At its Jan. 23 meeting, the Beverly Hills Unified School District Board (BHUSD) of Education unanimously accepted three audits that showed improved management of the district’s finances and construction projects.
The board received reports on the 2022-23 District Financial Audit and 2022-23 Measure E and Measure BH Financial Audit by accounting firm Christy White, and on the 2022-23 Measure E and Measure BH Performance Audit by accounting firm Moss Adams, LLP.
“Overall, it’s clear our new bond management team [Fonder-Salari, Inc.] has really done a great job trying to … clean up some of the delays and challenges that were left in the wake of the former management company [Team Concept Development Services],” Board President Amanda Stern told the Courier. “At present time, we are very pleased and weren’t surprised the audits were so clean.”
Board Vice President Rachelle Marcus was similarly satisfied with the auditors’ findings and impressed by Fonder-Salari’s stewardship of the bond program.
“I honestly believe that they have made a great change in our bond program and [are] helping us save money,” Marcus said.
Fonder-Salari was awarded the contract to manage the bond program in June 2022, taking over from TCDS, which received criticism for transparency and failure to deliver after becoming bond manager in 2017.
Measure E, a $334 million bond, was approved in 2008, and the $385 million Measure BH bond was approved in 2018. Money from those bonds is funding a slew of construction projects across the district, including the new campus of El Rodeo Elementary School—slated to open next school year—and several new buildings at Beverly Hills High School to be completed for the 2024-2025 school year.
“Right now, every time I drive by [El Rodeo] I get so excited because I can see the progress and the landscaping,” Marcus said.
While summarizing the Measure E and BH Performance Audit, Moss Adams partner Stephen Bacchetti said that BHUSD had implemented “great practices” undertaken by few other districts. Bacchetti has audited three different BHUSD bond managers since 2017, and he praised the district and Fonder-Salari for working proactively and collaboratively to improve construction practices.
“When we started these seven years ago, the total audit findings were 24, which is quite amazing,” Bacchetti said. “We’re down to four.”
In its audit, Moss Adams noted four instances of insufficient expenditure management, procurement procedures and master planning. Auditors suggested that implementing more detailed change order logs and defined contract types could help improve these areas.
Stern said the favorable findings were the result of improved communication and transparency, the restructuring of the district’s administration and the end of pandemic-era supply chain issues.
“The progress … with a number of projects has improved 100 percent, and therefore I think we much more readily understand where we’re going and what still needs to be done,” Stern said.
According to Christy White audit director Jesus Cardenas, the District Financial Audit did not show any issues with BHUSD’s internal controls, government auditing standards or its compliance with major federal programs. However, auditors found three deficiencies in the district’s compliance with state requirements that BHUSD officials were working to fix, he added.
Cardenas said the district had not met state requirements for classroom teacher salaries, did not implement a plan for home-to-school transportation by last April and “exceeded the allowable ratio” of administrative employees per 100 teachers.
“I wouldn’t say [the deficiencies] are anything too severe,” Cardenas said. “Just minor findings.”
Cardenas largely attributed the deficiency in classroom teacher salaries to inflated budgets stemming from one-time COVID-19 relief funds, and he said the district was taking corrective actions on the two others.
“The weaknesses [Cardenas] identified, I’m confident the district will have a cure plan and we will be monitoring that closely,” Stern added.
In response to a question from Marcus, BHUSD Business Services Assistant Superintendent Raphael Guzman said many California school districts have struggled to meet the teacher salary requirements, and BHUSD does not have to pay a penalty for failing this requirement.
Cardenas said that the Measure E and Measure BH Financial Audit examined county treasury records, revenue, expenditures and accounts receivable and paid, and that it did not reveal any deficiencies.
“We didn’t note any misstatements or overstatements … everything was fairly presented,” Cardenas said.