The State of California has criticized Stockton Unified, the largest school district in Stockton, for falling short in its clean-up efforts, according to a letter dated June 30 from Alice Lee, director of the state’s Audits and Investigations Division. The district's revisions to its procurement and conflicts of interest policies are found to be lacking and non-compliant with state and federal regulations.
These revisions were mandated following a Fiscal Crisis and Management Assistance Team report from February 14, which unveiled potential fraud involving federal COVID-relief money within the district. The district was given until May 31 to revise procurement, record retention, and conflict of interest policies in response to these findings. A deadline extension was sought and granted until June 6.
Stockton Unified Board President AngelAnn Flores expressed surprise at Lee's findings and pledged to resubmit the problematic policies and procedures to the board's policy subcommittee, the group responsible for the initial revisions.
"We're operating under transparency ... to do that, it takes a bit of time to get everybody's input and validate the information," Flores said. "We're limited with the information that we're given from staff at the same time."
Trustee Ray Zulueta characterized Lee's letter as "alarming," expressing his dissatisfaction with the board's performance. "For 7 months we have been lulled into a sense of security by our board leadership only to be confronted with reality one month before the new school year starts," Zulueta stated. "I hope that we as a district have a better answer for all this other than, 'we don't have enough time to do the work.'"
Lee's letter also revealed that Stockton Unified is missing federal requirements concerning bid thresholds and small purchase procurement procedures. She recommended that SUSD develop a procedures manual to guide staff in complying with these requirements.
Additionally, Lee criticized the district's incomplete updates on the completion of Economic Interest Disclosure Form 700s. Form 700 is a personal financial interest disclosure form mandated by law to ensure that officials make decisions in the public interest rather than for personal gain. The district failed to describe its method of identifying possible conflicts of interest and didn't outline disciplinary actions for violations of Form 700 policy, she pointed out.
Stockton Unified must rectify these policy "deficiencies" by July 31, Lee asserted, or the California Department of Education may consider imposing further measures, including additional reporting requirements and potentially withholding federal program funds.
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