Independent Report Details Major Issues in GUSD Financial Practices
The current school board, elected between 2022 and 2024, ordered a Financial Risk Assessment from FMCAT, an independent agency that does these multi-point assessments to determine school district financial health.
GUSD Parents for Public Schools is grateful to our Board for shining a light on major issues that are impacting our District’s fiscal health and are causing cuts to be made to successful programs like the expansion to a 7-period day. This expansion is now being cut to help save the $11 million that is required under the Fiscal Stabilization Plan for the next 2 budget years.
To be clear: it is the people in management at the district who have been there for a long time got us into this embarrassing situation. We have a Board who is willing to get us out of this mess, but it is going to take time.
The FMCAT report was shared at the October 8th Board meeting. It highlighted multiple areas without oversight, standards, or best practices in place.
Some top-line issues include:
The district does not adequately segregate, supervise and monitor duties in accounts receivable, payroll, and position control. These deficiencies have led to payroll errors, unreliable financial information, and an increased risk for fraud. For example, due to an ongoing vacancy in the district’s payroll supervisor position, no one is actively supervising and reviewing payroll transactions before final processing other than the payroll technicians who process the payroll. The district does not have an effective position control system to ensure that: Only board-authorized positions are entered into the system. The Human Resources Department hires only employees who have been authorized by the board to fill positions (page 6).
The District is NOT spending down all restricted funds (SpEd funding, Prop 28, etc. that MUST be spent only on these programs), and is instead drawing on unrestricted funds that could be spent on salaries and wages. (This is literally leaving money on the table that goes away if it is not spent.)
The district lacks sufficient internal controls to discourage and detect fraud.
Staff interviews indicated that the multi-year projection is not regularly updated or used when making financial decisions.
District staff indicated in interviews that the mechanism to prohibit requisitions when funds are not available is not consistently enforced and/or is often overridden.
GUSD should have established a Budget Oversight Committee to include stakeholders (they plan to establish one ASAP).
GUSD admin does not know how many FTEs they have on staff.
GUSD is over-reliant on 1:1 aides in Special Education, a significant expense that is not aligned with best practices.
There is no separation of duties or oversight in Accounts Receivable, leading to potential over and underpayments and mismanagement of funds.
GUSD has “essentially uncapped benefits spending” because contract language includes mandatory 8% increases in benefits spending each year.