Tom Butt
 
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  WCCUSD Bond Program Critics Come Up With Another Dry Hole
July 23, 2017
 

After three years, the much ballyhooed Securities and Exchange Commission (SEC) investigation of the WCCUSD bond program ended the same way it started – with no finding of any illegal activity. What it did do is cost the taxpayers tens of thousands of dollars – maybe hundreds of thousands – in legal fees and other costs required to provide documents and records.

The lack of a finding of illegal activity was a big disappointment to the critics of the bond program and Charles Ramsey. These critics have waiting fruitlessly for the last three years to find something illegal to justify their obsession bashing the bond program.

Their suspicions drove the District to spend over a million dollars on a forensic audit completed in 2016 that similarly found no wrongdoing. The audit itself turned out to be a fiasco, as the auditors, Vicenti Lloyd & Stutzman LLP, also known as VLS, had no experience in school design and construction programs, and the audit was replete with significant errors and omissions.

About the only piece of useful information turned up by the forensic audit was that the District’s bond program contract manager, the Seville Group, Inc. (SGI) was corrupt and incompetent. Lucky for the District, all of the school projects were designed by experienced architects and constructed by the low bidders in a public bid process, so that any effects of SGI’s incompetence were minimized.

The accusations and suspicion of bond program critics, however,  played a major role in the election of a new school board and the transition to a new superintendent.

SEC ends probe of West County district’s bond program; issues no sanctions

The conclusion of the investigation, begun in July 2014, was hailed as welcome news by the school district superintendent



Nystrom Magnet Elementary School celebrates its renovated campus in Richmond on Nov. 30, 2016. The renovations were funded as part of a massive bond program approved by West Contra Costa Unified School District voters starting in 1998. (Kristopher Skinner/Staff archives)
Nystrom Magnet Elementary School celebrates its renovated campus in Richmond on Nov. 30, 2016. The renovations were funded as part of a massive bond program approved by West Contra Costa Unified School District voters starting in 1998. (Kristopher Skinner/Staff archives)
By Tom Lochner | tlochner@bayareanewsgroup.com | Bay Area News Group

PUBLISHED: July 21, 2017 at 12:25 pm | UPDATED: July 21, 2017 at 3:29 pm

RICHMOND — The Securities and Exchange Commission has concluded its investigation of the West Contra Costa Unified School District’s bond program without any sanctions, the agency announced.

“Based on the information we have as of this date, we do not recommend any enforcement action by the Commission,” SEC Regional Director Monique Winkler said in a July 12 letter to the school district’s outside counsel, Jason Gonzalez of Nixon Peabody LLP’s Los Angeles office.

The notice of conclusion, however, “must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff’s investigation,” Winkler added, citing standard SEC procedure pertaining to such notices.

West County schools Superintendent Matthew Duffy hailed the end of the investigation as “welcome news” in a statement Friday.

“The district has proactively looked into the matter and made significant changes to improve the processes and procedures of the bond program,” Duffy said in a news release. “Now, it is time for community members and staff to turn their focus to improving the teaching and learning taking place in our classrooms.”

The SEC began its investigation in July 2014 in the wake of accusations of mismanagement in the district’s $1.6 billion school bond program. The agency requested documents relating to general obligation bonds issued by the school district and to proposed refunding of the district’s debt, according to the news release.

Once the SEC began its inquiry, the school district commissioned a $1 million forensic accounting investigation to look into the accusations, resulting in 112 recommendations, more than half of which have been implemented, the news release added. An implementation plan update is available here.

“It is my hope that with the conclusion of the SEC investigation and the implementation of the forensic audit recommendations, we are beginning to regain the trust of the community in our ability to responsibly and effectively manage the school construction and bond program,” Duffy said.

Hercules City Councilman Dan Romero, who said he has followed the bond program issue as a citizen watchdog, said Duffy should have provided “more information about the SEC’s three-year investigation.”

“The investigation is over, so what did the SEC clear them (the school district) of?” Romero said in an interview Friday. “Was it a question of the bonds’ issuance? Or was there malfeasance in the expenditure of the bond funds?

“Because that’s the question of the forensic audit that was demanded by the public.”

 
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