sweetwater union high school district

SUHSD Superintendent Placed on Leave in Wake of Alarming Financial Audit

The audit of the Sweetwater Union High School District's finances was conducted by the Fiscal Crisis Management Assistance Team (FCMAT), which found "significant evidence of fraud"

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The Sweetwater Union High School District Board voted Wednesday to place its superintendent on paid administrative leave in the wake of a financial audit that found evidence of fraud involving her and other current or former employees.

The board voted 4-1 in closed session to place Superintendent Dr. Karen Janney on paid leave.

"The board’s action is not a disciplinary action, but it is to ensure an efficient investigation of the concerns raised in the FCMAT (Fiscal Crisis Management Assistance Team)." Board President Frank Tarantino said during a virtual meeting that followed the closed session. "We will continue to cooperate with the San Diego Office of Educations, FCMAT, and any other state and federal agencies involved in the matter.”

Tarantino, the only dissenting vote, then announced he was stepping down from his role because he believes the board deserves a president who supports the action regarding the superintendent.

Dr. Moises Aguirre, the current Assistant Superintendent of Facilities and Operations, was appointed to acting superintendent.

The 80-page FCMAT audit found significant evidence of fraud and misappropriation of funds. The board turned the report over to the San Diego District Attorney’s office on Tuesday, per FCMAT's recommendation.

“There is significant evidence to indicate there was fraud; misappropriation of funds or assets may have occurred by current or former employees,” County Superintendent of Schools Doctor Paul Gorthold told the SUHSD board during a virtual presentation Tuesday.

San Diego County contracted with FCMAT to do the audit because of its concerns about fiscal mismanagement. In its findings, FCMAT said the district administration, including the superintendent, a former chief financial officer, the director of fiscal services and the district’s bond-program financial adviser “prepared, reviewed and/or presented financial information to the governing board” that had deficiencies that resulted in "violations of board policy, government code, education code and securities laws.”

For 18 months, FCMAT investigated a three-year period of the school's finances running from July 1, 2016, to June 30, 2018. FCMAT determined that the district borrowed money from Mello-Roos funds -- which are supposed to pay for school facilities -- and did not pay the money back as required; and that the district delayed or omitted negative budget entries, like payroll, making it look like its budget was balanced. According to the audit’s findings, the district then used that inaccurate information to give employee raises it could not afford and to support the sale of bonds, misleading potential and actual investors.

“All of it is bad,” said Nick Marinovich, chairman of the bond-oversight committee. “But what I’m most familiar with is how they misled financial markets … so they wouldn’t have to reveal how bad the budget was. That is fraud!”

“It’s certainly egregious,” said community member Maty Adato, who said that she has tried for years to get the district to acknowledge it had a problem. “You’re manipulating the numbers to look good. That’s fraud.”

Superintendent Janney said the district “already has taken several steps to ensure corrections within the system, and it would continue to review and ensure proper steps are taken going forward.” 

The San Diego County Office of Education declined to comment further until the district has a chance to respond to the audit, which it has 15 days to do.

The district also announced Wednesday it was cutting 223 positions, including teachers and counselors, in an effort to make up for a $43 million dollar budget deficit.

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