Tag Archives: IUSD

FCMAT – California’s Unaccountable Political Player

28 May

By Thomas Ultican 5/28/2022

California Assemblywomen Delaine Eastin wrote legislation creating the Financial Crisis Management and Assistance Team (FCMAT) in 1991. Her legislation was in response to the bankruptcy of the Richmond School District and requests for financial help from four other districts. In 1992, Governor Pete Wilson signed the legislation into law and located FCMAT (pronounced Fick-Mat) under the auspices of the Kern County Superintendent of Schools. Since then, its power has grown and portfolio expanded with little oversight. Today, there is a burgeoning chorus of critics calling for reform or even termination.

In the mid-1990’s, I made the trip through the south end of the San Joaquin Valley many times. On the car radio, the only listening choices available were Rush Limbaugh and the Buck Owens show from the Crystal Palace in Bakersfield. Bakersfield is named after founder Thomas Baker but the name easily could refer to the weather. The city of a half-million sitting about 140 miles from Death Valley regularly sees temperatures over 100° F between May and October. It gets really hot for extended periods. That is where the FCMAT home office is located.

Bakersfield, the county seat of Kern County, is an economic powerhouse in both oil and agriculture. In 2020, it had a slightly larger Republican voter registration than Democratic (R=158,771 & D=152,102). Registrations have been almost evenly split for decades. In 1992, when Republican Governor Pete Wilson chose the Kern County Office of Education as administrative and fiscal agent for FCMAT, the Republican voter registration advantage totaled 118.

The Developing Juggernaut

FCMAT employs a neoliberal structure popularized in the United Kingdom called QUANGO. The Scottish writer Roland Watson describes QUANGO as a “quasi-autonomous non-governmental organization.” Those of short duration are sometimes referred to as a task force. They carry out government mandates by receiving and issuing contracts. Watson noted that “its rear end looks distinctively democratic and accountable but the front part is definitely statist and bureaucratic.” The problem with a QUANGO is the tendency to overtly support the political agenda of whoever is in power.

The Data Center Reported that in 1992 FCMAT had a budget of $562,000 which ballooned to $35.6 million by 2002. The report also criticized its use of no-bid contracts and lack of accountability. Los Angeles State Assembly Woman Jackie Goldberg called for an audit of FCMAT in 2003. The state auditor reported that FCMAT was providing value to districts but did criticize the over use of no-bid contracts. That appears to be the only audit ever done of FCMAT.

Besides the legislation listed in Table 1, there are many legislative edicts for FCMAT to audit specific school districts. The districts are charged a no-bid fee for the mandated audits; FCMAT contracts out much of the work. Local school districts that have had previous financial issues often must pay a consulting fee to obtain FCMAT’s blessing in order to implement a budget. In districts with financial problems, this agency has more power over district policy than voters.

Transparent California reveals that the top 2020 total salary at FCMAT, $313,780.72, went to CEO Michael Fine. Including Michael, there were thirteen FCMAT staff members who earned more than $214,000 that year. The data shows that FCMAT had seventeen employees on staff being paid a total salary of $3,568,008.

Is it really about Gentrification?

In 2018, two school districts in California requested emergency funding to maintain operations. Both Oakland Unified School District (OUSD) and Inglewood Unified School District (IUSD) arrived in this predicament due to incompetent (unethical?) administration during a state takeover.

California took over Inglewood’s schools in 2012 because of financial problems that should properly be credited to George Bush’s No Child Left Behind and the state of California’s almost unregulated charter school movement. In 2016, Secretary of Public Instruction (SPI) Tom Torlakson recruited Vincent Mathews to be IUSD’s forth state appointed Superintendent.  

At the beginning of the millennium, Mathews led the for-profit Edison school in San Francisco. Later, he went through training at the infamous Broad Academy which included studying their handbook for closing public schools. He also served for two years as the state appointed superintendent for OUSD (2007-2009).

Mathews stayed 18 months in Inglewood before accepting the Superintendents position in San Francisco. About his Inglewood tenure, the LA Times noted,

“A recent report by the state’s Fiscal Crisis and Management Assistance Team found that, under Matthews, Inglewood had left day-to-day tasks to consultants, hadn’t monitored its budget and had underestimated its salary costs by about $1 million. The district had also overestimated its revenue, in part by incorrectly counting the number of students.”

FCMAT was supervising that state loan given to IUSD and was charged with monitoring the district’s finances. However, they missed the bad budgeting practices implemented by the state appointed administrator.

In Oakland Antwan Wilson another Broad Academy graduate blew a hole in the Budget under FCMAT’s less than watchful eye. After two and a half years on the job, he left Oakland to be superintendent of schools in the nation’s capital. Soon after that, huge budget problems were discovered causing the school board to immediately order more than $15 million in mid-year budget cuts.

In an article detailing some of the mismanagement and greed in Oakland, Valerie Strauss of the Washington Post reported:

“Wilson brought in dozens of executive staff members from outside the Oakland district, creating new positions and departments that were not budgeted, and paying more than was customary in the district, …. In 2013, before Wilson arrived in Oakland, only four administrators earned more than $200,000; two years later, at least 26 did…

The 2018 solution to these financial issues from the state legislature was AB 1840 which dictated the terms under which OUSD and IUSD could receive emergency funding. It signified that in the budget acts for the coming years, Oakland and Inglewood could apply for emergency funding if they met certain criteria. It also meant that their respective counties – Alameda and Los Angeles – would assume control from the state and use FCMAT to financially supervise the districts.

In SB 74 the 2020 budget act, Oakland received $16 million with the law stipulating “affirmative action by the governing board to continue planning for, and timely implement, a school and facility closure and consolidation plan that supports the sale or lease of surplus property”.

The next year, the new school board turned down $10 million authorized in SB 129 which again required “Affirmative action by the governing board to continue planning for, and timely implementation of, a school and facility closure and consolidation plan that supports the sale or lease of surplus property.”

FCMAT explains on their web site how the governing power in OUSD was changed by AB 1840:

“Under the provisions of Assembly Bill (AB) 1840 (Chapter 426/2018), the trustee serves under the direction and supervision of L.K. Monroe, Alameda County Superintendent of Schools. Assembly Bill 1840 designates FCMAT as the agency to identify and vet candidates to serve as county trustee. The final selection of a candidate for Oakland Unified School District trustee will be made by Superintendent Monroe, with the concurrence of the State Superintendent of Public Instruction (SPI) and the president of the State Board of Education.”

In other words, OUSD no longer under state control is now under county control and their fiscal agent is FCMAT. Many people are wondering if the big push to sell off school properties from both the state and county is not motivated by gentrification and developer profits. It is well known that outside of a onetime cash infusion there are no significant savings associated with closing wholly owned school sites.

Working for the Bosses!

Sweetwater Union High School District (SUHSD) in San Diego County went through a grueling few years. In April of 2014, four of the five Sweetwater board members plus district Superintendent Jesus Gandara pled guilty to corruption charges and resigned. This is when the current SUHSD board of Trustees was originally elected. Unlike the previous board that got its financial support from the construction industry, the new board members were all supported by the teachers’ union. This was not greeted enthusiastically by some local political forces.

During their first three years, the district ran harmoniously. In 2018, trouble emerged. There was a transition in leadership within the SUHSD financial team. The CFO, her top assistant and two other members of her small team retired after submitting the budget for the 2018-19 school year. That summer the new CFO, Jenny Salkeld, discovered a $20 million dollar error. She immediately reported her discovery to the district and county.

After receiving Sweetwater’s alert about the accounting errors, the County Office of Education officially disapproved the 2018-19 budget the district had submitted. The reasons for disapproving the budget were the reasons Salkeld had reported.

Apparently someone at the county leaked the budget information to the Voice of San Diego. The district which was in the process of understanding the extent of the problem lost the opportunity. Instead they were faced with a withering public attack in both the San Diego Union and The Voice of San Diego. Headlines implied that a group of incompetent people at SUHSD were incapable of managing their affairs honestly.

Enter FCMAT. SUHSD was forced to pay them $50,000 to have finances reviewed. A preliminary report was delivered that December at a SUHSD district school board meeting. Voice of San Diego’s Will Huntsberry shared,

“FCMAT’s chief executive officer Michael Fine told board members that 302 entries in the district’s accounting system were doctored to create the impression the district had more money than it really did. ‘That my friends and colleagues, is a cover-up,’ …”

For weeks, local San Diego TV and Print media were filled with damning headlines like the NBC affiliate’s, “Audit of Sweetwater Union High School District Finds Evidence of Fraud” or the online publication Voice of San Diego’s “Audit Finds Sweetwater Officials Deliberately Manipulated Finances.” Every local news outlet published a story with some version of these headlines. There was speculation that the fraud had to do with a large school bond measure voters had approved and predicted multiple people were going to prison.

The following June FCMAT issued its completed report. It certainly weighed an ‘A’ (my mother’s satirical goal for a college research paper) but was not of great value. By the time the report arrived, SUHSD had already implemented a vast majority of the recommended fixes to their budgeting process. Eventually, the former SUHSD CFO was fined $28,000 for falsely attesting to the accuracy of the budget and the district agreed that they would bring in an independent consultant for any future bond offerings. Ironically, the district had used an independent consultant for the bond offering in question.

This April, the San Diego Union’s Kristin Tanaka reported, “Seventeen of San Diego County’s 42 school districts are projecting that they will spend more than they take in — not just in the current school year, but the next two years — as districts grapple with rising costs and lower enrollment, according to the latest batch of financial projections districts submitted to the county.” SUHSD was not one of the seventeen. The district survived the crisis and still has the same apparently popular school board in place.

It was a similar story in 2003 for OUSD. Then Superintendent Dennis Chaconas realized that the accounting system was dated and needed modernizing. EducationNext reported “New software, installed so that the school district could better understand its finances, had uncovered a $40 million deficit from the previous year.” Most sources say it was actually a $37 million dollar deficit but still big and shocking.

Ken Epstein shared, “OUSD had adequate money on hand in a construction fund that could have temporarily paid off the shortfall, but the state would not allow Oakland to tap into that fund, though the practice was allowed in other districts.”

Local political leaders like then Oakland Mayor Jerry Brown and influential state Senator Don Peralta wanted OUSD taken over by the state. They used FCMAT in an effort to make it happen. Online news source Majority reports that when OUSD proposed covering the shortfall with construction funds:

“Tom Henry, the CEO of California’s Fiscal Crisis and Management Team (FCMAT) opposed this plan, and Mayor Brown questioned it heavily. (During a state takeover, FCMAT would be responsible for monitoring the school district’s financial progress.) Phone records later obtained by the Oakland Tribune revealed over 40 phone calls on key dates between Brown, Henry, and Randolph Ward, who would end up in charge of OUSD when it was placed under state control, in the two months before the state takeover.”

During the same period, there were no phone calls to OUSD Superintendent Dennis Chaconas.

OUSD was forced to accept a $100 million dollar loan and taken over by the state instead of paying off the deficit with the $37 million dollars from their construction fund. After almost two decades of state and county control financially supervised by FCMAT, Oakland is still stuck with $6 million dollar yearly loan payments until at least 2026 and the state appointed administrator was allowed to create a new financial crisis.

….

At the very minimum, it is time to reign in and reform FCMAT. They have become an authoritarian lever used by people in power to enact their unpopular agendas. It is supposedly an “Assistance Team” but in reality FCMAT is causing more damage than their “assistance” is worth.

Are Public Schools in Inglewood, California a Warning?

3 Jun

By Thomas Ultican 6/3/2018

In 2006, the relatively small Inglewood Unified School District (IUSD) had over 18,000 students and was a fiscally sound competent system. Today, IUSD has 8,400 students, is 30% privatized and drowning in debt. In 2012, the state of California took over the district, usurped the authority of the elected school board and installed a “State Trustee” to run it. IUSD is on its sixth state appointed trustee in six years.

This crisis was created by politicians and wealthy elites. It did not just happen. Understanding the privatization of Inglewood’s schools through the choice agenda is instructive of the path that could lead to the end of public schools in California.

Kicking Off the Choice Agenda

Inglewood is east of the 405 freeway in Los Angeles county between Watts and the Los Angeles International Airport. Today, it is part of a giant urban megalopolis but 50 years ago it was a distinctly separate community that was predominantly middle class and mostly white. Now it is populated mainly by working class poor African Americans and Hispanics. 84.8% of the students in Inglewood qualify as socioeconomically disadvantaged.

IUSD was originally incorporated in 1888. I asked Professor Larry Lawrence to help me understand Inglewood’s schools. He replied, “Of course, if you want a long view of Inglewood schools I would be glad to go through the history. My mother began attending them in 1914, graduated from Inglewood High School in 1926, came back to teach in 1929, and stayed for 41 years. I also went all the way through and came back to teach, leaving in 1966 to go to UCLA (just after the Watts Riots of the summer of 1965 – no connection to me leaving).”

Larry taught mathematics at Morningside High School. The enrollment records at Morningside mirrors what has happened to enrollment in IUSD. In the 2005-2006 school year the high school enrolled 1,535 students. This year (2017-2018) the enrollment dropped to 751. What happened?

Moringside Higg

California Department of Education Enrollment Data for Morningside High School

To understand the causes for the harm to Inglewood’s public schools and how profoundly unjust those causes are, one must first know about standardized testing and the No Child Left Behind (NCLB) law. The most important metric for judging schools and teaching utilized by NCLB were the “objective” results of standardized testing. Unfortunately, the big standardized test is completely useless for evaluating schools, teachers or learning.

In 1998, an Australian, Noel Wilson, wrote a definitive paper, “Education Standards and the Problem of Error,” showing why standardized testing should not be used to evaluate schools or teaching. His work has been verified repeatedly. The education writer, Alfie Kohen wrote in his 1999 book The Schools Our Children Deserve “… eliminate standardized tests, since we could get the same results by asking a single question: ‘How much money does your mom make?’” The only correlated result from standardized testing is the economic condition of the students to their test scores.

In 2001, President George Bush (R) and Massachusetts Senator Ted Kennedy (D) teamed up to pass NCLB. This law required every state to adopt standards and institute standardized testing. The federal government then used the state testing data to decide if schools were making Adequate Yearly Progress (AYP) toward 100% of their students being proficient in math and English by 2014. The law also “disaggregated” results by subgroups such as English language learners, special education, white, African American, Hispanic and others. If any one of those subgroups failed AYP, then the school failed.

A first year AYP failure was not a serious problem but the second consecutive year of failure to meet AYP goals meant being designated a “School in Need of Improvement” (SINI). This designation came with several requirements including sending a letter to parents telling them that the school was failing to meet AYP. It gave parents a list of options such as free tutoring and transfer to a non-failing school. The federal government designated Morningside High School a SINI in 2005 so before the 2006-2007 school year every parent got a letter saying the school was failing according to the United States Department of Education.

Because, nearly 85% of students in Inglewood met the definition of socioeconomic disadvantaged and standardized testing accurately reflected economic condition, all the schools in the IUSD were soon labeled failing by the federal government. Concurrent with these completely illegitimate conclusions the district started its precipitous decline.

Alfie Kohn published a 2004 article he called, “Test Today, Privatize Tomorrow; Using Accountability to ‘Reform’ Public Schools to Death.” In it, he discussed the idea that the NCLB accountability measures were purposely designed to open a path for privatizing schools. He wrote,

“As Lily Tomlin once remarked, “No matter how cynical you become, it’s never enough to keep up.’”

“We now have corroboration that these fears were entirely justified. Susan Neuman, an assistant secretary of education during the roll-out of NCLB, admitted that others in Bush’s Department of Education ‘saw NCLB as a Trojan horse for the choice agenda – a way to expose the failure of public education and ‘“blow it up a bit’’’ (Claudia Wallis, ‘No Child Left Behind: Doomed to Fail?’, Time, June 8, 2008).”

It is a widely held conclusion that NCLB was a failed education initiative. If privatizing schools was its true intent, then NCLB was a success.

Invasion of the Charter

Reed Hastings CEO of Netflix was such a heartfelt liberal that he even joined the Peace Corps and taught mathematics in Africa. That is his only teaching experience. In 2000, he used his vast wealth to get the cap on charter schools in California lifted. He also told a gathering of the California Charter Schools Association (CCSA) that elected school boards are anachronisms and should be replaced by non-profits running charter schools.

In 2000, Proposition 39 was also supported by Reed Hastings and other pro-school-privatization billionaires. Due to the no-new-tax mantra of conservatives, schools were having a difficult time raising money to build needed facilities. Proposition 39 lowered the vote threshold required to pass a bond. Unfortunately, hidden within the laws language was a requirement for underutilized public schools to share their facilities with charter schools. With no debate the public unknowingly voted for co-location of charter schools with public schools.

When proposition 39 is coupled with the pro-charter authorizing system in California, citizens lose all democratic control over their local schools. As former Assistant Secretary of Education, Diane Ravitch shared:

“District officials in California have confided in me that it is virtually impossible to stop a charter proposal, no matter how bad it is or how little it is needed. If the district turns down the proposal, the charter advocates appeal to the Los Angeles County School Board, where they are often approved. In the off-chance that both the district and the county turn down their proposal, the advocates appeal to the state, where they are almost certain to win approval.”

At the start of the millennium, Inglewood had 18 schools. Now, it has at least 31 schools.

Inglewood Charter Schools

Charter Schools Operating in Inglewood, California

With the federal government proclaiming that IUSD schools are failing, a fertile area for charter school establishment was cultivated. Most people do not know much about schools and education policy so of course many concerned parents wanted to move their children out of the “failing district schools.”

The IUSD schools were never failing nor are charter schools their equivalent. Certainly, there are some good classrooms in charter schools but they come with the charter industries’ record of fraud, abuse and instability.  When one of these private businesses closes their doors as has happened too frequently, district schools must take in all their students. Unlike charter schools, public schools cannot reject a student.

Professor Gordon Lafer recently published the paper Breaking Point: The Cost of Charter Schools for Public School Districts which shows that a significant amount of the costs for a student stays with the district when a student transfers to a charter school. In addition, Lafer noted that charter schools avoid special education students and most especially higher cost more severely handicapped special education students.

Enrollment Data Chart by Tom

Inglewood Compiled Data; Charters Avoiding Disabled Students

The above chart is based on enrollment data for the 2017-2018 school year. It shows that Inglewood charter schools are avoiding more than half their share of special education students. Also, the total number of students enrolled in Inglewood charter and public schools combined is almost 5,000 less than the 2006 public school enrollment of 18,000. It appears that there are less students in the district and some resident students are attending schools outside of the district boundaries.

The State of California has Failed Inglewood

On April 6, 2018 the sixth Inglewood state trustee, Thelma Meléndez de Santa Ana, wrote parents about the districts budget,

“When I began in August, I learned that the district faced an $8 million shortfall.”

“The result of rising costs and Inglewood Unified’s inadequate planning, even after the cost savings measures implemented to date, as of March 15th is now a $7 million budget shortfall.”

San Diego Unified School District (SDUSD) has 130,000 students. It is 15.5 times larger than IUSD. A $7 million deficit for IUSD is equivalent to a $108 million deficit for SDUSD.

In 2012, the Daily Breeze reported on Kent Taylor the first “State Trustee” assigned to Inglewood,

“… Taylor was thrust into a high-profile, high-pressure situation when California state schools chief Tom Torlakson recruited him from the top job at the Southern Kern Unified School District in hopes Taylor could rescue Inglewood Unified from the financial quicksand.”

“Two months later, he was pressured to resign for making financial commitments with the teachers union without approval from the California Department of Education.”

What happened with Taylor was never fully explained. He got a job in the neighboring Lennox school district and within the year became their superintendent. He is still the superintendent in Lennox.

The state replaced Taylor with the school finances leader serving directly under him, La Tanya Kirk-Carter. She had been recruited from Beverly Hills Union High School District by the state to head up the business division and “help lead the recovery.” She was supposed to be a temporary replacement until a new permanent trustee was hired, but served out the rest of the 2012-2013 school year.

The third Trustee assigned by State Superintendent Tom Torlakson was veteran administrator Don Brann. He was still serving as Vice President of the Board of Directors for the Da Vinci Schools, college-preparatory charter schools in Hawthorne. For 15 years, Brann was Superintendent of the Wiseburn School District in Hawthorne, which is a close neighbor to Inglewood.

In a somewhat ironic twist, Brann’s success in turning around Wiseburn School District (WSD) was partially due to his inter-district enrollment plan, a plan that drew students from IUSD. WSD increased enrollment by touting the district’s small class sizes and availability of space for after school programs to attract students from surrounding areas.

Brann resigned after one year and Torlakson recruited Vincent Mathews the leader of the San Jose schools to be the Trustee. Mathews is a 2006 alumnus of the unaccredited Broad Academy for school administrators. He also served as Educator in Residence at the NewSchools Venture Fund. In 2001, Mathews was principle of the for-profit Edison Charter Academy.

Mathews stayed 18 months in Inglewood before accepting the Superintendents position in San Francisco. He is the longest serving state trustee so far.

About Mathew’s tenure, the LA Times noted,

“A recent report by the state’s Fiscal Crisis and Management Assistance Team found that, under Matthews, Inglewood had left day-to-day tasks to consultants, hadn’t monitored its budget and had underestimated its salary costs by about $1 million. The district had also overestimated its revenue, in part by incorrectly counting the number of students.”

Jason Spencer became Torlakson’s fifth appointment when he was selected Interim State Administrator to succeed Matthews.

Now, Inglewood has another Broad Academy graduate from the class of 2006, Thelma Meléndez de Santa Ana. Her bio at the Broad Center says,

“Thelma Meléndez de Santa Ana began her career as a bilingual first-grade teacher and brought her first-hand teaching experience to leadership roles in several urban school districts throughout Southern California — including Pomona, Santa Ana and Los Angeles — as well as the U.S. Department of Education, where she served as assistant secretary for elementary and secondary education. In that role, she helped draft the Blueprint for Reform, an Obama administration plan for continuing improvements begun in the Elementary and Secondary Education Act.”

Is this the Future?

NCLB set the table. Students in poor communities were guaranteed to produce bad test results. Billionaires were pouring huge money into developing the charter school industry. State leaders were putting privatization friendly leaders in charge of school districts. The state trustees were never in place long enough to provide stable leadership.

Eli Broad attended public school and went on to become the only person ever to develop two Fortune 500 companies, Sun America and KB Homes. Broad, who is worth $6 billion, decided that public schools should be privatized and established a school for administrators to promote his ideology.

In Oakland, the first state trustee was a Broad Academy graduate named Randy Ward and three more of the next 6 superintendents who followed Ward were also Broad trained. Oakland suffered nine superintendents in 13 years.

In Inglewood, one trustee was a charter school founder who was concurrently serving as a board member of the charter school and the last two superintendents were Broad trained. Inglewood received six state appointed trustees in six years.

How much longer before large school districts like San Diego and Los Angeles – with 25% or more of their students in privatized schools – are forced into bankruptcy and taken over by the state? Both districts are currently running massive deficits caused primarily by charter school privatization and unfair special education costs.