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Published in Print: November 21, 2001, as S.F. Schools Accused of Wasting Bond Money

S.F. Schools Accused of Wasting Bond Money

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Officials in California reacted with anger last week to reported misspending by the San Francisco school district of as much as $100 million in the past 13 years that was meant for school improvements.

The report by The San Francisco Chronicle, coming in the wake of the district's own audits and ongoing civil and criminal investigations into some of its management practices, prompted a round of finger-pointing and reactions ranging from outrage to frustration.

"This is a grave injustice against the children of San Francisco," Delaine Eastin, the state superintendent of public instruction, said of the alleged misspending.

But one middle school teacher said: "The school district bureaucracy here is so arcane and convoluted that there tend not to be very tight controls, so people aren't surprised. [District managers] knew money wasn't being well spent."

In a six-month investigation, the Chronicle examined how the district spent $337 million, raised through four voter-approved bond and property-tax increases between 1988 and 1997. The newspaper found that many promised improvements had never been started and that others were left unfinished. As much as $100 million was spent to sustain district bureaucracy, and disproportionately large shares were spent on payroll for nonteaching personnel, the newspaper concluded.

The Chronicle reported that the 62,000-student district's board of education ignored early warnings of the problem, and failed to hold the district accountable for its spending practices. Board Vice President Dan Kelly acknowledged to the newspaper that board members "probably read the cover letter [of an audit warning of trouble], that's it."

But board President Jill Wynns, who has served nine years, told Education Week that she had tried for years to unearth evidence of improper spending practices, only to butt up against "a closed information system."

The current board leadership should receive some credit for helping deal with the problem, she said, by last year hiring Superintendent Arlene Ackerman, who undertook an examination of the district's finances.

"It took us five, six, seven years to change the management, and now we're going back to look at every penny and find out what happened here," Ms. Wynns said. "Does that mean we have no responsibility? Not at all. But we're here, and we're cleaning it up."

Tracing the Problems

The newspaper, which aired its findings in stories published Nov. 11-13, said the mismanagement dated back to the tenure of former Superintendent Ramon C. Cortines, and continued when Waldemar "Bill" Rojas replaced Mr. Cortines in 1992. Mr. Cortines worked for passage of a bond issue in 1988 and a property-tax hike in 1990. The district's needed maintenance, repair, and safety improvements were estimated at $450 million, a sum that later spiraled upward, in part because of repairs and safety upgrades required after an earthquake in 1989.

Mr. Rojas led the fight for passage of two bond measures in 1994 and 1997. Together, the four measures were supposed to pay for a wide range of improvements, ranging from the building of playgrounds and expansion of libraries to earthquake-safety work, asbestos removal, accessibility for people with disabilities, and improvements in heating, plumbing, and ventilation.

The district's spending practices began to come to light, the newspaper said, after the May 2000 appointment of Superintendent Ackerman, who hired auditors to review the division that oversees school construction and repair. "Basically, there were no control systems in place," Ms. Ackerman told the Chronicle. "It was difficult to get answers. Documents had been destroyed or were missing. Decisions were made that were clearly outside of what voters had approved."

Mr. Rojas, who left San Francisco in 1999 to head the Dallas schools but was fired from that job the following year, defended his management of the bond money, telling Education Week that yearly audits of district finances found nothing amiss.

Much of the allegation of wrongdoing stems from a misunderstanding of how bond money can be used, he argued. Spending more on projects than was allotted, for instance—one of the matters he is being taken to task for—is not a problem as long as the cost overruns can be absorbed by other funds, Mr. Rojas said.

"I've been gone three years now," he said. "For them to keep blaming me is bizarre."

Mr. Cortines, who served as the chancellor of New York City's schools and interim superintendent of the Los Angeles schools after leaving San Francisco in 1992, could not be reached for comment last week.

Vol. 21, Issue 12, Page 3

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