a parking lot. 
  • The FBI began investigating the cash exchange between the contractor and the superintendent.
  • A San Ysidro trustee was paying campaign money to a company she owns.
  • The school district considered paying legal fees for former Superintendent Paul’s criminal legal representation.
  • The former Superintendent Paul burned documents on district headquarters
  • Paul continued running the district months after he resigned, according to district emails.
  • The district used bond funds to settle a lawsuit.

In response to today’s Grand Jury report, the school district issued the following response:

“The San Ysidro School District agrees with the findings of the San Diego County Grand Jury Report, which indicates there was poor fiscal management by former District leadership. The audit confirms what we have already discovered from our own internal assessments. It will take time, but thankfully we have a new Board of Education and administration in place that is wholeheartedly committed to not only correcting the errors of the past, but building a strong financial infrastructure for the future, while also building trust within our community and providing the highest quality educational opportunities for students.”

Their full statement can be read here.

The Grand Jury report recommends the County Office of Education step back in to provide oversight to the small district.

The report says the County did not take an aggressive enough role to correct the problems.

The County Office of Education issued the following response:

“We strongly disagree with the characterization of our fiscal oversight as anything other than rigorous and active.”

Their full statement can be found and read here

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